Three Way News: Reading beyond the headline

Monday, January 24, 2005

Reading beyond the headline

Report: Reckless Post-War Spending Causes Corruption

The ravages of modern warfare are too often compounded by ill-conceived and expensive post-war reconstruction projects that fuel a "feeding frenzy" of corruption and profiteering, according to a U.N.-funded report.

The report, citing graft from Liberia and Bosnia-Herzegovina to Lebanon and Afghanistan, said the overwhelming international response after wars was simply to pump large amounts of money into rebuilding programs without proper control.

"What is difficult enough to try to manage in times of peace becomes even more problematic in post-war situations where the sheer scale of works...and the weakness of public oversight create opportunities for the corrupt of historic proportions," it said.

"This results in a 'feeding frenzy' and a free for all in which the interests of the victims of tragedy are frequently swept down the river," added the report, compiled by anti-corruption organization Tiri for publication Monday.

Which leads Captain Ed to note:

Managing a flood of money can create its own difficulties, which we saw in the aftermath of the 9/11 attacks. The charities involved sent money into other programs or into unrelated management expenses, and in some cases, nowhere near the victims or their families. It took oversight and the publication of the misuse of these funds to correct the corruption and misappropriation. (While I'm not a big fan of Bill O'Reilly, he really forced the issue to the front pages and deserves a lot of credit for getting the problems resolved.)

What we see in this UN report is an attempt to shift blame for corruption from the UN to the donors. It would be analogous to declaring the 9/11 funds corruption the fault of everyone who opened their wallets to the victims instead of the organizations grabbing the money. After all, money is essentially amoral; it's a tool to use for whatever use its owner sees fit. The UN refuses to accept responsibility for managing these vast sums from "stingy" nations, which explains one reason why we get stingy when the UN sticks its hand out, despite the legitimacy of the cause.

It's not Captain Ed's fault that the Reuters article is poorly written. For example, the article states "The report made no reference to current events in Iraq". Except that it does, on page 4:

The end of major fighting in Iraq was announced in May 2003. It would be premature to characterise the country as ‘post-war’ by the summer of 2003, yet significant reconstruction contracts were being awarded by then. The country therefore offers some striking recent illustrations of waste in public spending. US Congressman Henry Waxman wrote on 26 September 2003 to the director of the US Office of Management and Budget, complaining about such waste:

As Tiri has done us the service of publishing their reports, the good Captain should probably read the reports before he passes judgment on what is in them.

The report notes four major problems with post-conflict reconstruction:

The belief that funds need to be spent quickly, and that normal administrative practices need not be followed.
The post-conflict governments are weak and transitory
Public works projects, as a class, are rife with corruption
Lack of oversight and coordination

In other words, the report Cpt. Ed criticizes (which is, itself, a publication of the issues) calls for greater oversight. Oversight and publication -- that's Cpt. Ed's recipe for success in the administration of donations post 9/11! Why, it's almost as if Cpt. Ed is criticizing the report for doing exactly what he said should have been done.

We should also note that in the situations under study, the UN was not administering funds. Rather, the funds were administered through NGOs and transitional governments. The UN rightly refuses to take responsibility for funds it does not administer.

Finally, the report does call upon donor agencies to help foster a change in attitude and to hold recipient agencies more accountable for actual spending. This call for help is a far cry from blaming donors for corruption.

4 Comments:

Is anyone reporting on the reconstruction projects that are already in progress? I'm no consiracy theorist, but how about this scenario. Immediately after the US declares victory, Halliburton gets a juicy post-war contract. Over the next two years the project site is under constant terrorist attack and bombings thereby expanding scope of the contract well beyond the initial agreement.

By Anonymous, at 11:42 AM

The report criticizes the use of foreign contractors, like Halliburton would be in Iraq. The report suggests that local workers are cheaper, more productive, and spend their wages locally, which boosts the economy. In addition, foreign corporations spend more on personal security. I suspect a visibly local reconstruction project would be more efficient.

On the other hand, of course, the local reconstruction effort would tend to be more informal, leading to less accountability and transparency. Accountability and transparency are the best weapons against corruption.

By Hammer, at 12:13 PM

Hammer you miss my point.

What I'm trying to get is an Internet consipracy started. People at Halliburton are themselves setting off bombs to increase scope/time on the project, thereby further lining their pockets.

By Anonymous, at 12:43 PM

Sorry to throw cold water on your conspiracy mongering. Why go to all that trouble when you can profit on human misery the old fashioned ways: kickbacks, slush funds, and cooked books?

By Hammer, at 12:57 PM

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Monday, January 24, 2005

Reading beyond the headline

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