The Practical Aspects of the Fight against Corruption

The fight against corruption is indeed a cardinal one for any society. Corruption at any level and by any other name is undeniably corrosive. It is the trademark of any retrogressive society. Every sane person knows it. That is why every leader, even those who seem to benefit from it, condemn it by day, even as they condone it by night. In 2015 then President Mugabe pronounced “zero tolerance to the scourge of corruption” even as Zimbabwe continued its descent on the global corruption scale. Today, similar declarations abound.

How do we tell the difference? How do we tell the real fight from the adulterated; reality from fake? Though the tune and the dance seem different from those of yesteryear, can the man in the street know for certain that now is the era of belling the cat? What’s the benchmark? After all, the picture for ages has been something like this:

Namely, the arrest of some political figure followed by a less dramatic acquittal, typically after a long time of an on-and-off-and-on-again appearance at this and that Court. This has had the regrettable result of the public having to question the bona fides of the allegations.

In practical terms, what is the fight against corruption? What does it entail? Talking about the establishment of special Corruption Courts, Justice, Legal and Parliamentary Affairs Minister Ziyambi Ziyambi said the courts would have no sacred cows. “We are going down to the roots of corruption,” he said. “No stone will be left unturned; even the so-called big fish who sometimes get away with corruption will be pursued. Further, these courts will ensure all corruption cases are dealt with expeditiously. There will be a united effort (my emphasis) among the NPA, JSC, Attorney-General’s Office, Zimbabwe Anti-Corruption Commission and police; and crack teams will be assembled where necessary.” (The Herald. 5 February 2018)

Needless to say, the fight against corruption is both proactive (preventative) and reactive. While the former is quiet and more effective, the latter is noisy, complex and costly. In the same Herald article, Zimbabwe Law Society president Mr Misheck Hogwe said that “It should be understood that corruption is one of the most complex crimes and needs a systematic approach” Indeed it should.

I did ask what the benchmark was. Let us have my take on that. To me it is the implementation of the last in the minister’s above sentences: a bona fide united front in this fashion:

While public debates of allegations, arrests, prosecutions and outcomes make all sorts of headlines and get official attention as well as funding, investigations only whimper in the background. Yet it goes without saying that successful outcomes are a result of resourceful investigations and astute prosecutorial work. On the same token, the allegation from which all this chain of events arises has to be well-founded. Let us look at each of these events in turn.

Allegation

What is the test criterion of a well-founded allegation? The long and short answer to this is that it should be free of malice. Whether the allegation is raised out of mere suspicion of wrongdoing, it should be well-founded, sound, logical and substantiated. This places the onus of evaluating a suspicion on the person raising the allegation. Many unsubstantiated allegations of corruption have found their way into the justice system, to the detriment of the integrity of the system.

Investigation

An investigation is an exercise to establish the truth. An investigation cannot create a case out of no case. Perpetrators of fraud and corruption will go to great length to conceal their crimes. It is the responsibility of the investigation to establish, not only the what, where, when, how and the who, but also ascertain the evidence thereof. Corruption is indeed a complex crime and it calls for an equally multifaceted investigative approach. This calls for directing attention to what is good and useful for uncovering the evidence and ignoring the rest.

The term “public-private partnership” has become quite popular in our political discourse. In this country, however, the practice has yet to find traction in the field of criminal investigations. In many countries the practice is a matter of cause. Modern fraud investigations will encompass a wide range of disciplines, including computer forensics, data/digital/ financial analytics, social mapping and so on. Experts in these investigative disciplines may not be found in the public sector. Many, if not most, are in private organisations and universities. Public-private partnership is therefore critical for successful outcomes.

Prosecution

In public discourse, prosecution is most often taken to be the low hanging fruit. It is where the most heat and noise come from. When the outcome is an acquittal it is the prosecution which often gets the rap. But, from what we have looked at above, the slap may not always be justified. When the case is politically sensitive talk of “persecution by prosecution” ensues. Just like an investigator, a prosecutor cannot create a case out of no case. Besides going to great length to conceal their crimes, perpetrators of fraud and corruption often create war chests to hire the best legal teams to defend them should they be caught. Public-private partnership in prosecution is therefore equally important for successful outcomes. Many “expert witnesses” may not be in the public sector.

