By Tomislav Jakić.   From Friday, January 20th 2017,  the United States of America have a new President – for many, not only in USA, still at least controversial and in the extreme version: totally unacceptable Donald John Trump. In a precise ceremony in front of the Congress Trump gave his oath and delivered his first speech as head of state. And for everybody who is not biased or has not become prisoner of prejudices, he announced a complete turn in regard to the US policy, as it was until now. This turn can be detected in a couple of key messages which are, admittingly, populist, but not without a deeper political contents. First of all, Trump confirmed that he is a convinced enemy of political elites, accusing them of prospering while ordinary Americans suffered. To the “forgotten men and women” of America he promised: “You are not forgotten any more and you will never be forgotten again”, adding that the day of his inauguration marks not the transfer of power from one political party to another, but from Washington DC to the people. Then, using – historically speaking – the slogan of American isolationists, he stressed that from this day in deliberating on any decision only one principle will be applied and that is: America first! (accepting that every state in the world has the right to put its interests above everything else). After that, more clearly than ever before, he repeated what he said for the first time accepting the nomination of the Republican party as presidential candidate. Last summer, namely, he announced that the US will stop imposing regimes. In his first presidential address he was even more precise: America will not impose her way of life to anybody. It is worth noting that the “American way of life” was until now sort of a sacred cow in the vocabulary of American politicians. Trump added that the US will be a shining example and the other will follow (if they want, of course). And finally he said something that European neofascists, who (wrongly!) think of him as “one of them” would never understand: “If you open your heart to patriotism, there is no place for prejudices.” Had he said nothing more, this speech should be remembered. Therefore it is absolutely wrong when the reporter of the German public TV (ARD) says this was not a presidential speech at all, but only a continuation of the election campaign. By the way it would be interesting to hear what would this so called liberals say had he after the inauguration changed his rhetoric and contents. They would lament about hypocrisy and not-consistency. But, as Trump remained consistent, they wrote him off as somebody who did not grasp at all that he is the President and is just continuing his campaign. But, objectively speaking, the messages we mentioned have – for everybody willing to hear them – mark not only the beginning of what Trump described as the necessity to turn form empty words to deeds. The core of his economic policy can be detected from the short slogan “buy American and hire American”. And only after being 30 minutes in office he put into question the multilateral trade agreements for American continent and Pacific region, confirming what he announced during the campaign, namely that he prefers a net of bilateral trade agreements instead of those multilateral. He did not mention any of the concrete problems he will confront as President, such as relations with Russia or health insurance system in the US. But, it was a programmatic speech, based on crucial messages and principles. He did, however, mention radical Islamism (not Islam, but radical Islamism), promising that he would eradicate it from the face of the Earth, for which he will without any doubt need cooperation from Russia. He repeated that he will create new jobs in America, he spoke again about the decline of former US industrial centres (“inspiring” the German television to say that this is simply not true, but forgetting how many times we had seen the empty fabric hales in Detroit and empty streets in the now declining and many years ago prosperous American cities). And he promised, once again, that he will change this situation, that he will build new highways, new bridges, new railroads. Some objected immediately that he did not say: how. It would have been almost a miracle had he done so in a situation when many of his planned members of the US government still lack the Congressional approval and when even some of them voice opinions quite different in regard to his own. Be it, as it is, Trump has his vision of the future and he outlined the corner-stones on which he intends to build his vision, despite his critics who were not hesitating to say that he does not understand today’s world. Some analysts heard in his words the echo of the inaugural speeches of the most famous American president of the 20th century, Franklin Delano Roosevelt and some said they had the impression that Bernie Sanders, the “apostle” of the democratic socialism in America is speaking through Trump’s mouth. We would dare to go even one step further. If we put aside Trump’s person and the fact that he is extremely rich, and if we forget his repeated mentioning of God at the end of his speech, we can come to one conclusion only: what was said by Donald Trump should be embraced by every liberal leftist in the world. Caring for ordinary, forgotten people, wealth for everyone, equality between all people (“we can be black, brown or yellow, but we all have the same red blood”), transformation of a system which benefited the politicians, while the middle class suffered, starting of new production, the transfer of power, it is worth repeating, not from one political party to another, but from the Washington elite to the people, all this can be seen, let us not deny this, as a populist, if not even a nationalist approach. But, at the same time it is closer to the left side of the political scene, than to the right one. These are the first impressions based on Trump’s inaugural speech. But, let us make one thing crystal clear. This is not a noncritical pledoayer for Donald Trump, who has many minuses – from the total lack of political experience, the unnecessary and potentially dangerous antagonizing of the People’s Republic of China to the very dubious hints about his energy policy or his standpoints about the global warning phenomena. But, at the same time it is a pledoayer for much needed and long overdue change of American policy which made the world unstable and insecure and which made the global terrorism a real threat for everybody and everywhere by accepting the protagonists of this terrorism as allies in its projects of toppling the regimes in the Middle East. Yes, such a change, even if it would be Trump’s turn, would be mostly welcome. Of course, if he delivers, what he had promised: it stops here and it stops now. In only a few months we will know if he would be able to transform into reality his vision of America and its new role in the world. Not more: just a few months. After that we will know if Trump’s turn can become a success, or not. And his voters will know if he was right, when he promised them on the Inauguration day. “I will never let you down”. About the author: Tomislav Jakić, born 1943, is a Croatian journalist – TV and press, specialized in covering the international relations. He was foreign policy advisor to the second President of the Republic of Croatia, Mr. Stjepan Mesić.      

