South Africa has no cash to throw at its issues

A member of the military patrols while the country is deploying the army to quell riots surrounding the imprisonment of former President Jacob Zuma in Soweto, South Africa, on July 13, 2021. REUTERS / Siphiwe Sibeko

LONDON, July 15 (Reuters Breakingviews) – South Africa is running out of its usual social patch. The normal response of the ruling African National Congress to the rampaging mob is to smash a few heads and then apply government money to the wounds. The unprecedented scale of last week’s unrest and Pretoria’s growing mountain of debt preclude such an outcome.

Ironically, the law breaking and looting, which resulted in the death of at least 70 people, came from one of the most beautiful hours in the legal system. Jacob Zuma’s arrest for contempt by the Constitutional Court signaled that no one, not even a former president, was above the law. However, getting this through is tough on looters who are either too destitute or desperate to take care of it – unemployment hit a record 32.6% this year. Others believe that they are merely following the guidance of a habitually kleptocratic state.

The deployment of President Cyril Ramaphosa troops – the mind-boggling part of the ANC crisis playbook – was intended to restore some semblance of order. But the damage looks serious. Durban, the continent’s largest port, suffered severe disruptions, as did the huge Richards Bay coal export terminal and the national road and rail network. The largest oil refinery in the country had to close as well as numerous Covid-19 vaccination centers. All of this helps an economy that will grow only 3.3% this year, a relatively subdued recovery after falling 7.2% last year.

In 2016, the government defused student unrest by increasing university funding by 11%. A similar answer now looks more difficult. The pandemic and economic stagnation under Zuma mean debt is 80% of GDP, up from just 53% three years ago. The government hopes it will peak at 89% in 2026, but could miss it if the unrest drags on or investment subsides. Even before the pandemic, the International Monetary Fund assumed that borrowing was on an unsustainable path. On top of that, bond investors get nervous, especially when the Federal Reserve begins to tighten US monetary policy. Returns over 9% on debt due in 2030 are no exception – they’re on the up.

Higher interest rates also limit Ramaphosa’s scope for budgetary adjustments to ease public anger. The Treasury Department expects debt servicing costs to rise 45% over the next three years to consume 16% of government spending. In the same period, the health budget will be flattened and social spending will fall by a fifth. This week’s riots could be the first glimpse into a dark future.

consequences @edwardcropley on twitter


– Rioters ransacked shops and offices in South Africa on July 14, defying government demands for silence after a week of violence in which at least 70 people were killed.

– The worst unrest in years, initially sparked by the arrest of former President Jacob Zuma for disobeying the court, forced the closure of the country’s largest oil refinery and disrupted its Covid-19 vaccination program.

– President Cyril Ramaphosa sent the army to support the fighting police. He also warned of a possible food shortage.

The rand lost 4% from July 12 to July 14, hitting 14.79 against the dollar, its lowest level in more than three months. Public debt has also come under pressure, as the benchmark bond 2030 yield rose 15 basis points to 9.05% on July 14.

Arrangement by George Hay and Oliver Taslic

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Op-Ed: Biden shouldn’t throw extra taxpayer cash at broadband | Nationwide

President Joe Biden’s American employment plan, which includes a laundry list of infrastructure proposals valued at $ 2 trillion, seeks to allocate more tax dollars ($ 100 billion) to broadband despite a flawed government track record on high-speed Internet.

A White House statement on the plan said the goal is to bring “affordable, reliable, high-speed broadband” to “every American, including more than a third of rural Americans who currently lack broadband access.” The plan calls for $ 100 billion in tax dollars to be used towards this goal.

Taxpayer dollars are already being spent on broadband and it’s not going very well. A US Government Accountability Office report found that federal spending on digital divide programs totaled $ 47.3 billion between 2009 and 2017. This assignment pales in comparison to the $ 172 billion Private sector spending from 2011 to 2020.

The Associated Press noted that despite this government spending, the gap persists. Over the next decade, an additional $ 20 billion has been allocated for rural broadband, an additional $ 9 billion for 5G in rural areas, and billions more for the COVID-19 pandemic. None of these conspicuous sums include the $ 100 billion proposed by the Biden government. And thanks to efforts by the private sector, a staggering 1.3 million (340,000 rural) additional households have broadband availability as of 2019.

Daniel Lyons, a visiting scholar at the American Enterprise Institute, said the government’s plan to make sure every American has high-speed internet is a priority, but “the devil is in the details.”

