“I'm all right Jack!”

This was a popular phrase in the UK back in the 1950s when the middle class was doing very well. In North America and Europe, the white middle class was prospering and nothing else very much seemed to matter. If people are doing well then other issues get very little attention.
It took Russia's launching of Sputnik to shake the mood of complacency, and then the civil rights movement in the USA and the end of colonial rule in Europe.
The events of 9/11/01 when terrorists struck in the United States should have served to break down complacency about failed relief and development rather than simply serving to strengthen a resolve to prove the “north” has a God given right to its wealth.
Not taking notice about the failure of relief and development is certainly going to undermine the security of the “north”, maybe soon, but definitely in the long run.

My job ... my career

My job and my career are key to the decisions made by individuals. I used to think that decisions were made in a vacuum and were objectively decided based on the facts. But the facts that are mostly taken into consideration are those that relate to whether the decision is going to benefit me, my family and perhaps, at a stretch, my community.

I was in Ethiopia at the end of the great famine in the 1980s. Millions had died, and a huge relief community had grown up in Addis Ababa in response to the crisis. At last rains had come, and crops were doing well for the first time in years. The UN's relief operations in Ethiopia were closing down, the staff were depressed and getting ready to leave.
While the boxes were being packed up, a fax came into the office. Locusts had been found in a northern part of Ethiopia. There was a palpable happiness that this was an impending new disaster, and the relief operations would need to be reactivated.
It was one of those moments that I will always remember with profound disgust.
Though it happened several decades ago, I remember it as if it was yesterday ... there was something deeply discomforting about this happiness on top of news of a crisis that would kill people.

21st Century Robber Barons

The world's elite does not seem to believe that there is one human race, and that all people should be treated right, that everyone should have some opportunity to share in the world's wealth.
There is a community of elite that have a single focus on what is there in it for me, and this mindset has been very profitable.
It was recently reported that hat the largest eight corporate organizations in the world control more of the world's global wealth than do 50% of the world's poor. A staggering amount of wealth has been concentrated into the world's wealthiest groups and the corporate world.

The old UN practice of budget adjustment

I had difficulty believing this when I found it.
For years and years the United Nations Development Programme (UNDP) had a practice of adjusting the budget of its projects to the actual expenditure prior to closing them out. Under this system, there was never any reported variance between budget and actual. Just a report of actual expenditures, with budget no longer in the record. They also used to adjust the objectives in the project paperwork so that the final reports would show that the projects achieved the objectives. The costs projected and the objectives used to justify the expenditures at the beginning of the project simply disappeared from sight.
Worse ... many of the UN staff did not seem to understand how inappropriate these accounting mechanisms were. I do not know if these practices have been changed ... I hope so, but they were the standard practice for much longer than a decade to my certain knowledge.

Kill the Messenger

Eventually I was deemed a non-conforming consultant and did very little work for the World Bank Group after that. A few bank staff who wanted objective assessment, no matter what the outcome, continued to give me assignments, but that was a very small group.

Liberia – Cooperatives and Other Organizations

A World Bank agricultural project in Liberia had, inter alia, encouraged the formation of agricultural cooperatives as a way to improve rural sector socio-economic performance. Our assignment was to confirm that cooperatives were effective and that other parastatal entities were not an effective organizations in the sector. This report with favorable conclusions was a condition for second phase financing of the project.
I am an accountant. I can read financial statements ... if I am allowed to read then and if they exist. It turned out that they did exist ... a small government office had done audits of all the cooperatives in the country, big and small, and prepared audit reports. I was told about the office, not by the project staff, but by some people in a small cooperative who knew this work was being done.
Initially I was not allowed to go to the office, but I eventually did go to the office and was told that I was not allowed to see the reports. Eventually I managed to see the reports and was able to make a comprehensive analysis that showed more than anything else the scale of the theft that was taking place in the big cooperatives (supported by the World Bank project) and the excellent performance of the little cooperatives run by community farmers.
I also showed that one of the parastatals was excellently managed and performing very well and with almost no inappropriate political influence, while two other parastatals were operating in a disastrous fashion with heavy political influence. The issue was not the form of the organization, but the competence and the integrity of the people involved.
The Government and the World Bank were not pleased. The conclusions of the report were that the World Bank and project supported cooperatives were nothing more than a vehicle for removing funds into private hands. The problem of next phase conditionality for financing was easily solved. The World Bank and the government agreed to remove the conditionality. And as for the consultants ... we never got the pay owed to us!
Two years later the World Bank eventually realized that it needed to pull out of Liberia ... nothing was working and it was embarrassing the World Bank!

Fish Meal in Malachal, Yemen (PDRY)

I visited Malachal. Yemen (PDRY) as part of a World Bank mission in the late 1980s to see a fish meal industry investment and evaluate the performance of World Bank investments in fisheries.
It was not a good situation. There was a big fish meal plant, but very little fish were being caught to supply the plant. Apparently some incompetent “experts” had recommended that the economies of scale of a bigger fish meal plant would solve the problem of failed smaller plant. The problem was not the fish meal plant, but the fish resource. Two seiners had been operating and were catching much less than anticipated ... and with the resource in question it was quite irresponsible to invest a lot of money in a bigger fish meal processing operation.
In the original planning for the fish meal plant investment it was clearly set out that validation of the resource was a critical first step to be done before there was a major investment in fish meal processing. Subsequent consultants ignored this, as did the World Bank experts and the government.