By Lingbo Zhao. After the Eighteenth National Congress of the Communist Party of China, a new round of anti-corruption campaign has been going on. With almost fifty provincial officials, more than 600 director-level officials and more than 200,000 petty officials snared, this campaign is being conducted in a harsh way on a large scale. More importantly, as Vice Primer  Qishan Wang pointed out, the ultimate goal is to reach the “would not think of it”stage from the current “would not dare”stage. In order to realise this goal, the passive control and surveillance measurements which have been carried on over decades may not be able to meet the demand. What should be prior taken into consideration is institutional designs for a clean government. If we look for a successful example for China on anti-corruption reform, Hong Kong may be a good one. During the 1960s, with the increasing population and the rapid expansion of manufacturing industry, Hong Kong was faced with a similar situation which corruption was wide-spread around the force and the community in mainland China nowadays. (Manion, 2004) And yet since 1974 when the Independent Commission Against Corruption (ICAC) was created, the anti-corruption interventions has empowered to accomplish the transformation. This commission, according to the Basic Law, functions independently and is directly accountable to the Chief Executive. (Scott, 2011) So the article is conducted by analysis on causes of corruption and anti-corruption measurements in mainland China, followed by the evaluation and comparison of Hong Kong and mainland China. Though sharing a Chinese culture, great difference remains between each other. Especially when we focus on the anti-corruption achievement, Hong Kong, considered as the freer market from government intervention, has incredible achievements in combatting institutionalised corruption while China, during two decades of anti-corruption campaign, remains one of the most corrupt countries. This article considers the rooted causes and problems of the anti-corruption strategy in mainland China. By introducing the incidence of Chen Xitong and the general situation on state personnel corruption, it argues extent, forms and characteristics and the institutional loopholes of Chinese government. Meanwhile, the process of the transformation in Hong Kong will be illustrated empirically and compared with the process in mainland China. The key part——ICAC will be evaluated. And the suggestions of establishing such commission in mainland China will be introduced and tested. The main researching method is new institutionalism by focusing on the institutional design and informal practice in mainland China. The definition of corruption Corruption, simply speaking, means the abuse of power for illegal monetary transaction. One of the most comprehensive definitions that by a short simply wording incudes both a public and private sector corruption comes from a Vienna-based Prof. Anis H. Bajrektarevic: “Seemingly victimless, hidden trade-off between influence and gain” (Bajrektarevic, Palermo Treaty system, Addleton NY, 2011). The World Bank defines (public) corruption as the abuse of public office for private gains. However, when it comes to a definition in concrete terms which contain too much connotation.(Girling, 1997) In addition, the causes and the results of public-private sector corruption are diverse. It can be traced in governments and civil societies, which include economic systems, administrative systems, judiciary systems and so on. (Harris, 2003) No matter how broad and complicated the concept is, it can reflect rules and violators who against those rules can be identified and punished. (Gambetta, 1999) In the Chinese context, there are two major definitions that can be applied to China in the transition period. For those who are in favor  of a tough enforcement and party disciplinary, they would like to provide a more broad-based definition which includes public offices, public interest and public opinions factors. By contrast, for those who are in favor  of an effective effacement and market efficiency, they would focus on the abuse of public office. (Sun, 2004) Though there is no formalistic answer to the question on what the definition is, this paper would use a definition corresponding with the Chinese context. The corruption is defined as the abuse of authority or the public power by occupants in the government or the party to gain private interests. This interpretation narrows down to the public office level that focuses on the abuse of public power in the political activities. Corruption in Mainland China The process of corruption in China after 1949 can be roughly divided into two periods. There is the classical communist period from 1949 to 1976 and the socialist market from 1976 to the present. (Harris, 2003) From 1980 on, the development of corruption took place together with the legitimating of financial pursuit, delegation of power to an individual or an agency, fast expansion of the market economy, deficiency of the Party’s discipline as well as delaying in introducing regulatory control and required on time legislative renewal. (Kwong, 1997) One case disclosure shocked the public. That is that the mayor of Beijing——Chen Xitong was found directly engaging in bribe taking, with numerous bribe givers and huge material rewards. Even for Chen Xitong, whose downfall is often interpreted as political, the size of his booty warranted his fate. Two private villas, where Chen spent his leisure time and kept his mistresses between January 1993 and February 1995, cost the public nearly Y40 million in maintenance fees, and Y1.05 million in catering expenses. According to Sun (2004), “The villas were filled with luxuries ranging from gold doors and agate floors to extensive maintenance and security. Eventually, he was sentenced to 16-year jail term. ”(p. 148). In Alan Liu’s categories, the forms of corruption in mainland China can be roughly divided into three groups. The first one is universal in all political systems including bribery, embezzlement and abuse. The state property is still a main target but not the only one. Instead, it is the greater inducement from and dependence on the market that now defines the forms and methods of violation. The second type is related to the economic reform, such as accounting violation and privilege seeking. When decentralisation was carried on gradually, autonomy and increasing resources have facilitated corruption dynamically. Precisely, there is linkage between economic liberalisation and corruption. Third one is resulted from moral degradation in a broad way. Sun (2004) states that “even here the marketplace has stimulated distinctive forms of moral deviation in recent years.”(p. 51). Causes of corruption in China The growth of corruption is considered as a policy outcome.(Gong, 1997)It results from mainly the economic reform in an unconscious way during the reforming and opening period. In general, economic reform which is for market development and economic growth, has built up the advantageous condition for the explosion of corruption. Increasing business opportunities, the looser economic policies and the higher payoffs motivated officials to get involved in corruption. To break through the planned economy which made the economy in China stall market economy was introduced to China 30 years ago. Wedeman (2012) states “this reform help China accomplish an economic miracle,” which also makes China lie on the top in the international community. As the continuous development of market economy and reform and opening going deeper, corruption has come out as an ineluctable social phenomenon. During the reform of economy, market competition is one of the most important factors which cannot be underestimated. When analysing the relationship between market economy and corruption, both western and Chinese scholars found out the paradox. There is a negative correlation between economic growth and corruption. Firstly Paolo Mauro, followed by other economists, found that the higher the rate of corruption is, the lower the rate of development is. Empirically, they drew out a conclusion that when the rate of corruption increases one point, it results in the reduction of one percent in economic growth. Theoretically, this statement also can be correct because equality and justice are the key factors of market competition. However, this kind of developmental corruption model cannot successfully reflect the facts in Mainland China where we can see the increasing corruption rate together with the fast development of market and economic growth. Some severe realities are quite obvious. The number of officials corrupting keeps increasing. The involvement in business field of governmental officials is enlarged. Corruption, originally a concealed individual behaviour, is turning into an organised collusion such as Shanghai Gang. (Gong, 1997) As I mention before, there is a paradox about the relationship between market economic growth and corruption. Admittedly, corruption keeps developing in Mainland China together with the rapid growth economy. Gong Ting (1997) uses a conceptual framework which is the interactions of formal and informal practice from new institutionalism to give the explanation. She believes that corruption, as an informal practice, is actually a production of formal practice with loophole. They are interactional to some extent. To stamp out corruption, the starting stage should be on the amendment towards formal practice such as legal framework, judicial system and institutional design. As for the judicial system, she also points out that the wide spread of corruption is facilitated by the way the courts are organized and supervised. The courts, in mainland China, are not different from other governmental agencies. They are not independent. The local government decides the finances of the courts. Senior judges are nominated by the local CPC Committee and endorsed by the local People’s Congress, meaning judges whose decisions are seen to violate Party policy may be discharged or otherwise punished. The courts are subject to the extra-legal authority of the Political-Legal Secretary of the local Party Committee, which deals with difficult and important cases referred to it. (Manion, 2004) Anti-corruption strategy in Hong Kong What makes Hong Kong’s economy successful? Several points below are worthy being remarked such as low tax collection, freedom in market competition, a relatively efficient legal system, an efficient and effective network on transportation and communication and “a competent workforce working along with a pool of enterprising entrepreneurs”described by Howlett (1997, p.47) (as cited in Manion, 2004). Those factors not only significantly contribute to the economic development in Hong Kong but also enable Hong Kong’s economic wealth which