Not just about a 20 cent bus fare rise

From a protestor on the ground in Brazil:

Brazil is living through a special moment today, it’s true. Some well-applied political programs over the last decade have brought impressive results: economic inequality — a real cancer of which Brazil was practically world champion — has been reduced notably. The Bolsa Família program has had much success to reduce poverty and the investments in higher education for the poor as well as for ethnic minorities have shown encouraging results.

This is not about questioning the things that have worked well. These experiences of the last 10 years under the administration of the PT (Partido dos Trabalhadores, or Workers’ Party) must be protected and expanded if one wants to create a more just society, with less poverty and exploitation from the forces of the past, like the feudal lords from the Sarney family. This is not just about protesting against the government of the PT, against the President Dilma, or against Geraldo Alckmin, Fernando Haddad or Eduardo Paes. This is about freeing the country from its authoritarian, dictatorial, and cruel heritage.

If, at the end of these protests, the political class of Brazil — a class for itself more than any other — and its army of capitalist crétins who enrich themselves not through work but thanks to their personal connections, its journalists who prostitute themselves in the interest of an elite, its policemen who kill without hesitation, if all these oppressors are removed from power and forced to recognize that an era of real democracy has arrived, then I will be very happy to pay 20 cents more for my bus rides.

People power has cracked the walls of tax secrecy – now we have to bring the walls down

end tax dodging

“But our actions are perfectly legal, and what you are calling for is completely unrealistic”, said the slave traders of the early Nineteenth Century. Campaigning by ordinary people defeated them. Fast forward two centuries and the tax dodging debate sees a similar clash.

Less than a year ago campaigners were castigated as dreamers for calling for an end to tax secrecy, tax trickery and the race to the bottom.  Were we being too radical? Have a look at these calls for action made to the G8:

“The trillions hidden in tax havens make urgent action essential. We need to stop the triple looting of poor countries – of their land, of their mineral resources, of the taxes they are due.”

“Remove tax incentives that encourage companies to shift profits around. Avoid tax competition turning into a lose-lose proposition. Identify the real people behind shell companies which facilitate the hiding of tax liabilities. Increase transparency around company ownership to help prosecute evasion, money laundering and terrorist financing.”

Can you guess which radical NGO made them? The first statement was made by the French Government. The second one by the US Government.

In the end, leaders are led, and the power of the people is stronger than the people in power. Can one intergovernmental meeting fix it? No.  But after this year of corporate scandal, popular mobilisation, media controversy, shuttle diplomacy, and leaders’ gatherings, no one representing a major government – no one – now says that campaigners’ ultimate aims are wrong. The power of (extra)ordinary people is winning the debate.

Because some good people stood outside coffee shops, visited their MP, sent emails, signed petitions, came to rallies, organised their faith groups and local communities, told their family and friends; because some good politicians put their populations before the plutocrats, asked tough questions and pushed for tougher laws; because some bold media exposed tax cheating; because brilliant wonks learnt to talk human; and because some absolutely hopeless company bosses helped fuel their own PR disasters …. because of all of these things we now have an unstoppable momentum to stop tax dodging.

People power has cracked the walls of tax secrecy. Now we have to bring the walls down.

The Battle of Jericho

More on the worst corporate scandal you’ve never heard of

A month ago, I posted on the Ranbaxy drug scandal – a shocking tale of systematic fraud by one of the world’s leading manufacturers of generic drugs. After the US regulator had used a whistle blower to bring the company to some kind of justice, I wondered what regulators in other countries were doing to protect themselves from medicines that were being manufactured without any proper safeguard.

Now, thanks to the Telegraph, we have an answer for the UK. And it’s a depressing one, with the regulator repeatedly ignoring emails from  Dinesh Thakur, the executive who had seen at first hand that “lying to regulators and backdating and forgery were commonplace.”

In November 2005, he wrote: “The reason I am writing to you is to alert you that Ranbaxy is defrauding the UK government and the British public and hoping that [you] would be able to do something to stop this crime.”

He also urged the MHRA to contact the FDA’s chief investigator, who he said would be able to verify his claims.

In reply, he was thanked for “bringing this matter to our attention”.