Trial

An independent judiciary is of cause the icing on the cake. All players in the preceding stages are going to play their roles in good faith when they know that there is going to be a free and fair trial at the end of it all.

Conclusion

Finally, we have to keep in mind that the fight against fraud and corruption is an all embracing campaign, not merely uncoordinated battles. It should encompass both proactive and reactive measures. While the reactive actions of allegation, investigation, prosecution and trial generate heat and sound, the real test of a corrupt free society is in the proactive arena. How does society view corruption? Is a corrupt person ostracized reminiscent of a child molester? If not, why and what should be done? There may not be any easy answers. But one thing is certain: Corruption should be made to be abhorred through socialization and education.


Caleb Mutsumba
Forensic Audit Consultant
Mobile +263 712 620287 / WhatsApp:+263 772 466540
Skype: caleb.mutsumba
LinkedIn:- http://zw.linkedin.com/in/calebmutsumba
Blog: – https://5whaudit.wordpress.com/
Twitter:- @Caleb_Mutsumba

Advertisements

Nssa boss externalizes $340 million

HARARE, Newsday (May 11, pg 3) National Social Security Authority (NSSA) acting general manager Hashmon Matemera appeared at the Harare Magistrates’ Court yesterday charged with externalizing about $340 million during his tenure as BancABC managing director. Matemera (52) was not asked to plead when he appeared before provincial magistrate Vakai Douglas Chikwekwe, who granted him $10 000 bail and remanded the matter to June 15. Allegations against Matemera are that he facilitated the externalization of $332 980 000 belonging to diamond miner Jinan to Botswana, Zambia, Sierra Leone, Mozambique, Dubai and China when he was still head of BancABC three years ago.

The Africa Capacity Report ACR 2015: Capacity Imperatives for Domestic Resource Mobilization in Africa

The Africa Capacity Report ACR 2015: Capacity Imperatives for Domestic Resource Mobilization in Africa.

image001

Download Free PDF Copy (1.90MB)

The Africa Capacity Report (ACR) 2015 sends a very clear message: with official development assistance to Africa diminishing, the continent will have to rely more on mobilizing domestic resources if it is to implement its development agenda.

The ACR 2015 shows that this is possible, with a good number of African countries providing practical success stories based on strategies and initiatives that can easily be adapted to other countries. However, the capacity gaps to generate savings and taxes from domestic resources and allocate them to economically and socially productive activities remain glaring.

Overview

Each year since 2011, the African Capacity Building Foundation (ACBF) has produced the Africa Capacity Report (ACR). The objectives of the ACR are to measure and examine capacity in relation to the development agenda in African countries by focusing on the key determinants and components of capacity for development. ACBF defines capacity as the individual, organizational, and societal ability to set goals for development and to achieve them.

As in previous ACRs, the first chapter is devoted primarily to Africa’s capacity development landscape. It focuses on the Africa Capacity Indicators and the Africa Capacity Index (ACI). The ACI is a composite index calculated from four clusters covering the policy environment, implementation processes, development results, and capacity development outcomes. Results for this year indicate a good policy environment and good implementation processes for most African countries, although countries are not doing as well on development results. Notably, capacity development outcomes have deteriorated and remain the most pressing issue. Performance on the thematic indices is generally encouraging and particularly strong on gender equality and social inclusion.

This year’s annual theme of key importance to Africa’s development agenda focuses on the capacity development challenges in domestic resource mobilization. ACR 2015 surveys the state of and trends in domestic resource mobilization and illicit financial flows across the continent, and it identifies capacity gaps and requirements for countries to mobilize more resources domestically and reduce illicit financial flows abroad.

A team of in-country data experts conducted a quantitative survey in 45 African countries through a questionnaire, complemented by a qualitative survey in 14 countries selected by the ACBF for case studies according to the following criteria: tax effort performance, size of the economy, linguistic line, and geographic coverage. Drawing on the findings of these country studies, ACR 2015 provides key capacity building messages and policy recommendations.