does good to combatting corruption as the government can afford the salaries of civil servants and enough human and financial resources can be committed. (Quah, 2003) Different from the Central Commission for Discipline Inspection of the Communist Party of China (Zhongjiwei), the ICAC operates independently in terms of structure, power, finance and personnel. Before 1997, there was a direct access between its Commissioner and the Governor. After July 1997, the ICAC is directly responsible to the Chief Executive. So far, the ICAC has developed into three major functions which are investigation, prevention and education to fight against corruption in Hong Kong. (Scott, 2011) The Structure of the ICAC As for its structure, there are main three unequal branches and the Administration Branch. Among the three departments, the largest one which is the Operation Department takes the responsibility of the investigative function. The over nine hundred employees takes up 73% of the ICAC human resource. The head of the Department also serves as the Deputy Commissioner, assisted by two Directors who are in charge of the government sector and the private sector respectively. The second largest one is the Community Relations Department. The two divisions of this Department are mass media and the public. It has 202 staff which is 16% of the total staff in the ICAC. Intensive education projects are conducted in schools and business sectors. In addition, it also builds up a close relationship between mass media and district organisations in order to raise the public awareness and gain their support towards the anti-corruption movement. The smallest department is the Corruption Prevention Department (CPD), taking up 4% of the total employees in the ICAC. In concrete terms, the objectives of the CPD is to inspect the practice and procedures of government and public bodies. Also, it takes the responsibility of making amendments and suggestions on the working methods. Training for civil servants is also offered by the CPD for the purpose of prevention. Apart from these three departments, there is a separated administration department. It is in charge of human and financial resources and general matters such as accommodation and technologic service. Besides, an advisory committee is to examine the work of each department. The ICAC also has its own recruitment practice. The employees are recruited out of the control of the Public Service Commission, which makes the staff of the ICAC separate from other governmental sections. During the recruitment process, the ICAC itself takes the whole responsibility of promotion, screening, interviewing and other process. As for the financial fund of it, by the 2001/2002 financial year, its budget has reach 81 times compared from the first year when it was established. This rapid increasing in budget reflects the strong will of the government on the support of the ICAC anti-corruption enforcement. (Quah, 2003) Comparison on Anti-corruption Strategy in Mainland China and Hong Kong Institutional Designs The main difference in mainland China and Hong Kong is the anti-corruption agencies. In Hong Kong, the ICAC is an independent agency with power and increasing budget. More importantly, the Commissioner of the ICAC is directly answerable to the Chief Executive, which makes the ICAC a separated agency apart from other governmental departments. (Harris, 2003) However, in mainland China, unclear boundary exists between the party and government branch. Junctional jurisdictions are dominated by communist party committee generalists at each level. The second point is the institutional design. In Hong Kong, one of the three important methods of anti-corruption is the prevention through institutional design is; in mainland China, certain economic reform policies actually stimulate corruption. Reorganisation of procedures to reduce incentives for corrupt transaction has been shown recently. Finally, the analysis will go back to the basic ground of anti-corruption strategy which is the constitutional design. This essential difference lies in the two different regimes. Hong Kong has a functioning rule of law regime and effective civil liberty while mainland China is conducted by a rule of law regime less constructively and neglect of civil liberty. (Manion, 2004) Hong Kong’s institutional design not only focus on the enforcement measures but also pays high attention to the prevention by offering suggestion. The ICAC’s Corruption Prevention Department is to study the work procedures in governmental departments to identify opportunities for corruption. (Manion, 2004) Having studied and analysed, suggestions would be offered so as to reduce the possibility of corruption by redesigning the working procedures. Further, after the suggestions are given, the Department is still in charge of checking the effectiveness of the suggestions, making sure the new design would not offer ground for new chances for corruption. The function as consultant is one of the key and unique notion of this department, especially when the government is on its way to draft and amend legislative text and policies. To a great extent, this function makes sure the anti-corruption movement starts from the beginning level where new laws are introduced for an incentive purpose. Also in mainland China recently, more attention has been paid towards designing incentive structures from the original forcemeat stage. In Anhui province in 2000, the “taxed for fees” reform was adopted from the perspective of being incentive. The reform is to reduced possibility of corruption in the township governments and villages by reforming the basic collection system. It replaces a single agricultural tax, capped at about 7 percent of income and collected by higher level governments, for various fees and charges levied by township and village administrations. Compared with the previous regulations against illegal fees in 1990s, Manion (2004) described that “the reform frees officials at the rural grassroots level from fee collection and makes corruption at the township and village more difficult.”(p. 205) In 2003, this reform was successfully adopted nationwide, becoming a good example in mainland China of transforming to the incentive structure. According to policy analysts, the key part of institutional design in Hong Kong is the independence of the ICAC and it is what mainland China should emulate when reforming the anti-corruption strategy. This refer to the exclusive anti-corruption mission of the agency: “The ICAC is not embedded in the civil service or any other larger organisation with multiple goals”. Among this, the most important is the police force remaining independent, especially in the 1973 context of a public perception of that department as the most corrupt of all. Agency independent worked in Hong Kong primarily because this agency design worked as a signal, a public announcement of an “equilibrium switch”——but it worked especially well in a particular context. With corruption structured this way, the creation of an agency that effectively rejected the police as anti-corruption agents helped legitimate the government effort and enlisted ordinary citizens as voluntary enforcers. Independent was complemented by power, also an element of agency design: the ICAC was given strong investigate powers and considerable financial resources. Legal Framework Difference also lies in the law set in Hong Kong and mainland China. The reasons behind it are partly contributed by the different policy choices which illustrate different experience and views. From a perspective of a higher degree, however, basic difference on constraints of power should be noticed. A solid legal foundation has become the base of Hong Kong’s anti-corruption reform. Two important legislative context have to be introduced. The Prevention of Bribery Ordinance was strengthened in 1971. It provided with a clear definition by including “unexplained income or property”which can serve as the evidence of corruption practices. Clarity, stability, scope and whether it is easy for application, all the points above greatly influence on whether and how a corrupt official can be punished according to law. (Quah, 2003) To build up a clear legal basis, several points should be well defined. Legal clarity, breadth, stability, and ease of application all contributed to a situation where corrupt officials were routinely punished according to law. And the public confidence of the anti-corruption enforcement is also, to some extent, basing on whether the law is harsh without loopholes. On the contrary, in mainland China, the main force on combatting corruption is centralised by the CDIC which plays as a leading and administrative role. But as for the legal system itself, it remains weak. What depletes the development of law and a legal-based authority in mainland China? One point should be noticed that under the leading of the CDIC, the investigation and punishment are conducted within the party system. This makes lag when a criminal case is transferring into the prosecution process. So the agency design which makes anti-corruption enforcement outside the criminal procuratorates system may be one of answers to the question above. (Gong, 2004) Besides, the law making process is also not propitious. The first criminal code was passed in 1979. Then comes rapid changes on political economy which forced law makers refine the law with taking lots of new factors into consideration. The role of law and its distinction between party leadership shows a fundamental contradiction in mainland China. The law should serve as a powerful tool to fight against the abuse of official power. (Manion, 2004) Conclusion China’s path of corruption is actually quite similar to the process in Hong Kong, rapid growth in population and economic transition. By viewing Hong Kong as a good example of mainland China, we can find basically one main loophole which is the ambiguity of power between the party and judiciary from both legal and institutional prospective. If mainland China are going to set up an independent agency like ICAC in Hong Kong, a clear boundary must be well-defined. First of all, as for the institutional setting, it is to avoid the interference from the government and the party in order to ensure authority and transparency of this agency. Second, it is to reduce delay when a corruption crime transferred from the investigation of the party to the prosecutors. Further, even though the “fight against tigers”movement achieve success for the current situation, refining the present legal framework still remains the determinant. —————— About the author: Ms. Lingbo ZHAO is a candidate of the Hong Kong Baptist University, Department of Government and International Studies. Her research interest includes Sino-world, Asia and cross-Pacific. Contact: harryzhaolin@gmail.com   Bibliography:

