Ramanisblog

Tag: World Bank

  • The Delhi Jal World Bank Corruption Story

    I Just read a news story that Arvind Kejrwal is looking into the corruption cases in the JAL Board Delhi and a related news item that some engineers were suspended.

    Jal Board, Delhi
    Delhi Jal board

    I wondered as to why such a routine and insignificant(?) case is being attended to by the CM of Delhi.

    I did some search and found that the issue of Corruption in JAL Board Delhi is not as insignificant as I imagined.

    I seem to have missed out this altogether.

    Or is it that the Media has not covered it as the case deserves?

    I suspect so.

    Here is the take on Jal Corruption.

    This corruption involves World Bank , appointing consultants to Delhi Water Board.

    To the uninitiated, it is the practice of Governments to appoint consultant for a new Technology/Process.

    The operation involves floating technical specifications, Commercial Bid and final selection.

    To secure the business the competing firms appoint Liaison Officers, Project Consultanats.in plain language ‘The Fixers” who find out what percentage is to be given to whom, what to quote and in general facilitate the winning of the Contract.

    I have a post on this process.

    Now to Jal.

    In getting a Consultant for a Project of Rupees 168 Crore, the Foreign Consultants suggested by the World Bank would amount to 108 Crore, 60% of the project Cost.

    This came out during through RTI.

    “RTI documents revealed that the DJB had approached World Bank in 1998 for a loan to upgrade its water utility services to Delhi. The bank suggested that they hire a multi-national consultant who would ‘suggest’ basic reforms for the DJB to carry out. The bank offered a $2.5 million loan to DJB for hiring the consultant.  States Arvind Kejriwal, “Delhi has 21 water zones. The management of each water zone was to be given to four experts for each zone at a salary of Rs25,000 per month which is Rs11 lakh. The per annum cost of the salaries would come to Rs108 crore. The total budget of the DJB was Rs168 crore thus 60% of the money would be spent on salaries on foreign consultants. Roughly estimated, this would lead to nine times increase in water tax for Delhites.”

    RTI documents further revealed how the World Bank arm-twisted DJB to favour a particular multi-national company. The DJB invited tenders for which 35 consultants applied and six of them were to be short listed. An evaluation committee consisting of senior officials of the DJB ranked them in order of merit as per the World Bank guidelines.  PricewaterhouseCoopers (PWC) was curiously termed as a ‘desi’ company because it bid from its Kolkata branch but was ranked 10th. However, the World Bank arm-twisted the DJB to prop it up to the 6th position.  States Mr Kejriwal in a protest letter that he wrote to the World Bank after studying the documents, “This provision was misused to bail out PWC as it was treated as an Indian company because the branch of PWC which had applied is incorporated in India. Thus, PWC featured amongst the top six short-listed companies.

    Mr Kejriwal’s letter to the World Bank further states: “Thereafter, technical and financial proposals were invited from the six short-listed companies. A company needed 75% marks in technical evaluation to qualify. An evaluation committee, consisting of senior officials of DJB, evaluated the proposals on the basis of the criteria given in World Bank guidelines. PWC again failed. Only two companies, namely Deloitte of USA and TAHAL of Israel, got more than 75% marks.

    “The results were sent to the World Bank for their “no objection”. The bank was strangely dissatisfied with the results. It nevertheless blatantly displayed its interests in PWC. It demanded an explanation from the DJB as to why did they give such low marks to PWC.” DJB was stunned at this reply from the World Bank and in a note, the official placed on record that he strictly abided by the World Bank norms and no company procuring below 75% could be eligible for procuring the contract. If PWC is considered, the official wrote in his internal correspondence, it would go against the principles of transparency and would cause great embarrassment to the DJB.

    DJB opposed this arbitrary interference but the World Bank bullied it into revising the criteria, audaciously stating this was not the first time it had so intervened”

    Source.

     

     

     

    http://www.moneylife.in/article/rti-expose-of-how-world-bank-had-arm-twisted-delhi-jal-board-for-water-privatisation/23217.html

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  • Borrows Heavily From Banks To Destroy Banks!

    Seems a good idea to rob a bank to Rob Banks further.

    Takes Loans to Destroy Banks?
    Takes Loans to Destroy Banks?

    Sounds Funny?

