Corruption slows down poverty reduction- Worldbank

[job]

CORRUPTION SLOWS DOWN POVERTY REDUCTION STRATEGIES: LESSONS LEARNT FROM PENETRATION OF GRAFT INTO WORLD BANK PROJECTS.

Corruption has become so endemic in Kenya that it penetrates every sector, including direct-funded aid projects. It fights back vigorously as shown by the dangerous fangs exhibited by the untouchable Biwotts, Pattnis, Saitotis, Murungarus and Mwirarias. It literally threatens human lives driving those genuinely fighting it like John Githongo into exile.

The shs 50 Billion lost through Anglo-Fleecing and shs 18 billion lost through the CharterHouse scandals ( that's excluding Moi's Goldenberg scams) translates to more than ten times the amount now being credited by world bank towards poverty alleviation for about 2 million Kenyans.

That means Kenya could comfortably afford to have a solid poverty reduction strategy financed locally if corruption is checked. Kenya also has the capacity to revitalize, expand and develop it's infrastructure, education and health structures if good governance and control on corruption are genuinely given a chance.

I am not a great fan of the Bretton Woods credit and financing but if direct project financing offers direct benefit to the very poor, without disappearing in Treasury's corridors, or within its own procurement channels, what the heck, so be it. However it must be noted that the paltry amounts received in World bank loans is just a fraction of what is looted, fleeced and stolen from our coffers by the thieves masquerading as political leaders.

The World Bank has now signalled growing confidence in its ability to prevent corruption within its own projects in Kenya by approving two new development programmes totalling $154m OR about shs 10 Billion (to be disbursed in two phases).

The two projects are the most significant to be approved anywhere since the bank last week endorsed a heavily revised anti-corruption strategy that involves direct project financing and better procurement methods.

As we recall, the bank suspended most aid for new Kenyan projects since 2005 following the discovery of corruption networks between procurement contractors, government bureaucrats and its internal programme implementers.

The most common examples of graft in World Bank projects were bribes and kickbacks on procurement deals.

In one case, the $50m (sh 3.5 billion) HIV/Aids disaster response project, some funds were found to have been misused by -project insiders colluding with government officials and community-based and non-governmental organisations.

Corruption alongside tribalism will remain the hottest political issues in Kenya during the upcoming presidential elections later this year. Kibaki - elected on a platform that included pledges of zero-tolerance on corruption, has not had the will to have top officials prosecuted on corruption charges, instead overseeing plunder and looting of the nation's coffers through Anglo-leasing and CharterHouse scams.

Below is a world bank press release highlighting some of it's efforts towards checking graft and contributing towards poverty reduction.

World Bank Updates Strategy for Supporting Economic Growth And Poverty Reduction in Kenya
Strategy reflects the critical role Kenyans assign to good governance and anticorruption in further unleashing the considerable economic potential of the country

Press Release No:2007/304/VPU
Contacts
In Washington: Beldina Auma
In Nairobi: Colin Bruce

WASHINGTON, March 27, 2007— The World Bank Board of Directors today endorsed the updated strategy that would guide the Bank's relationship with Kenya through June 2008. It also approved new financing of US$154.5 million to support new livelihood opportunities for some of the poorest Kenyans and to encourage better management of the forests and water catchments on which their livelihood has long depended.

This makes Kenya the first country to have its Country Assistance Strategy (CAS) updated after Management and the Board reached agreement on March 22, 2007 on principles that would guide programs with governance and anticorruption components.

“Kenyans have long identified poor governance and corruption as a major constraint to simulating and sustaining economic growth and poverty reduction,” says Colin Bruce, the Bank’s Country Director who led consultations with the Government of Kenya, and a large number of local and international stakeholders and experts during the updating of the strategy. “There is universal agreement that recent economic gains in Kenya can be multiplied and sustained if further and faster progress is made on governance,” he adds.

Under the updated strategy, the World Bank Group will continue to emphasize themes agreed upon as important in 2004 when the strategy was first prepared. These include strengthening public sector management and accountability, reducing the cost of doing business, and improving the investment climate. Other themes are reducing vulnerability of communities and investing in people through support of projects that provide social services such as health and education.

Consequently, along with its endorsement of the updated strategy, the Board approved two projects totaling US$154.5 million that will benefit about 2,000 of Kenya’s poorest communities and over two million individuals who live within the project areas. These are the Western Kenya Community Driven Development and Flood Mitigation Project, and the Natural Resource Management Project. Support is also being processed for HIV/AIDS, which now affects young women disproportionately, as well as for malaria and tuberculosis.

The Executive Directors endorsed an approach to lending in support of these themes that involves undertaking safeguards and due diligence analysis in areas where corruption risks are high, before proceeding with lending. This approach was developed after earlier forensic reviews of some World Bank financed projects confirmed corruption risks.

The strategy continues to emphasize strong partnerships with other development agencies in the spirit of the Paris Declaration on Aid Effectiveness and now includes an understanding reached with the Government on deepening partnerships beyond the executive branch of Government, including with the judiciary, professional bodies and civil society organizations.