The capacity dimensions of domestic resource mobilization are crucial today if African countries want to meet the ambitious Sustainable Development Goals and the goals of Agenda 2063. The Report of the High-Level Panel of Eminent Persons on the Post-2015 Development Agenda made it clear that domestic resource mobilization is a necessity and that a new global partnership is needed to fight illicit financial flows. Concerns have already been raised that the Third International Conference on Financing for Development – held in Addis Ababa, Ethiopia, on July 13-16, 2015 – did not deliver much in additional financial resources for the Sustainable Development Goals, implying that most financing must come from domestic sources.

To the extent that aid and other flows from external sources will not be sufficient, domestic resource mobilization will be critical for achieving the Sustainable Development Goals and the African Union’s vision of “An integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena”.

ACR 2015 complements the ACBF’s capacity building initiatives on the continent. Since its inception, the ACBF has created think tanks and policy units to support the formulation and implementation of strategic national policies. The overall aim is to ensure economic prosperity, political stability, and social justice for all citizens, through efficient use of resources. The ACBF has also created training programs such as the Economic Policy Management Program to improve economic analysis, public administration, and research capabilities and to deepen the financial sector. In addition, the ACBF has worked with partners such the International Monetary Fund to support deepening of the banking and financial sector.

Highlights of the Africa Capacity Indicators 2015

Results are generally satisfactory. The ACI values range from 20.7 (Central African Republic; CAR) to 70.8 (Cabo Verde).

No countries are at the Very Low or Very High extremes of capacity. Eight countries are in the High bracket, and no countries are in the Very Low bracket. More effort will be required for countries to move into the Very High bracket (ACI values of 80 and above).

The bulk of countries have Medium capacity. Of the 45 countries surveyed, most (73.3 percent) fall within the Medium bracket, 17.8 percent are in the High bracket, and 8.9 percent are in the Low bracket.

Analysis by cluster indicates a pattern that has not changed significantly from year to year, an indication that countries are stagnating in those clusters. As in previous ACRs (2011-14), the policy environment cluster remains the strongest and capacity development outcomes, the weakest.

On the policy environment – underpinned by broad participation and good governance – most countries are ranked High or Very High. Even if excellent, these results are not as good as in 2014, when 91 percent of countries were in the Very High category. Processes for implementation are also impressive, with 87 percent of countries in the High or Very High brackets.

Only 6.7 percent of countries are ranked Very High on development results, while 13 percent are ranked Low or Very Low.

Capacity development outcomes are even worse: 91 percent of countries are in the Low or Very Low brackets.

Overall capacity scores improved from 49.9 in 2014 to 52.0 in 2015. Only 8.9 percent of countries are now in the Low bracket, down from 13.6 percent in 2014. Countries with High capacity have seen an improvement in the average of their scores, and a higher percentage of countries are now in the Medium capacity bracket.

Achievements on the four thematic indices (policy choices for capacity development, development cooperation effectiveness related to capacity development, gender equality and social inclusion, and partnering for capacity development) are encouraging overall. More than half the countries are in the High or Very High category on each of the four. The best performance by far is on the gender equality and social inclusion index, where all countries are at least in the Medium category.

More resources for capacity development initiatives are required so that countries can improve their capacity development outcomes, an area that remains very weak. The ACBF can thus make an important difference by funding and providing technical assistance for specific capacity building projects and programs to meet the needs of African member countries and nonstate actors.

Challenges in mobilizing domestic resources and curbing illicit financial flows

Discussions for the post-2015 agenda have set high expectations for domestic resource mobilization as a self-sustaining development finance strategy. A focus on domestic resource mobilization and illicit financial flows in the African context is required for several reasons. For a start, mobilizing domestic resources allows countries to reduce their dependency on foreign aid. Examples of successful cases of development in other low-income (developing) regions reveal that high domestic savings is necessary for high investment and growth. Further, an extensive literature documents the positive link between taxation and state building through creating a social contract between the state and citizens.

Domestic resource mobilization refers to generating savings and taxes from domestic resources – and allocating them to economically and socially productive activities – rather than using external sources of financing, such as foreign direct investment, loans, grants, or remittances. Even if domestic resource mobilization does not include remittances, the ACR 2015 focuses on them as well; empirical and anecdotal evidence shows they can have a strong impact once they reach receiving countries. Illicit financial flows – resource flows that are “illegally earned, transferred or used” – are also discussed because they are a huge loss of domestic resources for Africa. According to the most recent data (for 2012), such flows from Africa were higher than remittance inflows ($82.5 billion versus $51.4 billion – chapter 2), and several countries are now losing large amounts to those flows relative to the tax revenues they collect.

