Editorial
Analysis
Turning Dar into a city for people
Oil-for-Food fiasco could be
repeated much too easily
The latest report into the United Nations Oil-for-Food scandal does not
exonerate Kofi Annan, its beleaguered Secretary-General.
True, on the most contentious issue — the awarding of a contract to a company
which employed his son Kojo — the panel cleared Annan. Sort of.
It found no corruption, but it criticised him for failing to set up a rigorous
investigation when Kojo’s role first emerged.
But Mark Peith, one of the investigators, rejected this yesterday. Going further
than the published report, Peith said: “We did not exonerate Kofi Annan. We
should not brush this off. A certain mea culpa would have been appropriate.”
Even leaving aside Annan’s superficial examination of his son’s case, the
episode exposes one of the UN’s greatest flaws, and his lack of success in
tackling it: the lack of accountability for huge sums of money.
Of course, the Iraqi Oil-for-Food programme was something of a one-off. There
was the sheer size of it: a $67 billion scheme to allow Iraq to swap oil
revenues for food and medical supplies. It was the size of a large international
corporation, and it was created in a few months.
If the Oil-for-Food programme faced a tougher challenge, it was for two reasons.
First, Saddam Hussein’s regime was still very much in place, and the UN had no
access to the country. As well as that, Saddam was determined to deceive the UN
and twist the scheme secretly to allow him to try to buy influence with other
governments and cause the sanctions to wither away.
Second, there was the bitterness of the politics within the UN itself over Iraq,
dating from the 1991 Gulf War.
This sourness compromised the UN’s ability to hold the scheme’s managers to
account from the start. Only a few countries, including the US and Britain,
really wanted it to work.
But once a scheme is set up, there is often much less attention on tracking
where the money has gone, and on holding the managers responsible. Few
countries, except the largest donors to individual projects or agencies, have a
large enough stake to push a row through to a conclusion.
But the oversight of the Iraqi scheme does seem to have been exceptionally poor.
The lists and lists of names of those involved in the trades — individuals, at
that, not companies — made it all but impossible to verify the trades.
The report does show that the UN’s faults, which Saddam understood and
exploited, run very deep. It would be wrong to see it as an aberration that
could not happen again.
Bill in favour of farmers should
be supported
In Tanzania about 80 per cent of the entire population is employed by the
agricultural sector. The nation has declared for the past three decades that
agriculture is the backbone of the economy.
Despite this, farmers have always remained poor. Credit facilities have been
directed to businessmen in the sectors of industry, textiles, manufacturing and
others.
Small holder farmers have in most cases failed to secure loans from financial
institutions due to lack of collateral or other accepted assets. This is
prompted by the fact that even those farmers who get good harvest yields are not
paid on time.
Luckily, a bill to facilitate loans for farmers, that is aimed at enabling
farmers to access bank credits, is in the offing.
If the bill sails through, farmers and small holders will be able to secure
loans by using their produce as collateral. The bill will be tabled in the house
next month.
The proposed law recommends a legal mechanism that will enable farmers to get
credits from banks by using receipts issued by licensed warehouse operators.
Under the suggested arrangement, farmers would be required to deposit their
crops in the licensed warehouses and then issued with receipts. The bill, in
general, is intended to legalise what has been regarded as dead capital.
This is the only arrangement that will enable farmers to move from subsistence
farming to commercial farming which will greatly boost their economic abilities.
But the most important here is to ensure that the bill sails through.
We appeal to all those who are in one way or another involved, to ensure that
the bill becomes reality. This will not only boost the positions of farmers but
will make Tanzania among the top exporters of agricultural products.
Analysis
Turning Dar
into a city for people
Dar es Salaam is a very
attractive city in general but it could be more attractive had the people been
given the priority. Now changes are finally underway as Timothy Kitundu
explains.
Following the introduction of the Bus Rapid Transit (BRT) by the Dar es Salaam
City Council, (DCC), with funding from the World Bank and the Tanzanian
government, the city will be completely transformed, putting people as the focal
point.
The transformation will involve the putting in place of a mass transport system,
(BRT), which will provide a lasting solution to the transport woes in the city
of Dar es Salaam.
The establishment of the BRT system is aimed at providing Dar es Salaam
residents with fast, comfortable and cost-effective transport means.
To show that the project may become a reality within a short period of time, the
DCC last week concluded the procurement process of the consultant who will
prepare a long term conceptual design, and a detailed design of the initial
corridor.
The contract for the above mentioned services was signed last week in Dar es
Salaam between the DCC and M/S Logit Engenharia Consultiva Ltda of Brazil, in
association with Inter-Consult Ltd. (Tanzania).
Why then do we say that Dar es Salaam will be a city of people, not a city of
cars? In his presentation, the former Mayor of Bogotá, Enrique Penalosa said
that before the introduction of BRT, residents of Bogotá hated their city.
People with cars were given priority as all roads were built for cars. There
were few or no cycle tracks, while footpaths for pedestrians and every open
space were used as parking spaces for cars.
He says even the pavements which are supposed to be used by pedestrians were
occupied by cars as parking lots. This is exactly what is happening here in Dar
es Salaam. Therefore the first condition of this project is to restrict the use
of cars in the city centre.