• Girling, J. (2002). Corruption, capitalism and democracy (Taylor & Francis e-Library ed.). London: Routledge.
• Gong, T. (1997). Forms and characteristics of china’s corruption in the 1990s: Change with continuity. Communist and Post – Communist Studies, 30(3), 277.
• Gong, T. (2004). Dependent judiciary and unaccountable judges: Judicial corruption in contemporary china. China Review, 4(2), 33-54.
• Harris, R., 1947. (2003). Political corruption: In and beyond the nation state. New York: Routledge.
• Heywood, P. (1997). Political corruption. Malden, MA: Blackwell.
• Kwong, J. (1997). The political economy of corruption in China. Armonk, N.Y.: M.E. Sharpe.
• Lee, Peter N. S., 1940. (1991). Bureaucratic corruption during the deng xiaoping era. Hong Kong: Hong Kong Institute of Asia-Pacific StudieManion, M., 1955. (2004). Corruption by design: Building clean government in mainland china and hong kong. Cambridge, MA: Harvard University Press.
• Quah, J. S. T. (2003). Curbing corruption in asia: A comparative study of six countries. Singapore: Eastern Universities Press.
• Scott, I., 1943, & City University of Hong Kong. Department of Public and Social Administration. (2011). Corruption control in hong kong: Rules, regulations and policies. Hong Kong: Dept. of Public and Social Administration, City University of Hong Kong.
• Sun, Y., 1959. (2004). Corruption and market in contemporary china. Ithaca, N,Y: Cornell University Press.
• Wedeman, A. H., 1958. (2012). Double paradox: Rapid growth and rising corruption in china. Ithaca: Cornell University Press.