The state of domestic resource mobilization and illicit financial flows in Africa

When compared with other developing regions – East Asia and Pacific, Latin America and the Caribbean, and South Asia – Sub-Saharan Africa has the lowest savings rate. And it has been trending downward Similar trends can be observed for investment and per capita growth rates, which to a large extent explain the persistence of absolute poverty in Sub-Saharan Africa. When North African countries are included in the mix, only Algeria has a very high savings rate. Overall, Africa’s savings rate is lower than those of East Asia and Pacific and of South Asia.

The average tax-to-GDP ratio in Africa has crossed 20 percent of regional GDP in recent years, far higher than in South Asia but still lower than in Latin America and slightly lower than in East Asia. Tax revenues have surged in the last decade, from $123.1 billion in 2002 to $508.3 billion in 2013. But these numbers may not reflect the situation across the continent since the resource-rich countries skew the regional average and most African countries have tax-to-GDP ratios below the regional average.

The increase in tax revenues has been driven by resource rents and by direct and indirect taxes; in countries such as Chad, Equatorial Guinea, and Nigeria, resource rents dominate the tax mix. The increase in resource rents has caused a split between countries mobilizing high tax revenues thanks to natural resources and others making efforts but unable to mobilize revenues because of a shallow tax base. Results of a computed average tax effort index—the ratio of actual tax collection and taxable capacity – for 1996-2013 confirm this: 27 of 47 countries have low tax effort indices, and several of them are resource rich. Even if they had increased their tax revenues from direct and indirect taxes, it is quite possible that the availability of resource rents would still have distorted the incentive for more efforts. Further, the tax composition (in percentage terms) has continuously shifted from trade taxes because of trade liberalization. Tax performance metrics (such as the ratio of the budget of the tax authority and revenue collected by the authority) indicate that Africa has a very expensive and inefficient tax collection system.

Overall, several African countries have room for improvement – whether in savings and investment rates, tax-to-GDP ratios, the tax mix, tax effort, the disincentive effects of revenue from natural resources, tax performance indicators, or the nature and reach of financial systems. Too few countries are paying attention to the expenditure side – to whether taxation is leading to efficient service delivery. A credible fiscal pact between citizens and the state can work only if citizens can see their tax dollars being used effectively.

Remittances to Africa amounted to $64 billion in 2014, or 14.8 percent of global inflows to developing countries (according to World Bank data). These are low set against other regions such as East Asia and Pacific ($122 billion or 28.3 percent of global inflows) and South Asia ($116 billion or 26.9 percent). Remittance inflows to Africa are now higher than official development assistance flows, even if not much higher than in other regions. However, more work needs to be done to ensure that remittances are not simply used for consumption; they should constitute investable resources with the potential to serve longer-term development needs. Equally important is to ensure a competitive market for remittance flows to reduce the high transaction costs of money transfers.

But the most important challenge for most African countries is to curb illicit financial flows. Such flows stem from factors such as weak institutions and governance, lack of regulation and information, and external borrowing. The African continent lost $60.3 billion to illicit financial flows on average over 2003-12 (calculated from Kar and Spanjers 2014), whereas average official development assistance for the period was $56 billion (OECD-DAC International Development Statistics online databases).

Strategies and initiatives for domestic resource mobilization

All 14 countries in the cases examined by the ACBF have, in one way or another, implemented policies to mobilize more resources domestically, especially since the Monterrey Consensus in 2002. Many countries have put in place initiatives to optimize tax revenues and reduce inefficiencies such as tax exemptions. To deal with illicit financial flows, measures have been introduced, for example, to prohibit the use of transfer pricing to evade taxes and to train staff to conduct forensic audits. Several African governments have liberalized their financial sectors and focused on product innovation and financial inclusion.

Some examples of strategies and initiatives for domestic resource mobilization include integrating revenue collection agencies in one coherent institution; introducing a value-added tax (as in Ghana and Togo); optimizing revenue collection from the mining sector; introducing presumptive taxes on informal activities by using indirect methods (as in Zambia); introducing a housing savings scheme and issuing diaspora bonds (as Ethiopia); and adopting mobile banking (as with M-PESA in Kenya).