The plan states that the administration intends to “future-proof” the broadband infrastructure that will be built with the allocated funds, but as Lyons notes, “predicting the future of the telecommunications network is a breeze.” Although small cellular operators have done the work of Yeoman in recent years to connect some of the hardest-to-reach rural areas, Biden’s plan would focus on fiber optic networks.

“The picking of winners and losers among the network models undermines the intermodal competition that drives all technology and increases the chances of finding the most efficient way to serve individual pockets of unserved customers,” Lyons wrote.

He also notes that the plan mentions underserved and underserved areas in the same breath, although these are two very different terms. Prioritizing unserved areas would steer infrastructure where it is needed most, while allocating funds for underserved areas can sometimes lead to overbuilding. This is especially true as there is no precise definition of what it means that an area is underserved.

Michael Powell, President and CEO of NCTA – The Internet & Television Association, released a statement on the plan that the government is “taking the risk of seriously wrong turn” to promote state networks and close the digital divide. The impetus for this rhetoric comes from the government’s insistence on treating broadband like a utility company.

“This shift is being fueled by the mistaken amalgamation of our successful modern digital networks with our decaying roads, bridges, waterways and power grids,” said Powell. “While we’ve seen repeated examples of traditional infrastructure outages over the past few years, America’s broadband has been a dependable workhorse as millions of Americans have worked, learned, and connected from home during the pandemic.”

Similar to the infrastructure failures mentioned by Powell, the Taxpayers Protection Alliance (TPA) has been reporting on the failures of state-owned networks for years. Examples are not missing and many are highlighted on TPAs Broadband boondoggles Website and GON With the wind Report published last year.

The private sector is more than capable of closing the digital divide if it is freed from the shackles of onerous regulation. Rather than throwing more tax dollars on broadband at a time when national debt is piling up at a record rate, the Biden government would be better able to cut red tape and get the private sector to work.

The private sector has and will close the digital divide more efficiently – all without taxpayers’ money.

Johnny Kampis is a Senior Fellow and investigative reporter for the Taxpayers Protection Alliance.

To Fight Central America’s Unhealthy Governance, Biden Can’t Simply Throw Cash on the Downside

President Joe Biden faces a dilemma: To curb the exodus of migrants from Central America, the must Systems of governance of these countries need a thorough overhaul, which will cost a lot of money. Just pouring money into countries with corrupt administrations, legislatures, judicial authorities and elites will mean little more than refilling a leaky bucket. In Guatemala, El Salvador, Honduras and Nicaragua, the past four years have seen earlier successes and the challenges of working against impunity and corruption are growing. Although countries have different dynamics and schedules, they were all setbacks.

Under the circumstances, the $ 4 billion Biden pledged to improve the lives of Central Americans must be carefully managed so as not to simply get dragged into the kleptocracy machine. It’s not just about prioritizing governance, it’s also about doing it intelligently. That requires a detailed approach. The Biden administration is already signal The aim is to pass the funds on to reliable partners and to demand transparency in accounting and progress in the fight against corruption. Members of Congress are asking for the same. A few concrete measures could immediately help restore a solid foundation.

A few years ago, hybrid international state mechanisms to strengthen the prosecution were celebrated for their obvious successes. The most ambitious and successful, the International Commission Against Impunity in Guatemala (CICIG), resulted in more than 400 criminal convictions, including heads of state, lawmakers, judges and executives, over a period of 11 years, and dismantled around 70 criminal networks (see previous Just Security coverage). Honduras MACCIH (Mission to Support Fight Against Corruption and Impunity in Honduras) has managed, over its much shorter lifespan, to set up a vetted anti-corruption prosecutor and investigate a number of high profile cases. The newest and weakest of these mechanisms is the International Commission against Corruption and Impunity (CICIES) in The saviourworks there with the public prosecutor’s office on fraud related to Covid, among other things.

But much of that progress has been reversed under the Trump administration, and Biden cannot turn back the clock. While innovative mechanisms such as CICIG created opportunities, created victories and stimulated changes in criminal proceedings, the constellation of factors that made these ad hoc mechanisms possible is very unlikely to repeat itself. All depend on legislative and judicial approval and the political will of the executive, and none of this is likely to come from governments controlled by the same old corrupt forces (or, in El Salvador, by new authoritarian forces with little appetite for the outside world) Control). . A regional mechanism will face the same headwinds, although support from other countries in the region could potentially make it more profitable.