   

By Dario Poli. In my years of working, creating and studying as and when I could, I tried to apply certain standards to my own life, especially when battling to overcome the daily problems of life I had to face within my own world and as I often faced rude and quite aggressive personalities, who thought little of insulting me or others who could or would not agree with them. My interest in good manners and the skills of diplomacy evolved from these unfortunate experiences and I began to learn that there were many more interesting and even pleasant ways of getting one’s point of view across to another human being without recourse to the aggressive or vulgar. I discovered that by using diplomacy and tact in a proportionate and appropriate manner, lead to improved relationships with other people and was a way to build and develop mutual respect, which in turn lead me to more successful outcomes and less awkward or stressful communications as I grew to understand, that diplomacy were skills based on an comprehension of other people and being sensitive to their opinions, ideas, feelings and beliefs. I found this wonderful piece of philosophical writing by E.M. Forster that was close to my inner being, as it eloquently expressed my regard for diplomacy. So I felt it was time to share it with you. Dario Poli. “I believe in aristocracy though, if that is the right word and if a democrat may use it. Not an aristocracy of power based upon rank and influence, but an aristocracy of the sensitive, the considerate and the plucky. Its members are to be found in all nations and classes and all through the ages and there is a secret understanding between them when they meet. They represent the true human condition, the one permanent victory of our queer race over cruelty and chaos.“ From a 1941 essay by E.M. Forster. My favourite quote of E.M.Forster is; “If I had to choose between betraying my country and betraying my friend, I hope I should have the guts to betray my country”. Short biography of E.M. Forster Edward Morgan Forster OM CH, better known by his pen name E. M. Forster, was an English novelist, short story writer, essayist and librettist who was born in 1 January 1879 died on the 7th June 1970. He was best known for his ironic and well-thought out novels that examined and exposed the class difference and hypocrisy in early 20th-century British society. Forster’s instinctive impulse toward humanistic, sympathetic understanding, may be summed up in the epigraph to his 1910 novel Howards End: “Only connect”. His 1908 novel, A Room with a View, is his most optimistic work, while A Passage to India (1924) brought him his greatest success. He was nominated for the Nobel Prize in Literature in 16 different years

• Movies: Maurice: A Room with a View, Howards End, A Passage to India, Where Angels Fear to Tread, A Diary for Timothy, Plug.
• Short stories: The Machine Stops, The Other Side of the Hedge, The Other Boat, The Life to Come

 

Capitalizing and profiteering from the occupation: corporate human rights violations in the occupied territories.   By Aleksandra Krstic. While the new cold war is taking its momentum, the world community is gradually forgetting other pressing issues; such as human rights, right to labor, human dignity and respect. Of course, the national and international corporations hereby play a major role when comes to respect and observance of social and labour rights. Even at the Geneva-based world standard-setting organization, that of ILO (International Labor Organization), corporation have a strong say. What is the degree of due diligence deployed by corporations today? Does the corporate world comply with the law and standards of business conduct, transparency of business operations? And – importantly – does the private sector respect standards of international humanitarian law, especially in situations of armed conflicts and the so-called forgotten conflicts? Places where open hostilities have ceased, but yet peace has never really come. Notably, does the corporate world comply with the set of important international standards such as the UN Guiding Principles on Business and Human Rights or the OECD Guidelines for multinational corporations, to name just a few? Could we go as far as to claim that in some cases the private corporate entities play a decisive role in funding, enabling and facilitating permanent changes in economic, demographic and cultural character of the occupied territories? And if so, does it serve, to say, dual purpose: a corporate gain and a prolongation of the occupation on the given territory?   To understand the gravity of that problem, let’ take as an example conditions in Caucasus – a typical case of the forgotten conflict – region where war stopped, still peace has never arrived. Armenian companies, as well as foreign (mostly diaspora controlled, such as the Lebanon-based Artsakh Roots Investment; the US-based Tufenkian Foundation; Armenian General Benevolent Union /AGBU/; Cherchian Family Foundation, etc.) businesses play a decisive role in funding, enabling and facilitating permanent changes in economic (including fiscal and monetary), demographic and cultural character of the occupied territories both for private gain and for supporting the prolongation of the occupation of these territories. Over the past years, the well-orchestrated transfer of Armenian settlers from Armenia and elsewhere into the contested territories (via e.g. Hayastan All-Armenian Fund), including the areas adjacent to Nagorno-Karabakh, in particular the districts of Lachyn, Kalbajar, Gubadly, Zangilan and Jabrayil, has continued with accelerated pace. To worsen the things, fishing of the human souls exploits an epic human tragedy of Syria and its people: The shadowy Armenian Revolutionary Federation (ARF) is deceiving Syrian Armenians with an instant-better life promise if they relocate from e.g. Qamishli and Aleppo cities in Syria to Caucasus and its occupied territories (e.g. Zangilan, Gubadly and Lachyn districts). Nearly a mass-manipulation replica of the famous call to Bosnian Croatians from Zagreb to settle the former Serb inhabited and ethnically cleansed territories of Croatia. This is of course, a direct criminal meddling into the domestic matters of two sovereign states. Armenia, directly or via its corporate proxies, continues permanent energy, agriculture, social, residential and transport infrastructure changes in the occupied territories. This is increased and prioritized as to change the demographic character once for good: That of course includes the construction of irrigation networks, water-canalization, roads, power-grids and other vital economic and social facilities. (Several international reports, conducted independently by different FORAs, repeatedly confirmed that property of IDPs has been appropriated. E.g. that empty houses of Azerbaijani internally displaced persons were often dismantled for use as construction materials or that new houses are being built on their lands and properties.) Armenia exercises pervasive control over the entire economic and commercial system in the contested territories, including inbound and outbound trade flows and economic resources. Tacit presence of the international companies is rather interesting: there are hundreds of various types of US-manufactured Caterpillar machines, farm tractors and equipment of US-based John Deere and Germany’s Deutz-Fahr companies, South Korean Hyundai trucks, Belarus MT3-82,3 model farm tractors, as well as other heavy machinery for illegal mining, agriculture, expansion of settlements and construction of the supporting infrastructure. The true ownership for most of those companies remains unclear, as oftentimes registered offshore in Cyprus, Liechtenstein and the like. Often their funding is channeled through the branches of Armenian banks operating in the occupied territories and conducting international financial transactions via intermediary banks in Russia, EU and elsewhere. Further on, a numerous foreign retailers, from Ukraine, the US and the EU states (particularly from France, Bulgaria, Hungary, Belgium, Germany, the Czech Republic, the Netherlands), as well as from Australia and UAE, have concluded their supply contracts with Armenian companies. That, of course, makes them complicit with Armenia’s occupation of the territories, drain of resources, expansion of illegal settlements as well as with a violation of fundamental rights of IDPs. Little wonder, since Armenia’s high-ranking officials, including President Sargsyan, PM Abrahamyan and other ministers, routinely visit the occupied territories and inspect production facilities there. To camouflage the illegal nature of production there, Armenian agricultural and liquors export companies (e.g. “Stepanakert Brandy Factory” and “Artsakh Fruit CJSC”) routinely mislabel the products wholly or partially produced or packed in the occupied territories as originating from Armenia, thus misleading governments, international retailers and consumers. The agricultural lands in the contested territories along the Araz River (Zangilan and Jabrayil districts, too) have been illegally appropriated and extensively exploited by Armenia. This poses a stress on natural water flows (for consummation, irrigation or opportunity for an illegal electricity generation) and soil (overuse of arable lands and monoculture cropping) – which, in return, alters micro climate and jeopardizes the biota and human existence (e.g. Armenia’s Arm Water Project Company Ltd. in the Araz Valley). Dismantling of infrastructure (metals, pipes, bricks and other construction materials) from the ruins of demolished Azerbaijani households and public buildings was previously conducted more sporadic. However, the currently examined cases show that it becomes more organized system of pillage with a clear foreign involvement. Mining of the precious minerals and metals is one of the main enterprises in the occupied territories. E.g. Gyzylbulag underground copper-gold mine (wholly owned subsidiary of Armenia’s Vallex Group CJSC, registered in Liechtenstein), led to its almost complete depletion. Similar faith is of Demirli open-pit copper and molybdenum mine. In 2014, Gold Star CJSC reportedly started exploitation of gold near Vejnali village (occupied Zangilan district of Azerbaijan). Since 2007, GPM Gold, a subsidiary of Russia-based GeoProMining Ltd., has been extracting ore in Soyudlu gold mine in the occupied Kalbajar district. There is an illegal traffic in natural resources across the occupied section of the international border between Azerbaijan and Armenia that is controlled by the armed forces of Armenia via Armenia constructed Vardenis-Aghdara highway. The Government of Armenia, via its Energy Ministry, is directly operating: The ore concentrate from Gyzylbulag is transported to Armenia, where it is further processed into gold containing copper and exported to international markets, mainly to Europe. Armenia is also extracting coal from the mine near Chardagly village in the occupied part of the Tartar district to supply the power plant in Yerevan, Armenia. There is a clear correlation between the business and the political status quo. Hence, it is safe to conclude that the prolong occupation directly translates into more mineral, agricultural, water resources and other wealth for the neighboring government and gloomy international business. Demographic engineering is a key here, and is – of course – done by conflicting the fundamental human rights and norms of humanitarian law, including those of IDPs. In its epilogue, a clandestine population-reshuffle coupled with illegal economic activities on the contested territories produces the notorious “blood diamonds”: socio-political status-quo, demographic inversion, and extension of the armed conflict. Is there anything larger than a problem of such a huge gravity for the resident population? Of course, there is. Our silence about it !   ——————— About the author: Aleksandra Krstić, studied in Belgrade (Political Science) and in Moscow (Plekhanov’s IBS). Currently, a post-doctoral researcher at the Kent University in Brussels (Intl. Relations). Specialist for the MENA-Balkans frozen and controlled conflicts. Contact: alex-alex@gmail.com    