A day later, he warned of “widespread and pervasive wrongdoing at Ranbaxy” and said he could put the MHRA in touch with a former executive at the company who could provide more evidence.

He hoped the MHRA would take action against the company which “has committed so many crimes to make a quick buck”. He wrote: “Given the past experience with this company, I am afraid that they are quite adept at the art of covering up their fraudulent practices and your inspections may or may not provide you with the conclusive evidence you seek.”

In the first half of 2006, Mr Thakur received a reply from an MHRA official that they were “evaluating data supplied to us from other regulators regarding recent inspections … I can assure you that appropriate action will be taken where necessary”.

Mr Thakur made a final attempt to rouse the agency in February 2007. “I wish the MHRA was as vigilant and protective of public health in the UK as the US FDA is in the USA,” he wrote.

As I suggested in my original post, someone should now follow up with the company’s British ex-CEO, Dr Brian Tempest,  now chair of the advisory board of Lancaster University Management School, and too busy to speak to reporters in the superb Fortune story that first exposed this sorry tale.

Posted in UK

What’s the $10 trillion question?


Global consumption grew by $10 trillion from 1990 to 2010. So the $10 trillion question is who benefited and how much?

In a new paper we explore who have been the winners and losers since 1990. And thus, what happened to global and national inequality since 1990.

We find that in the last 30 years falls in total global inequality are predominantly attributable to rising prosperity in China. We also identify a persistent global structure of two relatively homogeneous clusters (the poor/insecure and secure/prosperous). We detect the emergence of a ‘new global middle’ but question whether this implies the end of the historical two cluster world rather than merely a transition as some people move from the poor/insecure cluster into the secure/prosperous cluster.

We find that 15% of growth from 1990 to 2010 went to the world’s richest 1% while just a modest amount of redistribution would have ended $2 poverty. If the share of 1990-2010 global growth flowing to those who were $2 a day poor in 2010 had increased from 5% to just 12% this would have been sufficient to end $2 poverty today.

We find five different stylized patterns of national growth: pro-poor growth (eg Ethiopia); pro-middle growth (eg Brazil); anti-poor growth (eg Nigeria); anti-middle growth (eg Zambia) and equitable growth (eg Vietnam).

What just happened?

Who benefited from twenty years of growth and globalisation? In our number crunching we find the following three things:

Continue reading

The right recipe for democracy

“There’s more to democracy than free and fair elections”.

This is a refrain we’ve heard more than once since the anti-government protests broke out in major Turkish cities two weeks ago.

On Wednesday, a Turkish lawyer and university lecturer, Zaynep Ayeata, made this point again on The World Tonight. Former Foreign Minister, and one of the founding fathers of the governing Justice and Development (or AK) Party, Yasar Yakis, responded by telling us Turkey is still developing its democracy and it is not perfect. Remember that until the past decade, the Turkish military played a dominant role in the country’s politics.

Then, look at today’s presidential poll in Iran – does the fact the Islamic Republic hold elections make it democratic? Many would say no, not really. They could point to the fact that the candidates are vetted ahead of the elections, and that this year the two considered to be reformists were barred from standing at all, limiting the choice voters have.  There are also the limited powers of the President in Iran. He – and it has always been a he – does not hold the most important political office in a complex system which is truly presided over by the Supreme- in both a political and religious sense-  leader, Ayatollah Ali Khamenei.

But even in the “mature democracies”, we’ve had reminders in the past week that there is more to democracy than voting. An ex CIA whistle-blower,  Edward Snowden, has revealed through the press that the United States Government has been carrying out widespread secret surveillance both of American citizens’ telephone communications, and of internet communications of people all around the world, probably including British citizens.

The US authorities insist this surveillance is aimed at preventing terrorist attacks and few Americans are disputing this kind of activity may be necessary, but there is concern in Congress and civil society about the secrecy and what they see as lack of democratic oversight of government security agencies.

Do these three stories really have much in common?

It seems to me they do and that all of them illustrate there are two other fundamentals needed for effective democratic governance: the separation of powers and accountability.