Use US aid

However, there is a way to leverage the vital work of these mechanisms: states must implement the recommendations of the CICIG, MACCIH, and CICIES as a condition of receiving US funding. All three mechanisms that have been left behind (or are still being created in El Salvador) are preparing extensive reform proposals to improve anti-corruption and impunity work. In the case of Guatemala, CICIG proposed far-reaching reforms to the judicial selection process. She proposed other key reforms to improve access to justice, minimize malicious law enforcement and delay tactics, professionalize the judiciary, and separate the judiciary from administrative duties. These were never implemented. MACCIH has also left a roadmap for the reforms needed and CICIES has started recommending changes in several areas.

In all three cases, victims’ access to justice was a key to the reforms, however was hemmed in by courtsespecially in cases of corruption. Corrupt officials are trying to close the cases left by CICIG and MACCIH without further investigation. The US Congress and the Biden administration should insist on a roadmap, timeline, and milestones for the proposed reforms, as well as monitoring the remaining CICIG and MACCIH files to determine how and when funds will be disbursed.

Biden has said He will ask the US Department of Justice (DOJ) prosecutors to work with their local counterparts in the region. But simply teaching better technical skills is not what prosecutors need. In all three countries, crusade attorneys general have been replaced by those not interested in taking over powerful state and elite private interests (with the partial and likely temporary exception of Raúl Melara in El Salvador). It is the specific units within these offices, such as the FECI (anti-corruption) or the human rights criminal units in Guatemala and the UFERCO anti-corruption unit in Honduras, that need direct support – political, security and diplomatic even more than technical and financially. All funds for these units must be protected from leakage through other parts of the AG offices as the United States also works to move these offices to be more efficient and honest.

Rule of law judges are becoming an endangered species in the region. In every country these judges are attacked. Anti-impunity judges at Guatemala’s Constitutional Court have faced constant threats of impeachment and worse, and the current judicial selection process has already continued to exert undue influence. Guatemala has set up high-risk judicial processes for corruption, organized crime and human rights cases, partly with the help of CICIG, but left the judges against impunity in that court exposed to constant harassment, even threats, tried law enforcement and lockdown. In El Salvador there were attempts to remove the judge in the El Mozote massacre (what I discussed here) out of the case, and these types of maneuvers can be expected when the criminal proceedings are only inches forward. Biden could expressly support these judges and make non-interference in their cases an indispensable requirement for any support.

Dissolve coalitions of the corrupt

As others have suggested, the anti-transplant penalties are the Angel list and the Global Magnitsky Act should be used strategically to break apart and weaken coalitions of the corrupt. This would open up opportunities for legislative changes (including campaign funding reform) and for the emergence of new clean hands political forces.

In order to achieve this, the United States would have to redefine its overarching goal from the temporal pursuit of regional stability at any cost. During the Obama years, a narrow definition of stability did not serve the United States well. This led, for example, to the decision to support the 2009 coup in Honduras, which paved the way for the current corrupt and criminal regime. In 2015, amid massive popular protests in Guatemala and the resignation of the President and Vice-President over allegations of corruption, the United States insisted on maintaining the election calendar until electoral funding and administration could be cleaned up, despite widespread calls for a postponement. The result was Jimmy Morales, whose attempt to hide his illegal campaign funding and his family’s corruption led to the overthrow of CICIG. President Biden, who was close to these decisions, should learn from them. Sustainable stability requires a different US approach.

After all, greatly expanded resources without strict accountability will only backfire. It’s not just that money shouldn’t be given directly to corrupt leaders and ministries. Even private and civil society groups should be screened for authenticity, leadership and local reputation. Organized crime and other corrupt forces are known to form their own civil society groups to obtain and divert funds, and local elites have long been involved in corrupt schemes.

It is especially important that USAID funds, including public-private partnerships in areas where corruption has flourished (such as health, housing, energy and infrastructure), are carefully monitored and partners are vetted before any money is paid out. There are groups in the US and across the region who can provide information about the makeup of corruption networks, who is who, and whether recipients are known for their honesty.

Whistleblowers and local communities affected by projects (or a corrupt diversion of funds) must have easy access to financial and social accountability mechanisms within USAID and other US agencies. Such protective measures extend the project design and implementation. But in the long run it will give hard-won US dollars the best chance of actually reaching the people in the region in order to create the conditions they need for a life worth living that they do not want or have to leave.

BILD: A doctor wearing a mask with Honduran President Juan Orlando Hernandez takes part in an anti-corruption protest in Tegucigalpa on September 11, 2020 amid the new coronavirus pandemic. (Photo by ORLANDO SIERRA / AFP via Getty Images)