By Anton Lutter. This last part of my previous article, will focus on the frontrunners of the two government parties and some new contenders and smaller parties. The largest government party, the VVD (Volkspartij voor Vrijheid en Democratie/Peoples party for Freedom and Democracy, liberal but in the Dutch context centre-right) is headed by the prime minister Mr. Mark Rutte. Born in The Hague in 1967 he has already a long career in politics. During his history studies at Leiden University he became the president of the youth organization of the VVD. After his studies he worked for several companies at the same time being on the national board of the VVD. In 2002 he became Undersecretary in the Social Affairs and Employment ministry, until 2004 in the first and second Balkenende cabinet. In 2003 he was elected to the Tweede Kamer (parliament), but served only briefly to continue as undersecretary. Again from 2004 until the fall of the Balkenende II cabinet in june 2006 Rutte served as Undersecretary for Higher Education and Science, within the Education, Culture and Science ministry. He then immediately returned to parliament and became the leader of the VVD parliamentary group. His leadership position within his party was consolidated after he won the contest for this position from Mrs. Rita Verdonk, the Minister of Justice. He has been uncontested in this position as of now not in the least place because of the fact that he led his party to a large victory in the parliamentary elections in 2010 making the VVD, with 31 seats, the largest party in parliament for the first time ever. Rutte himself became the first liberal prime minister since Mr. Cort van der Linden became prime minister in 1913, at the same being the first prime minister for the VVD. As frontrunner in the 2014 elections he enlarged the VVD seats to 41 and until now is serving as prime minister. In the february 2017 elections he will be the frontrunner fort the fourth time. The other government party is the PVDA (Partij van de Arbeid/Labour party, socialist). The PVDA is the only party which held a leadership contest for the next general elections. The contest in december 2016 was between Diederik Samsom and Lodewijk Asscher. Samsom born in Groningen 1971 and a nuclear physicist by trade, was elected to the Tweede Kamer in 2003 becoming the political leader of PVDA in 2012. The victorous contender Lodewijk Asscher and thus front runner in 2017 is the current deputy-prime minister and Minister of Social Affairs and Employment. Asscher was born in 1974 in Amsterdam and studie law at the University of Amsterdam earning a doctorate in law in 2002. His political career is local, entering the city council of Amsterdam in 2002. After the 2006 city council elections he served as alderman of Economics, Airport and Harbour, and deputy mayor of Amsterdam until 2010. From 2010 until 2012 he was an alderman of Finance in Amsterdam. From november 2012 until today he’s in the cabinet as a minister and is the PVDA frontrunner in the coming elections. Of the smaller parties the Partij van de Dieren (Party for the Animals) is the Dutch party which garnered world wide attention for the sole reason being the only party ever founded particularly for animal welfare. Its frontrunner and current political leader is Marianne Thieme, born in Ede in 1972. She studied law at Erasmus University in Rotterdam and attended Sorbonne. During her studies she also became a vegetarian. In 2002 she founded the above party which obtained two seats in the Tweede Kamer during the 2016 elections and earlier in 2014 they won a seat in European Parliament. Before entering parliament Mrs. Thieme worked for animal welfare organizations. In 2015 two PVDA members of the parliament – Tunahan Kuzu and Selçuk Öztürk – left their group in opposition to Minister Asscher’s position in the integration debate. They founded DENK (=THINK) party which has clear viewpoints on migration and integration basically in opposition to the PVV. Tunuhan Kuzu, a Dutchman of Turkish background is a member of the Tweede Kamer since 2012 and studied public administration at Erasmus University. Before he entered parliament he was a healthcare advisor at PriceWaterhouseCooper and a member of Rotterdam city council between 2008 and 2012. He is the parties frontrunner in the comming elections. To end the Profiles in Leadership it is interesting to look at the results of the so-called Ukraine Referendum held in april 2016. Important promoters of the “no” to the association agreement with Ukraine, which won at the end – Mr. Jan Roos, and Mr. Thierry Baudet – are starting their own political party. Also the leading “no” organization GeenPeil, has changed into a political party of which journalist Jan Dijkgraaf will be frontrunner. Journalist Jan Roos will be frontrunner of the VoorNederland (For The Netherlands, VNL) party which was founded in 2014 by two members of parliament who left the PVV group. Thierry Baudet, who is a doctor of law from Leiden University and a known author on politics is the founder of thinktank Forum voor Democratie (Forum for Democracy) also in 2014. Mr. Baudet is the frontrunner and will compete in the upcoming elections. All three parties are considered leaning to the right.