     

    This is exactly what anti-capitalist campaigner Enric Durán borrowed €492,000 ($642,306) from 39 different financial entities with absolutely no hope or intention of paying it back. But—as you might expect from an anti-capitalist campaigner—he didn’t spend it all on diamond kitchen knives and luxury frisbees. Instead, he ploughed it into a number of unspecified anti-capitalist causes and spent the rest on Crisi, a free newspaper that detailed how he’d done what he did and urged others to do the same. ‘

     

    In the absence of inaction by the Governments against the thieves of Corporate Sector,this seems to be best method.

     

    Beat the system by being a part of it.

     

    That’s what I always say to my son whenever he wants some things in the System is to be corrected.

    ”

    VICE: Hey Enric, what exactly happened with your trial?
    Enric Durán: The court accepted my lawyer’s resignation on the February 13th, then they told me I had to come to court again on the 18th, but I didn’t go to that. And now it’s not that clear if they can go on further with the case because I haven’t got a new lawyer, so it would be against my rights if they were to continue.

    I see. Let’s go back to the start. You got into activism in 2000. What sparked your interest in the financial system?
    Well, back then I was part of the anti-globalization movement. By 2005, I’d started reading about the energy crisis, which was related to the financial system. I realized that, not only was the system unwanted, but that it couldn’t keep going on as it was. That’s what sparked the idea of this act of disobedience—to retrieve money from banks and invest it in anti-capitalist projects.

    In a way you anticipated the link between the financial system, politics, multinationals, and governments when it still wasn’t clear to a lot of people. What made you realize that it wasn’t only one part of the system failing, but a global thing encompassing all of those aspects?
    It was in 2000, when we were fighting against the International Monetary Fund and the World Bank, that we started realizing it was a global thing. What wasn’t clear to us was that the system would fail on its own. We thought we had to make it fail, we didn’t realize it would fall apart naturally.

    Was taking out all those loans a demonstration of how you could take advantage of the system?
    It was various things, but there were two main goals. One was to denounce the financial system as something unsustainable, and the second goal was to show that we can be disobedient, brave, and that we can empower ourselves. When I started with all of this I was inspired by historical characters like Gandhi, and I thought it was important to bring actions like those back to the 21st Century. We wanted to use the money for a project that could prove how methods other than capitalism were possible.

    What was the day-to-day process of going to banks and asking for credit like?
    It was between the summer of the 2005 and the spring of 2008—nearly three years. I learned about how the loaning system worked and the information banks relied on to grant them. I learned about the holes in the system and how to move around them. At first, I’d get one loan granted out of three requests, and by the end I was getting nine out of ten requests granted. For instance, one loophole in the system was that the Bank of Spain shared the loan information with other banks, but only for loans higher than €6,000 ($7,833). So I only asked for loans under that amount for two years, moving funds without having the Bank of Spain controlling my actions.

    Did it get to the point where you thought, ‘Holy shit, I have a lot of money’? Or did you just invest it on the go?
    The money was invested. I never had more than €50,000 ($65,275) at any one time. It was all spent on various projects.

    You haven’t revealed any of the projects you invested the money in, but are you aware of any of them being subjected to legal action because of your investment?
    Not at all. In fact, it’s pretty clear that banks weren’t interested in where the money had gone. There haven’t been any investigations and, as it was a political action, they only wanted to repress me, not the collective. They didn’t want to make it a bigger deal of it than it already was.

    You published your own newspaper, Crisi. Why did you want to diffuse your message through that and not use the regular media channels?
    I spent a long time figuring out how to get the story into the public domain. I wanted to get it out to as many people as possible, but I was worried about being repressed. So we decided to use some of the money to print the newspaper, and I think it was one of the best decisions we made. The media understood that this newspaper was being distributed on the street and they didn’t want to be left out of something that was being talked about, so publishing our own newspaper actually helped to get the message in the mainstream press.

    http://m.vice.com/read/spains-robin-hood-prefers

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  • ‘India Corruption Risk’ Ernst Young Report.Scams Echo.

    The echoes of the Bribery, Corruption in High places ans Government’s unwillingness to take action, are now reverberating through the World.

    Earlier Reports of GFI and Financial Rating Agencies used to call India not too friendly for speedy growth due to slow implementation of Economic Reforms, now the tone and tenor has changed.

    Now the issue id Corruption and bribery.

    Ernst &Young has called India as ‘ that fraud, bribery and corruption are seen as significant risks in India’.

    It estimated that

    ‘Businesses in India recorded losses worth a whopping Rs 6,600 crore last year with a significant portion of these frauds occurring in the financial services sector that includes banking, investments and insurance businesses.