Challenges

· Several parts of the African Union’s Agenda 2063 refer to Africa’s need both to become self-reliant and finance its own development and to recognize the importance of accountable states and institutions at all levels. In its call to action, Agenda 2063 explicitly mentions strengthening domestic resource mobilization, building continental capital markets and financial institutions, and reversing illicit financial flows from the continent. However, the financing of Agenda 2063 has hardly been examined, even though it is known that more resources must be mobilized domestically to reduce external dependence and that in some countries the sources of revenue must be diversified. (Much of the same could be said about the post-2015 agenda and the recently concluded Financing for Development Conference). The question remains: Who will finance the Sustainable Development Goals and how?

· To the extent that the bulk of financing will come from domestic sources, African countries must without doubt enhance domestic resource mobilization and curtail illicit financial flows. A raft of factors related to capacity building (human, technical, legal, regulatory, and financial) still prevent African countries from mobilizing more resources domestically and from fighting illicit flows.

· On the tax side, investing in the capacity of revenue authorities must be part of a broader fiscal reform agenda that includes simplifying and rationalizing tax systems (for example, reducing tax exemptions and dealing with corruption within tax administrations). The computed tax effort indices for African countries show that several countries, including resource-rich ones, are not making enough effort to collect taxes.

· More and better trained staff must be hired by the revenue authorities and retained with the right financial incentives, and they must be allowed to do their work without political interference. More needs to be done to build the capacity of revenue authorities to engage with taxpayers and foster a culture where taxation is seen as contributing to essential services. This means that governments need to be transparent and efficient on expenditures.

· Donors are potentially important in building tax capacity and enhancing domestic resource mobilization – including training staff, investing in infrastructure, and helping set up tax registries – but they allocate only a very small share of aid to these areas.

· The problem of illicit financial flows requires international cooperation and a global solution, but many African countries simply lack the capacity to deal with them. None of the countries surveyed showed evidence of successfully combating such flows. Substantial effort and political will are still required at the domestic level.

Key takeaways

· The African continent has made much progress in increasing tax revenues, but a number of countries lag behind. Compared with other regions of the world, tax collection systems in Africa remain expensive and inefficient. Several countries need to hire more and better trained staff members, who must be retained through financial and nonfinancial career-advancement incentives.

· The expenditure side is as important as the revenue side, if not more so. That is, citizens must be aware of what services they are getting in return for their tax contributions, and this means that governments must be transparent about program expenditures and must invest in awareness and education campaigns on taxation.

· Diverted public funds and wasteful government spending are serious problems in many African countries, reflecting poor governance, public administration, and institutions, with major imperatives for building capacity to mobilize domestic resources.

· Far more effort and political will are required to address illicit financial flows. This again entails hiring better trained staff with specialized skills and ensuring the cooperation of the local, regional, and international organizations responsible for tackling such flows.

· Building capacity for domestic resource mobilization is not merely about increasing tax revenue or savings. It also encompasses promoting good democratic governance, financial inclusiveness, and social justice – and creating the conditions and incentives for productive investments. The type of tax systems and funds for administrative procedures and the choice of financial models must be adapted to the characteristics of African economies and their production structures. The time is now ripe for African countries to go beyond traditional domestic resource mobilization – which is about increasing revenues and (public and private) savings – and to emphasize broad-based resource mobilization, in a holistic, transformational approach that considers national systems of innovation, imitative learning, and special harnessing of human capital.

· More investments are required in financial inclusion and product innovation, and human resources must be mobilized for the innovations needed for broad-based domestic resource mobilization.

· It is necessary to build institutional and human capacity for scaling up domestic resource mobilization. The capacity of institutions in the resource mobilization chain must be reinforced. And rules and regulations must be in place to ensure sound public financial management so that domestic resources promote inclusive and sustainable development.

· It is important to enact legal system reforms aimed at law reform, especially where the laws are inadequate or poorly functioning. Countries need to undertake reforms in the areas of taxation, banking, and capital markets. They need to maintain flexible yet effective laws and regulations to access nontraditional sources of finance and curb illicit financial flows. And they need to further develop tax reforms that will ensure tax harmonization and a move away from tax exemptions, concessions, and holidays.

