Group items tagged

Bureaucracy, in short, is all the fundamental building blocks of civilisation some people have the luxury of taking for granted.

These days, a westerner can hardly imagine how complicated the world would be without bureaucracy. But try to picture it: living without an address, without a social security number. Could you open a bank account? No. Start a business? No way. Register to vote? Never.And yet, about four billion people around the world have no address.

imagine having no proper tax authority. Without one, a government loses out on billions of dollars of potential revenue. There’s no money for social services or infrastructure. People living in poverty stay living in poverty.

people living in poverty own much more than they’re able to prove on paper. In Cairo, for example, they have $241.4bn worth of unregistered property, according to De Soto. In his book The Mystery of Capital (2000), he puts this figure into perspective: it’s six times all the money held in Egyptian savings accounts, 30 times the market value of every publicly listed company in Cairo, and 116 times the value of all Egypt’s privatised former state companies.

Without papers proving ownership, you can’t record the sale of your property or use it as collateral to secure a loan.The evidence is ample: bureaucracy – and the security that comes with it – is what people living in poverty need to climb out of poverty.

capacity building remains the neglected stepchild

Tax Inspectors Without Borders

British tax veteran Lee Corrick went to Kenya in 2011 to train local inspectors. For years, the Kenyan tax office had had problems with a big multinational company – something to do with tea auction licence rights and letters of credit. It sounds overly complicated, and the Kenyans thought so too. But after two workshops with Corrick and a stern talk with the multinational, the Kenyan tax office managed to collect $23m. In fact, revenues from Kenyan tax inspections doubled after Corrick came to town. And in Colombia, the take increased tenfold after training.

In one area, farmers’ land was officially added to a land registry; in another, it wasn’t. The researchers then looked at how the farmers used their land.Here’s what they found: farmers who owned their land on paper invested more. For example, they more often planted trees, such as oil palms, that would continue to provide income all their lives. And since they no longer feared their land would be snatched out from under them, they spent less time guarding it. That left them more time to do other things – like earn money.

If development economists and people living in poverty like Lebrun are calling for bureaucracy outright, why doesn’t everyone – aid organisations, governments, companies – get behind it 100%?The answer is simple. Bureaucracy is boring.

A TV ad showing a sweetly smiling Haitian girl who’s just got her first school uniform works better than one with a blah bureaucrat in a fluorescent-lit office drawing lines on paper with a ruler

one agency after the other has started donating paperwork, Excel sheets and bookkeeping courses. They call it "capacity building".

the truth is, real progress is a gradual, thoroughly bureaucratic, deadly dull process. Saving the world isn’t sexy.

Some of the most significant gains came in Europe where the bulk of Turkey’s 2,929,389-stong diaspora lives. Voting from abroad has only been possible since 2013 and the low turnout among diasporic citizens in 2014 suggests that politicians had not yet worked to mobilize them. In Holland, for example, where 8.6% of diasporic voters were registered at the time of the referendum, turnout was only 7.2% in 2014, but rose to 46.7% and 46.8% in November 1, 2015 and April 16, 2017, respectively. Though Erdoğan’s share of the vote in 2014 (78%) was higher than in either the AKP (69.7%) or the YES vote (70.9) received, the difference in turnouts makes comparison difficult. Moreover, Holland was part of a larger trend in 2017: of European countries with more than 10,000 diasporic voters only voters in Switzerland registered a decline in support for Erdoğan’s priorities.

a fractional number of voters who were willing to vote for the AKP over other parties and Erdoğan over other candidates were unwilling to give him sweeping powers.

Overall, the YES vote was 3.7 percentage points higher than the vote for the Justice and Development Party (AKP) in its November 2014 election. At the same time, the YES vote was 0.4 points lower than in the 2014 presidential election. Though Erdoğan achieved his goal of winning the election and securing additional powers, this feat may be pyrrhic: it was achieved with the help of an MHP leadership that has been shown to be out of touch with its own voters; it was achieved with diminished support in key regions like the Black Sea; it was achieved with increased support in southeast regions where tens of thousands of citizens did not reach the voting booth. President Erdoğan has successfully cobbled together a coalition of voters sizeable enough to win, but governing will be the greater challenge.