The new system which will replace the daladala commuter buses would make Dar es
Salaam friendlier to its residents and not just to automobiles. The true
objective of the project is to create a habitat for happiness, a city for
walking, playing, talking and meeting friends, relatives and neighbours.
Take Zurich as an example. Zurich is Europe’s richest city, yet 60 per cent of
its population takes public transport and 20 per cent walk or use bicycles and
the remaining 20 per cent use private cars.
The proposed system would provide the city with hundreds of kilometres of
pedestrians’ streets lined with giant tropical trees, having sports fields and
thousands of kilometres of protected bicycle-tracks.
According to the DCC, the transport system, which will deploy 160-200 passenger
buses, would greatly reduce traffic congestion compared to the now estimated
7,000 daladalas that ply the city’s roads. Air pollution at the city centre will
also be greatly reduced.
However, a number of city residents, apart from welcoming the idea are still
worried as far as bus fares are concerned. A civil servant who introduced
herself as Hanifa Jumbe of Mivinjeni in the city said that, if the BRT buses
charge cheap fares, then the transport woes in the city will come to an end.
Another city resident, Matayo Anthony of Mbagala Rangitatu said that the
sustainability of the project is what is more important. “We don’t want history
such as UDA to repeat itself,” he said. (The UDA buses gradually disappeared for
lack of spare parts and maintenance, so it was said).
Bogotá, in Colombia between 1998 and 2000 made significant achievements. Today,
the city boasts a world-class Bus Rapid Transit system (TransMilenio), Latin
America’s largest network of cycle-tracks – 300km – and the world’s longest
pedestrians-only street.
Hopefully, with the full cooperation of all stakeholders in the city transport
sub sector, Dar es Salaam city may achieve the goals set. Tanzania could learn a
lot from the BRT system in Bogotá and other cities already implementing it.
Boeing v
Airbus, see you in court
History suggests an unsatisfactory ending to the current row over aircraft
subsidies between America and Europe. The last similar dispute to go to the
World Trade Organisation (WTO) was in the 1990s, when Canada and Brazil
traded accusations over subsidies for Bombardier and Embraer, makers of
regional jets (seating up to 100 passengers) in the respective countries.
The WTO found both parties guilty. Neither country applied sanctions.
Subsidies continued to flow.
The dispute over subsidies to Airbus and Boeing would be the biggest yet to
go to the WTO—which now seems likely after the breakdown last weekend of
talks between America and the European Union (EU)—and any sanctions
resulting from it could have nasty knock-on effects for other trade
negotiations. Nor is the dispute itself as straightforward as the earlier
one.
America wants an end to Europe’s soft government loans, known as “repayable
launch aid”. These allow Airbus to develop new models safe in the knowledge
that much of the “borrowed” development money will be written off should the
new aircraft not sell well. In practice, Airbuses now sell like hot cakes
and governments collect royalties on the aid even after the principal and
interest are paid off. On the other hand, Boeing, says Airbus, has long
received subsidies indirectly via development contracts from NASA, America’s
space agency, and from the Department of Defence.
In 1992, Europe and America agreed that Airbus’s launch aid would be limited
to one-third of development costs, while indirect aid to Boeing would be
capped at 4% of its total revenues. But last year America tore up this
bilateral deal and demanded an end to Airbus’s launch aid, declaring that
the 1992 agreement had required it to be phased out over time.
One reason, suspect some Europeans, is that America knew it was already
breaking the bilateral deal. Direct financial support had been provided for
the production of bits of Boeing’s new 787 jet by the states of Washington
and Kansas.
Under the WTO’s Subsidies and Countervailing Measures agreement, subsidies
to a specific company or specific industry from a government or other public
bodies are not allowed. Airbus’s launch aid is surely in breach of this, and
America would have a good case before the WTO.
Yet the EU too could probably bring a strong case to the WTO. However, this
would probably not be just against Boeing, but also against the American
firm’s Japanese business partners. The new Boeing 787 is being built with
the heavy-industry divisions of Mitsubishi, Kawasaki and Fuji, in a
consortium known as the Japanese Aircraft Development Corporation (JADC).
According to an assessment by David Pritchard and Alan MacPherson of the
State University of New York, Buffalo, JADC is being offered at least $1.5
billion in soft loans repayable only if the aircraft is a commercial
success, like the launch aid enjoyed by Airbus.
According to industry sources, America is hoping to prolong the process to
delay launch aid for Airbus’s A350 plane, a spoiler being rushed out to
counter Boeing’s new 787. But Airbus’s boss, Noël Forgeard, says the plane
will go ahead without launch aid if need be. The chances are that America,
its delaying tactic having achieved nothing, will file a WTO suit next
month—with the EU retaliating soon after.
Curiously, this classic national champions’ subsidy row has erupted just as
the civil aircraft business is becoming truly global. Not only has Boeing
outsourced development and production on its latest plane to Japan, it has
also changed its business model, selling its large Wichita factory for
making fuselages to a private-equity firm. This firm is likely to tout for
business from Airbus as well as Boeing. Boeing’s defence arm previously sold
a huge machine shop in St Louis to a British firm, GKN. The new owners hope
to win work from several aerospace firms. Indeed Airbus and Boeing already
spend over $5 billion a year each in their rival’s backyard, often using the
same suppliers.
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