The Nation Newspaper

Category: Editorial

  • Disturbing signal

    Disturbing signal

    EVEN if President Goodluck Jonathan had presented the 2014 budget estimates to the National Assembly last Tuesday as scheduled, the exercise would still have come too late for comfort. The postponement of the budget presentation till tomorrow is a disturbing signal that the factors that impeded the smooth consideration, passage and implementation of national budgets in the past are actively at work again to thwart the objectives of the 2014 budget.

    Citing ‘emergent circumstances’, the President sought and obtained the consent of the legislators to shift the unveiling of the budget till this week. The failure to do so last week naturally fuelled apprehension that the crucial budgetary process was once more swimming in stormy waters as had happened all too often in the past.

    Despite the presentation of the 2013 budget estimates to the National Assembly on October 10, last year, it was not until February 27 this year that it was assented to by the President. If the 2014″ budget estimates will just be presented to the National Assembly tomorrow, it can best be imagined when the proposals will formally be passed into law for implementation, given the characteristic bickering between the executive and legislature on fiscal matters.

    From all indications, both houses of the National Assembly and the presidency are yet to find a way of working in a more coordinated and harmonious manner to ensure timely and effective implementation of the budget in the national interest. While both arms of government must adhere to the principle of separation of powers to promote good governance through appropriate checks and balances, this must not result in an unyielding rigidity that hampers systemic efficiency. Given the unsavoury experiences of the past, for example, it is surprising that as at last week, both the legislature and executive were yet to arrive at an acceptable oil price benchmark for the budget.

    This perennially contentious issue ought to have been handled more expeditiously and a consensus arrived at much earlier. As it were, there is no indication that even after the budget presentation by the President, there won’t be disagreement on the requisite oil price benchmark, which may complicate the process of deliberating on and approving the budget, with negative implications for the economy. Similarly, since the Fiscal Responsibility Act requires that the National Assembly must approve both the Medium Term Expenditure Framework and Fiscal Strategy Paper before any budget presentation, both arms of government should have cooperated towards achieving this objective speedily. It is inexcusable that the delay on the part of the legislature in this regard was one reason why the budget could not be presented earlier.

    Some of the legislators are reportedly reluctant to consider the 2014 budget estimates because of what they perceive as poor implementation of the 2013 budget. While this school of thought contends that budgetary performance for the year was not more than 40 per cent, the Federal Ministry of Finance insists that a performance of at least 70 per cent was recorded. While the ministry’s figure may be true in respect of recurrent expenditure, the 2013 budget, like virtually all others since 1999, has clearly performed far below par in terms of capital expenditure.

    Yet, it is the latter that can revitalise public infrastructure as the basis for job and wealth creation, to ensure that the country’s much trumpeted high growth rate is accompanied by meaningful development.

    If we are to redeem lost time and begin to make concrete economic progress, then all concerned must approach the 2014 budget with utmost seriousness. Once the budget is presented, it must be considered with despa tch without compromising thoroughness. Furthermore, the National Assembly must steadfastly and transparently undertake its oversight functions to ensure diligent implementation of the budget. And the government must, more seriously tackle the menace of corruption that has been a key factor in the poor implementation of past budgets and the continued impoverishment of millions of Nigerians.

  • Little has changed

    Little has changed

    IT is distressing that, despite the stark reality of oil-business related environmental degradation in the Niger Delta and the long campaign for correction, there is little or no progress. The ghost of Ken Saro-Wiwa, the writer and renowned environmental rights activist who championed a loud protest against the despoliation before his execution under the military administration of the late General Sani Abacha, must be agitated. This was implied by Senator Bukola Saraki, chairman of the Senate Committee on Environment and Ecology, who lamented that, 18 years after Saro- Wiwa’s death, “the struggle and message for which he was killed still resonates with us.”

    Interestingly, Saraki observed that “there is a regulatory and legal failure lending itself to the environmental impunity we see in the Niger Delta.”  This thought is confounding, particularly given the existence of the Federal Ministry of Niger Delta Affairs announced in 2008 by the late President Umaru Yar’Adua,  “to coordinate efforts to tackle the challenges of infrastructural development, environment protection and youth empowerment in the Niger Delta.”  Additionally, the Niger Delta Development Commission (NDDC) became a parastatal agency under the ministry.

    Sadly, with the evident lack of improvement in the region, it would appear that these structures are merely glorified; and there might be an urgent need for a new template for development. Specifically, reports indicate that the ministry has performed rather disappointingly, in spite of huge budgets: road projects, skill acquisition programmes, and water and electricity schemes are allegedly far behind schedule; waterfront development, including dredging and port development, was reportedly unimpressively insignificant. Also, certainly more disturbing is report of an immense disparity between federal budgetary figures and amounts released, which suggests a hampering unseriousness on the part of the central government. It is ironic that such callous treatment is the reward for a region responsible for the main portion of the country’s revenue.

    However, the role of governments in the oil-producing states deserves to be questioned as well, especially in the light of the statutory 13 percent derivation-based extra revenue allocation which they enjoy. Against the backdrop of their complaints about its inadequacy and clamour for more, it is logical to inquire how well such funds have been utilised to ameliorate socio-economic conditions in the states. It is no secret that official corruption continues to be a monstrous impediment to good governance not only in the oil-rich region, but across the country.

    It is on record that abysmal governmental neglect triggered the upsurge in militant activities by protesters, which eventually led to the Federal Government’s 2009 controversial amnesty programme that has essentially failed to arrest the people’s outrage. Regrettably, there are, today, strong signals that the era of militancy is not quite over.