    63% of the total fraud cases in FY12 were reported in the financial services sector, banks being the most common victim of frauds followed by insurance and mutual fund companies, according to Fraud Indicator, a first of its kind report by Consulting firm Ernst & Young.’

    Considering the number of zeroes following the scams, this estimate is quite low.

    Read the Full Report.

    Ernst &Young Report India_jpeg.
    Ernst &Young Report India.

     

    ‘Even allowing for a recent slowdown, the Indian economy continues to grow faster than many other G20 countries.

    However, with Indian GDP growth rates below the trend of the last decade, pressure on companies to meet expectations is rising, increasing in turn, the risk of fraud, bribery and corruption.

    Although India continues to be a favored destination for foreign investment, with 71% of respondents to our 2012 India Attractiveness Survey keen to invest in the country, growth opportunities are constrained by regulation and bureaucracy.

    A recent report from the World Bank ranked India 132nd out of 183 economies for ease of doing business, and as low as 181st for dealing with construction permits and 182nd for enforcing contracts.

    Similarly, the World Economic Forum Global Competitiveness Report for 2011–2012 ranked India 96th of 142 economies for burden of government regulation.

    The combination of a market with significant investment potential and a high level of bureaucracy has resulted in many seeking to bypass, accelerate or influence decisions. Media coverage from India has featured a series of corruption scandals over recent years, including a number involving national and state government representatives.

    Coverage intensified in 2011 following high-profile protests over the pervasiveness of corruption in the country.

    Given the extensive media coverage, it is not surprising that fraud, bribery and corruption are seen as significant risks in India. This is shown by the fact that 70% of India respondents to our survey think that bribery and corruption are widespread in the country and 72% believe that management is likely to cut corners to meet targets.

    These findings are consistent with the decline in the ranking of India on the Transparency International Corruption Perceptions Index (down from 3.5 to 3.1 and from 72nd to 95th place in the rankings between 2007 and 2011).

    With fraud, bribery and corruption risk so high on the domestic and international agenda, it is essential that companies with a presence in India actively address these risks.’

    http://www.ey.com/GL/en/Services/Assurance/Fraud-Investigation—Dispute-Services/Global-Fraud-Survey—a-place-for-integrity—India

     

    You can download The printable version of The Report at the Link.

    ‘

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  • India Ranked 78- Interactive Information.

    World map showing GDP real growth rates for 20...
    Image via Wikipedia

    Seems to be a fair assessment.

    However Figures from CIA are to be taken with a pinch of salt as it is notoriously inadequate and often incorrect.

    You can check out CIA site.

    This document explains the categories, metrics and methodology used in Newsweek’s ranking of the world’s best countries, and associated interactive infographic.

    Population and Income Groups

    Income groups are divided according to 2009 gross national income (GNI) and GNI per capita, calculated using the World Bank Atlas method.

    Size groups are based on population with large being greater than 50 million, medium being 20 to 50 million and small being less than 20 million.

    Categories and Metrics 

    1. Education

     Academic Achievement

    Combined universal score on TIMSS and/ or PISA tests using Eric Hanushek‘s normalization methodology. For schools that do not administer these tests, an achievement score was imputed by doing a regression of literacy rate (CIA World Factbook) and average years of schooling against the universal score. [1],[2]

    Quick Rationale: Captures overall efficacy of system and differentiates developing countries. Measures education achievement…..

    Methodology for Creating Index

    Seems to be a fair assessment.

    Raw data for 100 countries were normalized on a 1-100 scale (except in Education, see note above) according to the following:

    99 (country score – sample minimum) +1 / (sample maximum – sample minimum)

    Sample min/max are lowest and highest country scores (with adjustment for outliers on GDP as indicated).

    Each individual metric was given equal weighting within each of the five categories with some metrics being comprised of 2-3 submetrics that were also weighted equally.

    Each category was weighted equally to arrive at overall index.

    If high value indicates a worse outcome, index is calculated according to:

    -99 (country score – sample minimum) / (sample maximum – sample minimum) + 100.

    http://www.newsweek.com/2010/08/15/interactive-infographic-of-the-worlds-best-countries.html

    http://www.newsweek.com/2010/08/15/world-s-best-countries-categories-metrics-and-methodology.html

  • Rising Food and Vegetable Prices.Why?

    Main reason for increase in vegetable /food prices is due to online trading of commodities,which goes on unchecked,farmland operations by corporations,shrinking area for food production(land is being sold for real estate) ,hoarding and bottle necks in idstiribution.