“The approach captures the essence of the balance that many of us are trying to strike in backing feasible reforms that make more headway on governance and anticorruption, help the poor today, build country-wide systems that provide fiduciary assurance tomorrow, and generate gains that stand the test of time well into the distant future,” observed Walter Lindner, Germany’s Ambassador to Kenya. Mr. Lindner was involved in the consultations on the CAS and is also head of the rotating leadership of the European Union. He also noted the progress in governance that has already been made.

The strategy recognizes that Kenya’s macroeconomic environment has become much sounder. But it calls for deeper governance and economic reforms to consolidate and accelerate growth. Whether Kenya can accelerate growth and poverty reduction, partly lies in its ability to robustly tackle inequity and ensure better governance. This would attract even more private investment, increase competitiveness, create jobs and underwrite programs for the chronically poor.

The Board urged the Government to vigorously implement its revised governance and anticorruption program which includes measures to make the public sector considerably more transparent, overhaul Kenya’s procurement system, further streamline business licenses and begin modernizing the judiciary.

While some new lending will support progress in governance, other projects in agriculture, health and infrastructure will be triggered as progress is made in addressing the underlying institutional and implementation bottlenecks.

For example, progress by the Government in implementing proposals in its roads strategy and governance program for independent rural, urban and intercity roads authorities would trigger additional funding for roads construction, including toll roads through public-private partnerships. Such progress significantly increases the chances that these investments will be successful.

The World Bank approved US$ 154.5 million in new financing for communities living in some of the poorest areas of Kenya.
The first credit is US$ 86 million for the Western Kenya Community Driven Development (CDD) and Flood Mitigation Project.

It will create new opportunities for the local communities in Western Kenya to engage in wealth creating livelihood activities and reduce their vulnerability to flooding.

The second credit of US$ 68.5 million will be invested in the Natural Resource Management Project to help Kenyans better manage water and forest resources, and improve the livelihoods of surrounding communities. Preparation of these projects took about two years and involved extensive consultations with beneficiaries and others.

“These projects reflect our commitment to continue supporting policies that target more aggressively the most vulnerable people with assistance that equips them to help themselves,” says Colin Bruce, the Country Director for Kenya.

Western Kenya is rich in natural resources but the local communities remain poor and vulnerable to flooding, disease and natural resource degradation. Poverty is aggravated by perennial flooding, natural resource mismanagement, the HIV/AIDS pandemic and malaria. Women and children, particularly orphans and widows, are especially vulnerable.

The Western Kenya CDD and Flood Mitigation Project will provide technical support and funding for demand-driven, income-generating micro projects in 600 communities, including 200 projects earmarked for youth groups in Siaya and Bondo, Western Kenya. There is also funding for the fight against malaria. Over one million community members will directly benefit from CDD activities. Another 1,000 communities will receive support for economically viable investments which encourage the sustainable use of water and other natural resources in the upper catchment of the Nzoia and Yala river basins. The project will also invest in a flood early warning system and improved flood mitigation infrastructure.

The Western Kenya CDD and Flood Mitigation Project supports key livelihood investments such as rice farming, horticulture farming, bee keeping, dairy goat keeping and poultry farming that can be managed by the most vulnerable men and women.

Job

[roughrider]

Job,

You ought to know better than this.

Nothing, I repeat, nothing good can come out of the Bretton Woods. Take that from one who has spent considerable time studying the architecture of the international financial system. But even before I try to reason with you about this, which I might do in subsequent posts, it is not lost on me the irony that at this point in time when Paul Wolfowitz is in the middle of a serious corruption scandal, we can be discussing the World Bank and Corruption in any positive light! If I recall right world bank officials on Kenyan soil have been corrupted. The bank does not employ angels. I would be more comfortable if our own institutions were made corruption free and their integrity restored. Short cuts do not help. In any case, the Bank is probably happier when their money is stolen by public officials, we become dependent clients - who even borrow to pay debts.

Take a look at this:

www.commondreams.org/archive/2007/04/13/498/

Maybe it is not obvious but the recent twin statements from the IMF and the World Bank basically giving the Kenyan government a breather are closely tied to the 2007 elections, the so called anti-terrosrism efforts in the horn of Africa, Sudan, China and the positions that the US and the UK are now taking on these domestic and geopolitical issues. Read between the lines and make your own conclusions. Any narrow asssessment is perilous and myopic.

But more broadly, the recent moves by the IMF and the World Bank are about maintaining a longer-term stranglehold on Kenya. They are about control.

I can state without any fear of contradiction that we do not NEED those dollars at this point in time. We can run a budget that is 99% from our domestic resources and we can achieve economic freedom. It is often remarked how the ONLY Dollar that Vietnam needed from the World Bank to cut poverty in half between 1990-1995 was David Dollar who spent those years advising them on macroeconomic policies… they actually did not need tied aid and where they got some it did little good.

Later...