· Along with the required rules, regulations, and human capacities must be the capacity of key continental, regional, and national institutions to improve domestic resource mobilization. These include the African Union Commission and its organs (especially those that deal with legal, audit, tax, and parliament related issues). They also include such specialized institutions as the ACBF, the African Development Bank, the African Tax Administration Forum, the Collaborative Africa Budget Reform Initiative, and the UN Economic Commission for Africa. And they include regional economic communities, especially the African Union-recognized groups that will play a great role at the regional level in the domestic resource mobilization chain. At the core, however, are national tax administration and revenue authorities.

· There is a need to foster visionary leadership, to change mindsets, and to address other soft capacities. A key element for successful domestic resource mobilization starts with effective, visionary, committed, and accountable leadership that sets the right tone at the top. Positive social norms, values, and practices conducive to domestic resource mobilization are needed, but the ability and willingness to learn from experience is equally important.

ACBF Virtual Library on Capacity Development http://elibrary.acbfpact.org

http://www.acbf-pact.org

The Zim. Gov. 2016 National Budget Statement on “Anti-Corruption Thrust”

ZimGov

XVIII. ANTI-CORRUPTION THRUST
1355. Mr Speaker Sir, Government reiterates zero tolerance for corruption in all sectors of the economy in order to foster good governance.

1356. Given that corruption has permeated every fabric of our national life and character, and is now in our blood as it were, and reminded of a translation of a Shona saying, “If you chase two rabbits at the same time, you never catch any”, it is imperative that we develop strategies that identify the most damaging forms of corruption.

1357. Accordingly, Government’s anti-corruption thrust in 2016 will target wide spread corruption through inflated and unrealistic pricing of goods and services sourced through the public procurement system, and leakages at our country’s borders.

Leakages at Borders
1358. Mr Speaker Sir, there are challenges with revenue leakages at border posts due to smuggling and corruption, with such activities depriving the fiscus of resources that should be deployed towards national infrastructure development and service delivery.

1359. Government is putting in place various measures to deal with the scourge. Implementation of some of these will be immediate, while others will require investment and time.

Immediate Measures
• Establishment of transparent systems for handling goods, vehicular and human traffic passing through our borders, including adherence to the principle of “First Come, First Served”;

• Installation of Closed Circuit Cameras at all critical points across the country’s points of entry;

• Introduction of Client Timeline Service Registers;

• Automation of systems at all border posts, parallel to CCTV coverage; and

• Visible Clients Public Notices of processes and timelines for delivery of various border posts services.

1360. Mr Speaker Sir, harnessing Information Communication Technology not only speeds up service delivery processes, but also optimises use of online platforms which minimise physical interface between service providers and their clients, which ordinarily creates opportunities for corrupt practices.

1361. These measures should be in place by the first half of 2016.

Procurement & Inflated Pricing
1362. Mr Speaker Sir, with respect to public procurement, rent seeking activities and behavior increase the cost of implementing projects and service delivery.

1363. Corruption challenges in this area are being addressed through a review of the governing framework and institutional arrangements to enhance transparency and accountability.

1364. As already alluded to, the conduct of procurement transactions will be devolved to the procuring entity level, while the State Procurement Board will have a framework setting and monitoring role to ensure procuring entities operate within the agreed parameters. This will deal with the potential conflict of interest that arises from the Board’s current dual transacting and oversight roles.

1365. The devolution will concurrently improve timeliness and efficiency in concluding procurement transactions by allowing managers the latitude to make procurement decisions within frameworks set by the State Procurement Board, while making such managers directly accountable for decisions.

1366. These will be complemented by provisions for:

• Review mechanisms to facilitate verification of bidders’ capacity;
• Publication of all contract awards and prices;
• Publication of mandatory progress and contract completion reports; and
• Reconciliation of above reports to budgets and timelines, to foster transparency and accountability.

1367. Government will also embrace the e-procurement platform to minimise opportunities for corrupt practices, while getting access to a wider selection of potential suppliers.

Anti-Corruption Agencies
1368. Mr Speaker Sir, efforts are underway to adequately capacitate the Anti-Corruption Agencies to effectively discharge their mandates in accordance with the provisions of the Constitution of Zimbabwe.