In February, even before the coronavirus hit, the International Monetary Fund was warning Saudi Arabia and the United Arab Emirates that by 2034 they would be net debtors to the rest of the world. That prediction was based on a 2020 price of $55 per barrel. At a price of $30, that timeline will shorten. And even in the Gulf there are weak links. Bahrain avoids financial crisis only through the financial patronage of Saudi Arabia. Oman is in even worse shape. Its government debt is so heavily discounted that it may soon slip into the distressed debt category

The economic profile of the Gulf states is not, however, typical of most oil-producing states. Most have a much lower ratio of oil reserves to population. Many large oil exporters have large and rapidly growing populations that are hungry for consumption, social spending, subsidies, and investment

Fiscal crises caused by falling prices limit governments’ room for domestic maneuver and force painful political choices

Ecuador is the second Latin American country after Argentina to enter technical default this year.

Populous middle-income countries that depend critically on oil are uniquely vulnerable. Iran is a special case because of the punitive sanctions regime imposed by the United States. But its neighbor Iraq, with a population of 38 million and a government budget that is 90 percent dependent on oil, will struggle to keep civil servants paid.

Algeria—with a population of 44 million and an official unemployment rate of 15 percent—depends on oil and gas imports for 85 percent of its foreign exchange revenue

The oil and gas boom of the early 2000s provided the financial foundation for the subsequent pacification of Algerian society under National Liberation Front President Abdelaziz Bouteflika. Algeria’s giant military, the basic pillar of the regime, was the chief beneficiaries of this largesse, along with its Russian arms suppliers. The country’s foreign currency reserves peaked at $200 billion in 2012. Spending this windfall on assistance programs and subsidies allowed Bouteflika’s government to survive the initial wave of protests during the Arab Spring. But with oil prices trending down, this was not a sustainable long-run course. By 2018 the government’s oil stabilization fund, which once held reserves worth more than one-third of GDP, had been depleted. Given Algeria’s yawning trade deficit, the IMF expects reserves to fall below $13 billion in 2021. A strict COVID-19 lockdown is containing popular protest for now, but given that the fragile government in Algiers is now bracing for budget cuts of 30 percent, do not expect that calm to last.

Before last month’s price collapse, Angola was already spending between one fifth and one third of its export revenues on debt service. That burden is now bound to increase significantly. Ten-year Angolan bonds were this week trading at 44 cents on the dollar. Having been downgraded to a lowly CCC+, it is now widely considered to be at imminent risk of default. Because servicing its debts requires a share of public spending six times larger than that which Angola spends on the health of its citizens, the case for doing so in the face of the COVID-19 crisis is unarguable.

Faced with the price collapse of 2020, Finance Minister Zainab Ahmed has declared that Nigeria is now in “crisis.” In March, the rating agency Standard & Poor’s lowered Nigeria’s sovereign debt rating to B-. This will raise the cost of borrowing and slow economic growth in a country in which more than 86 million people, 47 percent of the population, live in extreme poverty—the largest number in the world. Furthermore, with 65 percent of government revenues devoted to servicing existing debt, the government may have to resort to printing money to pay civil servants, further spurring an already high inflation rate caused by food supply shortages

The price surge of the 1970s and the nationalization of the Middle East oil industry announced the definitive end of the imperial era. The 1980s saw the creation of a market-based global energy economy. The early 2000s seemed to open the door on a new age of state capitalism, in which China was the main driver of demand and titans like Saudi Aramco and Rosneft managed supply

The giants such as Saudi Arabia and Russia will exploit their muscle to survive the crisis. But the same cannot so easily be said for the weaker producers. For states such as Iraq, Algeria, and Angola, the threat is nothing short of existential.

Beijing has so far shown little interest in exploiting the crisis for debt-book diplomacy. It has signaled its willingness to cooperate with the other members of the G-20 in supporting a debt moratorium.

In a century that will be marked by climate change, how useful is it to restore profits and prosperity based on fossil fuel extraction?

The shock of the coronavirus is offering a glimpse of the future and it is harsh. The COVID-19 crisis drives home that high-cost producers are on a dangerously unsustainable path that can’t be resolved by states propping up their uncompetitive oil sectors. Even more important is the need to diversify the economies of the truly vulnerable producers in the Middle East, North Africa, sub-Saharan Africa, and Latin America.