    Unless these issues are addressed in time , situation could become worse and the government shall be a mute spectator.

    Look at Indian Agriculture Ministerwho says he could not help it and Finance Minister who requests(?!) traders to release stocks and the sluggishness of the bureaucrats who let 200 tons of Onions imported from Pakistan rot in Mumbai port!

    Story:

    Last month, global food prices surpassed their mid-2008 records, according to a report out from the United Nations Food and Agriculture Organization (FAO). The FAO’s food price index clocked in at 214.7 in December, up 4.2% in just a month, and breaking the previous record of 213.5 in June 2008.

    “It will be foolish to assume this is the peak,” says FAO senior economist Abdolreza Abbassian. He calls the situation “alarming,” but dutiful bureaucrat that he is, he won’t call it a “crisis.”

    Last month, global food prices surpassed their mid-2008 records, according to a report out from the United Nations Food and Agriculture Organization (FAO). The FAO’s food price index clocked in at 214.7 in December, up 4.2% in just a month, and breaking the previous record of 213.5 in June 2008.

    “It will be foolish to assume this is the peak,” says FAO senior economist Abdolreza Abbassian. He calls the situation “alarming,” but dutiful bureaucrat that he is, he won’t call it a “crisis.”  Heck, even the Super Big Gulp ain’t what it used to be: Now with 9% less!

    http://blogs.forbes.com/greatspeculations/2011/01/10/speculators-savor-it-but-consumers-rue-the-pinch-from-higher-food-prices/

    Related:

    – Record food prices will hit the world’s poorest hardest, raising the risk of riots, export bans, foreign-owned farmland expropriation and further price spikes fuelled by short-term investors……..

    So far, experts say weather-related supply shocks — floods in Australia, drought in Argentina, dry weather and fires in Russia and potentially crop damaging frosts in Europe and North America — were largely to blame. But they worry politics and markets could soon take over to produce a vicious circle.

    “The danger is that what happens now is that you get a second shock as countries can respond by imposing export bans and financial markets investors pile in for short-term investment, pushing prices much higher, as they did in 2008,” said Maximo Torero, divisional director for markets, trade and institutions at Washington DC’s International Food Policy Research Institute (IFPRI).

    Russia imposed export restrictions last year after fires and drought. In 2008, IFPRI says at least 13 countries including Argentina, Cambodia, Kazakhstan, China, Ethiopian, Malaysia and Zambia imposed either export bans or taxes, further squeezing supply.

    “Clearly what is needed is to increase production through appropriate investment in agriculture, to increase the information on stocks around the world, strengthen the regulation of the futures markets and to have safety net mechanisms to protect the poorest consumers,” he said.

    Political risk insurers, who provide protection against dangers such as confiscation or political violence, are watching closely — although they say there has not yet been any direct impact on premiums.

    “The potential is there for food riots and also for governments to take action such as embargos on food exports or nationalisation of assets involved in food production or storage in order to protect their people — not always necessarily for the sake of altruism but often to preserve their position as governments in office,” said a senior underwriter in the London political risk insurance market.

    The highest risks of farmland expropriation remain in Latin America, insurers say — particularly Venezuela, Bolivia and Ecuador — but this is more down to local political factors than rising prices. The greatest impact of the recent rally could be on land deals in Africa, some suggest.

    RISK MITIGATION STRATEGIES

    The 2008 spike produced a flurry of interest in farmland purchases both from Western funds and richer emerging countries such as China and Gulf states keen to preserve their supplies.

    While some deals fell through after the crash, others are now entering production. But they have proved controversial. Local anger over the purchase of Madagascan farmland by South Korean firm Daewoo was seen by some as a contributing factor in the island’s 2009 coup.

    “The main risks will come where they are in an area where the population is short of food themselves and the deal is seen as being in some way inappropriately negotiated,” said Jonathan Wood, global issues analyst at Control Risks. “So many of these projects are in East Africa: Ethiopia, Kenya, Tanzania. But a lot will depend on the individual deal.”

    Some investors such as London-based funds Emergent Asset Management and Chayton Capital say a key part of their strategy has been to ensure such projects clearly benefit the local community, for example through local milling.

    “Smart investors don’t own the land,” said Bond at the World Bank‘s MIGA. “They work with contract farmers and see the domestic market as their first and most important market. It makes sense from a risk mitigation strategy’

    http://in.reuters.com/article/idINIndia-53968020110106?pageNumber=2