In Turkey, the Prime Minister, Recep Tayyip Erdogan, has won three elections in a row and his AK Party got half of all votes cast in the last one two years ago. He promised then to be a Prime Minister for all Turkish citizens, not just those who voted for him. But, the protesters who’ve been defying the tear gas and water cannon of the police for two weeks think he’s broken his promise and is not listening to them.

Turkish lawyers, who have joined the protests, argue there is still not a clear separation of powers in the country and the judiciary is not sufficiently independent from the government, so it can run roughshod over opposition to its policies.

There has also been criticism of the media in Turkey – much of it controlled by big businesses which benefit from government contracts – for being reluctant to cover the protests when they first started. The government has also fined two smaller TV stations for carrying live coverage of clashes between police and protesters.

There’s another weakness to Turkish democracy and that is the lack of a strong opposition party in parliament to hold the AK government to account, which is another reason opponents of Mr Erdogan may have felt the need to take to the streets to voice their unhappiness at his policies – be it the redevelopment of one of the last remaining parks in Istanbul or restrictions on the sale of alcohol after 10pm, or one of the other grievances raised by protesters.

Neighbouring Iran’s political system – at least on paper – appears to have checks and balances built into it. But, in practice, the political and religious authority of the Supreme Leader means Ayatollah Khamenei, who cannot be removed by the voters, wields huge and largely unaccountable political power.

In the US, the issue thrown up by Mr Snowden’s revelations also revolves around accountability. In Hong Kong, where he’s taken refuge, the former CIA operative told interviewers he took action to defend the basic liberties of people all around the world. But, back in Washington, the debate has been less about the rights and wrongs of such surveillance, and more about the ability of Congress – the people’s elected representatives – to hold the government to account for what it is doing. If the surveillance is taking place in secret, the argument goes, how can legislators do their jobs properly?

Winston Churchill famously said “democracy is the worst form of government, except for all those other forms that have been tried from time to time”.  So has the past week once again shown that Churchill had a point?

Democracy is far from straightforward and requires much more than elections to deliver legitimate government. Other essential ingredients seem to be a separation of powers between different branches of government, including an independent judiciary that enables the rule of law; and an independent media, an effective elected opposition, and open government to ensure accountability.

The former Turkish Foreign Minister, Yasar Yakis, suggests Turkish democracy is a work in progress, but perhaps that’s the case everywhere – even in countries where it has been established for much longer.


Revealed! Inside the IF Campaign


Now everyone’s talking about the IF campaign. Saturday’s rally in Hyde Park was on TV, radio, and in pretty much every Sunday paper. More importantly, the IF campaign message can be seen in churches, mosques, synagogues and charity shops across Britain, it is being discussed in school classrooms and student unions, and it’s gone viral online. (My son said to me that he was playing on the computer when he came across a picture of David Beckham, clicked it and saw a message about the IF campaign. Lesson 1: I have no idea what my son is up to online – I am a bad parent. Lesson 2: IF is connecting with a new generation of young people – we have great campaigners.)

Of course, some people say that no one is talking about IF. Indeed there are now hundreds and hundreds of blogs about how no one is talking about IF, all with lots and lots of comments agreeing that no one is talking about IF…

But what’s it like inside the campaign? I’ve read a few pieces about what really goes on, which remind me of John Lennon’s remark that he loved reading music reviews, because from the reviewers he found out what his songs really meant. So here’s a few reflections from what actually happens.

What doesn’t happen:

We don’t plan how to help David Cameron get re-elected.  Last night Ed Miliband came to an IF event to say what a great campaign it has been and how he’ll do everything he can to support it. Of all the people who’d want to help re-elect the PM I reckon the Leader of the Opposition isn’t one. The campaign is genuinely non-partisan, it’s about the agenda of tackling the causes of hunger.

We don’t plan how to promote the expansion of the “New Alliance for Food Security”, established at Camp David, as the answer. Hence the IF campaign statement “The expansion of the New Alliance is not the answer.”

We don’t talk about the G8 as the solution. We talk about the G8 as the group of governments who are meeting this month in the UK  where we are based, who have a major role in the global economy and who need to stop being part of the problem – on land grabs, on tax dodging, on the lack of transparency. We are all involved, also, in supporting campaigning by Southern civil society movements to hold Southern governments to account. Continue reading

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