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About the author: Mr. Anton Lutter is a  former City Councillor of The Hague.    Reference:

Profiles in Leadership Part I

     

By Nicola Bilotta. The Brazilian ‘locomotive’ has stopped. Oil production has been one of crucial drives in fostering not only economic but social growth in Brazil, but now sees the country gripped by economic crisis and political instability. The inquiry of Petrobras’s scandal is changing the equilibrium of powers in Latin “China”.   The process of growth and modernization in Brazil has been always described as an example to be followed by other developing countries. Nevertheless, the Brazilian ‘locomotive’ has stopped. The country is going through a period of dramatic political and economic instability. Although the Olympics Games should have been an international show of Brazilian power, they revealed the structural weakness of a country full of ambiguities and contradictions instead. Petrobras’ inquiry, combined with negative effects of the economic crisis, seem to have temporarily buried the China of South America. Oil wealth becoming yet another time not a blessing but a curse. “In a broader sense, the hydrocarbons and its scarcity phychologization, its monetization (and related weaponization) is serving rather a coercive and restrictive status quo than a developmental incentive” – diagnoses prof. Anis H. Bajrektarevic, and concludes: “That essentially calls not for an engagement but compliance.“ To describe the history of the nation we need to focus our attention on oil, because the black gold is the embodiment of the success -and fall- of the Brazilian economy. Oil – how black is gold One the central drivers of Brazilian economic growth has been the production and the export of natural resources and their products. Looking at Brazil’s GDP between 1982 and 2015, three main trends can be observed. (i) A stable growth pattern from 1982 to 2002. (ii) The GDP rocketing up between 2003 and 2012, with a light slowdown during 2009-2010 caused by the financial crisis. (iii) A fall of GDP’s values between 2012 and 2015. Analyzing the evolution of the percentage of annual GDP growth’s, it is not possible to identify a specific trend. The most significant point that can be made is the constant growth of the GDP between 2004 and 2008, which was around 5% per year. The economic growth does not just imply a dramatic increase of GDP but also the improvement in social-economic status of millions of poor brasilians. Starting from 2001 the level of absolute poverty – defined as the percentage living with less than two dollars per day – decreased 12%. The levels of relative poverty – defined as the percentange of people with less than 50% of the average income – fell by 25% between 2002 and 2013. The value of export and of the satellite activities of natural resources for Brazilian is represented by their proportion on the total GDP. As clearly shown in Graph 4, one of the engines of the Brazilian boom in the 2000s has been oil. Its incidence on GDP increased remarkably from 1999, a stable growth that reached its peak during 2000s. Between 2003 and 2006 oil rents produced around 3% of total GDP. Graph 5 shows the cost of oil per barrel from 1980 to 2015. To clarify, the most important oil reserve in Brazil is Pré-Sal, which needs to compete in a market in which the price is of at least 70 dollars per barrel in order to be profitable. The fall of the international price of oil, then, has been penalizing the Brazilian economy that was already damaged by the crisis of Chinese demand and the slowdown of FDI. Eike Batista, imagine of Brazilian fable The story of Erike Batista is bond with the growth and the fall of Brazilian economy. Batista has been one of the richest man in the world, 8^th in the Forbes rank of worldwide billionaires and owner of 30 billion dollars in 2012. However, this changed in 2014 when he admitted to the loss of his wealth and his debt of one billion dollars. How is it possible that this self-made billionaire lost his wealth totalling a whopping 30 billion dollars? The success and the fall of Batista’s business is connected to oil. In the 80s, after completing his metallurgic studies, he went to Amazon forest to implement machines in the research and the extraction of gold. In the 1983 he bought a small society in the Canadian stock exchange, of extraction and trade of natural resources., that gained the value of 1.7 billion dollars in a few years. In 2002 he sold his company for 875 million. The devaluation of the asset was due to wrong investment done by the society in Greece, Russia and Czech Republic, which cost million of loss. Batista exploited new opportunities that arose during the Brazilian economic boom. Between 2001 and 2002 he created and subsequently sold two companies to the Brazilian state; a thermodynamics and an iron production company. The holding that would make a Batista billionaire was OGX (Petròleo e Gàs Participacoes), specialized in the research and refinement of oil and gas. The market strategy of OGX was aggressive from the beginning. In 2007 he arranged the rights of exploration for 21 areas for OGX doubling the amount offered by its competitors. The next year OGX was able to produce barrels at the cost of 145 dollars per barrel and it announced their structures would be able to produce 1 million barrel per day in 2019. Batista’s ambitions and his confidence in Brazilian economy encouraged him to invest a large amount of money to build up an harbour at Acu, 400 km away from Rio de Janeiro. The project was supposed to create a centre for the refinement and the trade of oil products, thereby radically increasing OGX’ productivity. From 2008 onwards, the Brazilian magistrate started to investigate bribes that Batista allegedly gave to the Governator of Amapà, Waldex Gòez, concessions of privileges for his companies. Even though the media caught wind of the investigation, the judiciary case was closed without any charges. The slowdown of Brazilian economy and the fall of the oil barrel started to strain foreign investors and foreign shareholders and lead them to reduce investments into Batista’s companies. The final blow was caused by the Abu Dhabi fund, Mudabala Development, which retired from EBX – one of Batista’s