1369. Furthermore, appointments of the Commissioners of the Anti-Corruption Commission should be announced soon, following their interviews conducted by Parliament in line with the Constitution.

TRAFFICKING IN FRAUDULENT MEDICINE

TRAFFICKING IN FRAUDULENT MEDICINE

TRAFFICKING IN FRAUDULENT MEDICINE

Fraudulent medicines pose a considerable public health threat as they can fail to cure, may harm and even kill patients. These threats to public health have led the international community to call for a stronger and more coordinated response. Compounding this public health risk is the fact that the supply chain for medicines operates at a global level, and therefore, a concerted effort at the international level is required to effectively detect and combat the introduction of fraudulent medicines along this supply chain.

The 20th session of the Commission on Crime Prevention and Criminal Justice (CCPCJ) adopted resolution 20/6 on fraudulent medicines, otherwise referred to as falsified medicines due to concern about the involvement of organized crime in the trafficking in fraudulent medicines. At the same time, resolution 20/6 highlights the potential utility of the United Nations Convention against Transnational Organized Crime (UNTOC) for which UNODC is the guardian, in re-enforcing international cooperation in the fight against trafficking, through, its provisions, inter alia, on mutual legal assistance, extradition and the seizing, freezing and forfeiture of the instrumentalities and proceeds of crime.

As with other forms of crime, criminal groups use, to their advantage, gaps in legal and regulatory frameworks, weaknesses in capacity and the lack of resources of regulatory, enforcement and criminal justice officials, as well as difficulties in international cooperation. At the same time, the prospect of the comparatively low risk of detection and prosecution in relation to the potential income make the production and trafficking in fraudulent medicines an attractive commodity to criminal groups, who conduct their activities with little regard to the physical and financial detriment, if not the exploitation, of others.

Resolution 20/6 contains nine action points among which paragraph nine requests that UNODC, in cooperation with other United Nations bodies and international organizations, such as the International Narcotics Control Board (INCB), the World Health Organization (WHO), the World Customs Organization (WCO) and the International Criminal Police Organization (ICPO/INTERPOL), as well as relevant regional organizations and mechanisms, national regulatory agencies for medicines and, where appropriate, the private sector, civil society organizations and professional associations, assist Member States in building capacity to disrupt and dismantle the organized criminal networks engaged in all stages of the illicit supply chain, in particular distribution and trafficking, to better utilize the experiences, technical expertise and resources of each organization and to create synergies with interested partners.

While focus has been given to the health and regulatory aspect of this problem, it appears that less attention has been given to the issue from a criminal justice perspective. Given its expertise and work to build effective and transparent criminal justice systems and to support states to prevent and combat all forms of organized crime, UNODC can support the fight against the illicit manufacture and trafficking of fraudulent medicines in coordination with other stakeholders.

Additional Information:
(i) Technical Conference of Experts on the Trafficking in Fraudulent Medicines, 14-15 February 2013 in Vienna
(ii) Report on the 20th session of the Commission on Crime Prevention and Criminal Justice (CCPCJ)
(iii) Resolution 20/6: English and French
(iv) Contact UNODC

Source: http://www.unodc.org/unodc/en/fraudulentmedicines/introduction.html

The quest for economic freedom in South Africa is proving to be the ANC’s downfall

The quest for economic freedom in South Africa is proving to be the ANC’s downfall

The conventional interpretation of economic freedom in the Western world refers to the freedom individuals have to work, produce, consume and invest in an economy. But in South Africa it is interpreted as the material security of people.

It is this economic freedom that continues to elude many in post-apartheid South Africa. The fruits of economic prosperity have not necessarily trickled down to the broader population.

South Africa is ranked among the top five unequal countries globally with a Gini-co-efficient of 0.63. This is high. The index measures income distribution in households, with 0 representing perfect equality and 1 perfect inequality.

Using the Palma index, which measures the distribution of income ratio between the richest 10% and poorest 40%, South Africa is also highly unequal with a score of 7.5.

A key criticism against inequality measures is that they do not consider the impact that social welfare grants can make on reducing poverty. The Human Development Index shows that, while there has been some improvement, life expectancy is only 61 years and the average years children spend at school is ten.