There’s a hole in the bucket

Where has all the money gone. Over the past 40 years as much as $2 trillion has been disbursed through the relief and development sector, and at the end of this time there is a lot of debt, but rather little development. Many of the problems of development are blamed on lack of money and financial resources, without being specific about there the money flows are being measured. The fact of the matter is that there a large amount of money has gone into the system, but rather little of it has been getting to where it is needed. Some of the fund flow loss is plain corruption and fraud, and some is poor decision making.

I was introduced to the idea of fraud and bribery and corruption in a book published in the 1930s called “Very Private Business”. It was loaned to me by my first accounting supervisor early in my training as a Chartered Accountant. While I was expected to learn the mechanics of accountancy, I was also expected to live and work in the real world. This book opened my eyes to the creativity of people when a lot of money is involved. Later, when I had my own accounting responsibilities in the US corporate arena I remembered lessons from the book, and tried to build accounting and control systems that would make it difficult, if not impossible for the creative crook to run off with the company's assets.

Corrupt Shrimp Project in Yemen (YAR)

But it did have benefits. The trawlers were costing considerably more than was planned for the project, and much more than I would have allowed my old company to pay. I learned conversationally that the billing price was higher than the original quotes which is shorthand for saying that someone is getting rich at the expense of the project, and as I learned more about the accounts of the project it was apparent that almost everything was being substantially marked up.
The accounting information about project performance made it clear that the project would never be able to justify itself ... and the mission team and technical staff of the World Bank and a co-financier (DANIDA) quickly made the decision that the project financing should be immediately terminated.

From Nigeria in the 1970s

I was in Nigeria and friendly with some of the Central Bank staff in Nigeria at the height of the cement scandal. Hundreds of shiploads of cement were sold to Nigerian businessmen using irrevocable letters of credit. Because of a huge overload situation in the Nigerian ports, there were very long waits to come in to unload. International businessmen know their trade, and most of the ship charters were “time charters” which means that payment for use of the vessel depends on how long it is being used ... and with the port congestion this became a very long time ... months instead of days to get into port. With bribery it was easily possible never to get into the port.
The situation was totally out of hand, and a disaster for Nigerian businessmen.
The Central Bank decided that it would solve the problem by revoking “irrevocable” letters of credit, something that had never ever been done by serious international financial institutions. I commented at the time that in 5 minutes the Central Bank had done damage to Nigeria's reputation that would take decades to rebuild. More than 30 years later, Nigeria's financial reputation is still a shambles.

Brunei

The people of Brunei are poor, very poor. But the Sultan of Brunei has been listed as one of the richest individuals in the world for decades.
Where did this wealth come from. For many decades Royal Dutch Shell has been exploiting the oil resources of Brunei. When you connect the dots, the conclusion is that the wealth of the Sultan and the poverty of the people are something to do with Shell.
Everything, I am sure has been “legal”. But that does not by any stretch of the imagination, also make it ethical and right.

More from Nigeria since the 1970s

I was working a lot in Nigeria during the early 1970s befoe the OPEC induced oil shock increased the price of crude oil from $3.50 a barrel to $13.50 a barrel and made Nigeria and other oil exporting countries very, very rich.
During my many visits to Lagos, I stayed at the Ikoyi Hotel and watched the flood of foreigners, mainly Europeans and Americans, who arrived in Nigeria intent on getting profitable contracts signed no matter what. Most arrived with lots and lots of cash, which they exchanged for signed contracts for everything under the sun. Most contracts were not worth the paper they were written on, but the Nigerians were happy, and the foreigners were happy until they got back to their homeland and realized how little of value they had for their money and effort. These were heady times, and the world's greediest people were on a feeding frenzy.

Making Corrupt Money in Fisheries in Burma

A big part of the fishing industry in Burma was controlled by the government through an organization called the Peoeples Pearl and Fishing Compnany (PPFC). PPFC was losing money operating large modern fishing trawlers, which did not make any sense based on the nature of the fisheries resource and the characteristics of the fishing vessels. As a former fisheries and seafood company CFO I knew something about the industry and its operations. I also knew something of the state of the Burmese economy and its shortages. Something was going on.
As part of the World Bank mission we traveled by boat from Rangoon to the mouth of the Irrawaddy River, the same route used by the PPFC trawlers. Many hundreds of small motorized fishing vessels were active near the mouth of the river, and it suddenly became clear what was happening. The large trawlers were supplying fuel to these fishing vessels and making a fortune for themselves. The official price for fuel was 3 and the black market price was around 30 ... so a good profit. And bluntly put, private profit to benefit political leadership and the elite is much more use than the profit from fishing that would accrue to PPFC.
And for small people ... there was another area of opportunity. When I looked closely at the fuel storage facilities I noted that almost all the flanges joining the pipes were leaking ... not a lot, but something. And under every leak there was a small can collecting the fuel. The official economy of the country was not working, but there was an underlying enterprise economy that was alive and well, albeit illegal.

Escaping from Ethiopia

Ethiopia under President Mengishdu was not easy ... and for some ethnic groups is was especially bad ... and worse for people identified as being against the regime. I knew a teacher who had this profile. In Europe or the USA, she would have been on the fast track, and an asset to the educational establishment. But in Ethiopia she was facing no job ... no money ... no future.
She had determined that she absolutely had to leave Ethiopia. She tried to get a passport, but her money was stolen by the officials ... all of it. She was left with no money and no passport.
With nothing, she decided to walk out of Addis Ababa over the mountains to Sudan ... to the refugee camps on the Sudan side of the border. I know she left. I don't think she arrived. Hardly anybody did.