holdings – and asked for the liquidation of all their stock options which totalled 1.5 billion dollars. The financial pressure then cut the liquidity of Batista’s companies, which, having invested a lot of money, survived using financial leverage. Like a balloon, EBX snapped under the weight of financial debts that made Batista lose all of his assets. Petrobas investigation In March 2014, a group of Brazilian judges started to investigate the relationship between the Worker’s Party and the public oil company Petrobras. The charge was that executive directors of Petrobras and of the main building societies (Btp) developed a corrupt system in which Btp would receive contracts for the construction of oil platforms increasing the building costs between 1% and 3%. In exchange, governmental parties would obtain illegal funds to sponsor political campaigns. The companies involved were Camargo Corrêa, Oas, Utc-Constram, Odebrecht, Mendes Júnior, Engevix, Queiroz Galvão, Iesa Óleo & Gás e Galvão Engenharia and members of the Workers’ Party, the Brazilian Democratic Movement Party (Pmdb) and the Progressive Party. (Pp). The main consequence of the inquiry was the delegitimization of the Workers’ Party that led Brazil from 2002 onwards. The President, Dilma Rouseleff was forced to leave office despite the fact she was not personally involved in the investigation. The successor of former President Lula endured immediate pressure to resign for her knowledge of systematic corruption as Chairman of Petrobras and Minister of Energy (2003-2005). Nevertheless, the impeachment of Rouseleff regarded the charge of having transferred public funds from national banks to finance social expenses that went beyond the fixed amount allocated for public expenses. However, the charges that led to her dismissal did not include the Petrobas scandal. Eduardo Cunha was the political leader leading the group that called for Dilma’s dismissal. Paradoxically, he was not only found with a secret million dollar bank account in Switzerland, but was also barred from assuming any public position for eight years due to an investigation for his involvement in corruption and bribes. Some representatives of worldwide left-wing parties talk about a conspiracy to dismiss the Workers’ Party. The Brazilian and international elite allegedly exploited the economic crisis to destroy the consensus of Lula and Rouseleff’s party, which had always had significant popular support. Lula won the election in 2002 with 46.4% of the votes against just 23.3% of his opposing candidate José Serra. In 2006, Lula was confirmed President with 48.6% in the next election. His successor, Dilma Rouseleff, won in 2010 with 46.9% of the votes. Even though she experienced a small decline, Rouseleff won the election in 2014 with 41.6% of the votes. These Brazilian governments made enemies in the international market due to their politics of nationalization and semi-nationalization of natural resources. For example, Petrobras, founded in 1953, was partially privatized during the 90s. However, Lula started a propagandist campaign in 2007 to return company under state control. In addition, to prevent the private exploitation of the Pré-Sal oil reserve, Lula’s government passed a law to give to Petrobras the monopoly to explore the area and extract oil from Pré-Sal. Some influential voices, such as independent Brazilian experts and academics raised concerns about the nature of the process. Pedro Fassoni Arruda argues that there were secret powers behind the impeachment that were also involved in the coup d’etat in 1964. In a similar vein, Pablo Ortellado criticised the framing of Rouseleff in the media. Sapelli contends that the modern political history of Brazil is characterized by a deep fragmentation of parties, which means every President has to deal with many small personalist parties. The external support that every government needs to administrate generated the construction of a system of corruption intrinsic to Brazilian society. Many experts believe that judge’s actions could enforce the trust of markets and investors in Brazilian institutions. Cutting the ambiguous bonds that exist between parties and companies should help to make the legal framework more stable and safe, strengthening the power of the Law. This could be a message from Brazil to all the world, that whoever is corrupted, no matter what status, will be punished. Recently, the news reported the Brazilian parliament approved a law with 292 in 393 to abolish the monopoly of Petrobras on the reserve of Pré-Sal. This law seems to be just the first step of a greater project of privatization pursued by President Michel Temer. With strong politics of liberalization for Brazilian natural resources, Brazil seems to offer intriguing opportunities for business and investments for many multinationals. If Petrobras’ inquiry is just conspiracy or smart intuition is hard to understand. Surely, the destiny of Brazil will be, another time, defined by black gold. For better or worse. About the author: Nicola Bilotta has a BA and a MA in History from Università degli Studi di Milano and a MSc in Economic History from the London School of Economics. He works as a Global Finance Research Assistant at The Banker (Financial Times) and collaborates as an external researcher at ISAG (Istituto di Alti Studi di Geopolitica e Scienze Ausiliari) N_bilotta@lse.ac.uk   Bibliography:

1. Blankfeld, Big Man in Brazil, Forbes 3/11/2010

ECB, What is driving Brazil’s economic downturn, Issue 1/2016-Box 1

1. Leahy, Brazil’s left fears Rousseff coup, Financial Times 3/04/2016

D. Miranda, Brazilian politician who led Rousseff impeachment arrested on corruption charges, 21/04/2016 OECD, Economic Surveys Brazil, 11/2015 S. Romero e V. Sreeharsha, Dilma Rousseff Targeted in Brazil by Lawmakers Facing Scandals of Their Own, New York Times 14/04/2016 M, Sandy, Brazilian politician who led Rousseff impeachment arrested on corruption charges, The Guardian 19/10/2016

1. Sapelli, Dal Brasile all’Italia. I poteri forti dietro le inchieste pilotate sul petrolio, Il Sussidiario 7/04/2016
2. P. Spinetto, P. Millard and K. Wells, How Brazil’s Richest Man Lost $ 34.5 billion, 4/10/2013 Bloomerang 4/10/2013

World Bank, Dataset Brazil, http://data.worldbank.org/country/brazil