Democracy! Democracy! Democracy!

Revenge of the Deplorables
January 26, 2017

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I’ve been writing a lot recently about global politics and the drivers and implications of the increase in populism. I’m returning to it again this week, not because of Donald Trump’s inauguration, but because of the launch of the latest update of The Economist Intelligence Unit’s Democracy Index, which measures the state of democracy in 167 countries globally. If, like me, you think that democracy is a good thing then 2016 was an unhappy year: the average global score fell from 5.55 out of 10 in 2015 to 5.52 in 2016, with 72 countries recording a lower score and only 38 an improvement.

One of the most notable features of the Democracy Index, which is compiled using the expertise of our team of country analysts, is that the US is now classed as a “flawed democracy” rather than a “full democracy”. The key driver of this is a decline in public trust in democratic institutions to historic lows. Mr Trump’s election was in large part a consequence, not a cause, of this trust deficit, which has been a long time in the making. Promising to “drain the swamp”, Mr Trump tapped the mood of deep popular disaffection with government and elected officials that has been growing in recent years. Across the Atlantic, the UK saw its democracy score increase, as the Brexit referendum led to a marked increase in popular debate and participation.

Democracy-lovers looking for a distraction should check out countries such as Portugal, Cabo Verde, Peru, Madagascar and Tanzania, which have been quietly making progress and improving their democracy scores. Let me know via Twitter @Baptist_Simon or email on simonjbaptist@eiu.com.
Best regards,

Simon Baptist
Chief Economist

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Give to Caesar What Belongs to Caesar!

LONDON, July 4 (Reuters) – Zimbabwe hopes to get its proposal to clear debt arrears with multilateral lenders signed off by December, enabling it to start talks with bilateral sovereign lenders. Finance Minister Patrick Chinamasa said Government is looking forward to the three multilateral lenders to formally adopt the country’s debt clearance strategy when they meet in December. In early March, the government agreed to major reforms including compensation for evicted white farmers and a big reduction in public sector wages in an effort to woo back international lenders.

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The Southern African country’s foreign debt stands at $8.3 billion, of which $1.8 billion is arrears. Zimbabwe is one of the few countries in arrears with the IMF. Countries are required to clear all arrears with multinational lenders before engaging in talks with other creditors. Zimbabwe owes around $110 million to the International Monetary Fund, which it hopes to clear against a special drawing rights (SDRs) allocation of around $130 million, Chinamasa said at a briefing at London-based think-tank Chatham House.

Britain’s joke politics

It is hard to pinpoint the exact moment in the last eight days at which Britain’s politics became officially more absurd than America’s. Last week’s Brexit vote, shocking as it was, was just the starting gun. Since then both the Labour and the Conservative party leaderships have collapsed. The “Leave” campaign has swiftly backtracked(paywall) on its promises. Labour’s Jeremy Corbyn, after enduring a stunning no-confidence vote, appeared to compare Israel with the Islamic State. The Conservatives’ Boris Johnson, the cheerleader of Leave and presumed next prime minister, bowed out after beingstabbed in the back by his own sidekick, Michael Gove. And a leaked letter from Gove’s wife exposed the Tory party’s leading figures as little more than the puppets of media barons.

The US primary season was by turns hilarious and horrifying, but it fulfilled its purpose: There are now the requisite two candidates for president, and the one who is a racist liar with no idea of how to govern is pretty unlikely to win. Britain has no credible leadership on any side, nor are there any clues as to where it might emerge. With astounding swiftness, the UK has replaced the US as the political laughingstock of the world.

This compounds the disaster of the referendum itself. If, as some hopeful pundits speculate, Brexit may yet be halted, it will take extraordinary leadership to mollify the pro-Leave voters who will feel cheated. If Brexit goes ahead, it will take equally extraordinary leadership to steer the economy through its impacts, and to negotiate new trade deals with an unforgiving EU and other countries. (Perhaps they should appoint Donald “I make great deals” Trump as chief negotiator.)

When Trump was on the ascendancy in America, many British politicians could hardly hide their smug disdain. How hollow that looks now.—Gideon Lichfield

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Fraud in Non-Profit Organisations

“I wrote an article on this a few years ago and interviewed a few experts on fraud in non-profits and why it tends to go undetected for so long. One theory was that non-profits are too trusting and assume that people who work for them respect the spirit of charity that the organization is built on. Unfortunately this isn’t always the case and a lack of internal controls combined with the limited staffing typical of non-profits makes it easier for employees in accounts to steal. Accounts payable fraud seems to be among the most prevalent, possibly due to situations where due to staffing limitations, one employee is responsible for too many financial tasks without checks and balances. If you’re interested in reading the article, you can find it here: Fraud in Non-Profits

Dawn Lomer

You are a Leader. You Suspect Fraud. Read This.

The story below illustrates what fraud examiners have always emphasised: When you suspect fraud, the first step is to secure evidence. How do you do that? You don’t have to go it alone. You can’t possibly know everything. Call the experts.

Manunure High School petrol-bombed

 HARARE, Newsday (March 30, pg 4) Manunure High School in Kwekwe had its financial records destroyed by fire following a suspected petrol bomb attack at the bursar’s office on Monday night. School Development Commitment Chairman Dickson Zhou confirmed the incident saying receipt books, computers and desks in the bursar’s office were reduced to ashes in the attack which took place around 8 pm.

crime scene

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