South Africa’s welfare system has been expanded. But the government led by the African National Congress (ANC) is accused of giving people social grants instead of true economic freedom.

At the birth of the South African democracy in 1994 the idea of freedom was intimately linked to that of transformation, not just politically, but socially and economically. Democracy implied not just changing the state. It entailed a more inclusive ownership of the economy, with all citizens sharing in the country’s wealth.

This was evident in many ANC discussion documents, including its “Ready to Govern” policy guidelines for a democratic South Africa released in 1992. The first step to transformation was to secure political power. This would put the ANC in a better position to advance social and economic change.

In conceptualizing the role of the state, the ANC envisaged that it would remain the gatekeeper and driver of the transformation project. In its self-conceptualization, the ANC would continue to fight for the complete liberation of people.

After political power was seized, the liberator (as in the ANC) would then be charged with leading the complete socio-economic rebirth of society through transferring wealth from the rich to the poor. This would be done through a developmental state, which would seek to actively guide economic development to meet the needs of the people.

What is interesting is the sense of entitlement to govern that emerges. The liberator party, through state capture and cadre deployment, would advance the democratic aspirations of its people to wealth, prosperity and economic freedom. This of course implied a moral and ethical elite that carried the best of the people at heart.

Economic transformation of unequal societies in a democratizing context is difficult. It requires a creative mix of policy options underpinned by a commitment to social justice.

Two out of 54 African states have successfully pursued a developmental agenda while maintaining a degree of democratic legitimacy: Mauritius and Botswana. For a democracy to endure, the people must see it as legitimate and to be delivering the promised goods.

As South Africa enters its third decade of democracy, the socio-political environment is becoming increasingly volatile as inequality deepens. The country has high unemployment rates, and protests against a lack of basic services are an almost a daily occurrence. Business confidence is slowly declining in the midst of sluggish economic growth. We also cannot ignore the rise of systemic state corruption. And the failures of the education system could condemn future generations to a life of poverty and hardship.

In response, the ANC has sought to undermine institutions that should hold it accountable. These include the public protector and the the media. It has blamed history for the country’s economic woes. It has also undermined the doctrine of separation of powers and used cadre deployment to entrench patronage for state capture.

Democratic stability is being undermined through unethical actions, endemic corruption, and a lack of delivery on key socio-economic issues. This is exacerbated if a sense of entitlement to govern emerges within liberator parties. They eventually see themselves as accountable to the political party and not the people. They begin to believe that the liberator will govern forever.

Because the ability of people to hold the liberator accountable diminishes, discontent finds expression in violent and destructive service delivery protests. People opt out of the formal mechanisms of participation, such as elections. A little less than half of South Africa’s voting age population now do not participate in elections. Support for the ANC among the voting age population has declined to 35%.

In the midst of South Africa’s incomplete liberation because of a failure to make good on the promise of economic freedom, a mediocre track record of delivery on key socioeconomic issues and growing political volatility, the question that emerges is whether the liberator will relinquish power if the people will it so.

South Africa will hold local government elections next year. It seems that the ANC will either lose municipalities or win with smaller margins, thus reducing its dominance of municipal councils. Will the party respect the voice of the people, even when a vote is cast for another political party?

Inequality creates breeding grounds for revolt and instability, even against liberators. Societies only remain patient for so long before they start demanding the promised fruits of democracy and freedom. This can either be through the ballot box or through outright revolt. For South Africa, the 2016 municipal elections may very well give the country a glimpse into what extent the will of the people is indeed respected.

Joleen Steyn Kotze Associate Professor, Nelson Mandela Metropolitan University

Source: Quartz Africa

Grass is Browner on the Other Side

https://www.youtube.com/watch?v=fk09oQUlgno

“This book was written so that we may take heed and remold our story. I am certain that when enough of us become aware of how we are being exploited by the economic engine that creates an insatiable appetite for the world’s resources, and results in systems that foster slavery, we will no longer tolerate it. We will reassess our role in a world where a few swim in riches and the majority drown in poverty, pollution, and violence . We will commit ourselves to navigating a course toward compassion, democracy, and social justice for all.”

― John Perkins, Confessions of an Economic Hit Man