    However, it is worth emphasising that the problematic issue of gross underdevelopment in the Niger Delta needs to be addressed alongside the atrocious degradation caused especially by oil spills and gas flaring, which have been rightly described as “irresponsible environmental behaviour.” It is instructive that in a recent report, Amnesty International blamed oil pollution in the Niger Delta on corrosion and other faults in aging pipelines of the oil companies in the area. It is inexcusable that gas flaring continues, and the official terminal date keeps shifting, demonstrating a condemnable lack of will by the authorities. Also, it is necessary to expedite action on the amendment of the National Oil Spill Detection and Response Act (NOSDRA) 2006, with a view to not only stipulating specific penalties and responsibilities for oil spills, but also enforcing the provisions of the law in cases of breaches.

    There is no doubt that the campaign for environmental revolution in the region needs to be sustained and reinforced; and the governors of the oil-producing states as well as the Federal Government monitored for greater accountability.

  • British press freedom under threat

    British press freedom under threat

    Britain has a long tradition of a free, inquisitive press. That freedom, so essential to democratic accountability, is being challenged by the Conservative-Liberal Democrat coalition government of Prime Minister David Cameron.

    Unlike the United States, Britain has no constitutional guarantee of press freedom. Parliamentary committees and the police are now exploiting that lack of protection to harass, intimidate and possibly prosecute The Guardian newspaper for its publication of information based on National Security Agency documents that were leaked by Edward Snowden. The New York Times has published similar material, believing that the public has a clear interest in learning about and debating the N.S.A.’s out-of-control spying on private communications. That interest is shared by the British public as well.

    In the United States, some members of Congress have begun pushing for stronger privacy protections against unwarranted snooping. British parliamentarians have largely ducked their duty to ask tough questions of British intelligence agencies, which closely collaborate with the N.S.A., and have gone after The Guardian instead.

    Alan Rusbridger, the newspaper’s editor, has been summoned to appear before a parliamentary committee next month to testify about The Guardian’s internal editorial decision-making regarding the Snowden information. Members of Parliament have also demanded information on the newspaper’s decision to make some of the leaked information available to other journalists, including those at The Times. That should be none of Parliament’s business. Meanwhile, Scotland Yard detectives are pursuing a criminal investigation into The Guardian’s actions surrounding the Snowden leaks.

    These alarming developments threaten the ability of British journalists to do their jobs effectively. Britain’s press has long lacked the freedoms enjoyed by American newspapers. Now it appears they are less free from government interference than journalists in Germany, where Der Spiegel has published material from the Snowden leaks without incurring government bullying.

    The global debate now taking place about intelligence agencies collecting information on the phone calls, emails and Internet use of private citizens owes much to The Guardian’s intrepid journalism. In a free society, the price for printing uncomfortable truths should not be parliamentary and criminal inquisition.

     

    – New York Times

  • Lessons from Ghana

    Lessons from Ghana

    Minister sacked for dreaming of making $1m off govt must have wished she served in Nigeria

    The sacked Ghanaian deputy Minister of Communications, Victoria Hammah, must be wishing that she was a minister in Nigeria, working for President Goodluck Jonathan. If she had been, she would still be sitting comfortably on her desk. In our country, it is highly inconceivable that a minister in the present government could be sacked, for a mere taped conversation, that, she would not leave politics until she has made a million dollars. As if mocking the Stella Oduah’s corruption scandal, the sacked deputy minister, like Ms Oduah, also worked to elect John Mahama as president, and as such was considered a confidant of the president.

    Yet, in the interest of Ghana, and to send a clear message that his presidency would not condone corrupt tendencies, President Mahama, despite affiliations, sacked the deputy minister, for her mere inclination to corruption. Conversely in Nigeria, President Jonathan, despite overwhelming indictment of his Minister of Aviation, Ms Oduah, over the purchase of unbudgeted two bullet-proof cars for a staggering N255 million, still considers the minister indispensible to his government, and has retained her services, in spite of a national outcry for her removal. Instructively, therefore, while in Ghana a minister is sacked for contemplating corruption, in Nigeria, another is retained despite a clear indictment over corruption practices.

    This is a clear message that while Ghana takes the fight against corruption seriously, in Nigeria, under President Jonathan, corruption is allowed to fester. And the circumstances of the sacked minister and Oduah are so intriguingly similar. Like Hammah of Ghana, Oduah worked hard to elect her country’s president. Indeed, it is common knowledge that Oduah’s campaign machinery, known as ‘Neighbour to Neighbour’ was very helpful towards the election of President Jonathan in 2011; and she consequently became one of the closest persons to the president. For that reason, many had even before the current scandal, considered her an untouchable. Thus, when the current scandal broke, many had predicted that she was likely going to get a mere slap on the wrist, current events seem to be confirming those fears.

    As we have noted on this page many times, the Jonathan presidency has shown serious accommodation to corruption, and this could spell great tragedy for our country. Early last year, following a nationwide protest over increase in the prices of petroleum products, Nigerians were regaled with unprecedented cases of fleecing of the nation’s treasury under the guise of petroleum subsidy claims. As the investigation by the National Assembly subsequently revealed, the subsidy claims were a mere criminal connivance between some government officials and private companies to apply and get paid humongous amounts as subsidy refunds, when in reality most of them never imported any product.

    As we write, nobody has been punished for stealing the billions of naira from our national treasury, in the name of the phantom oil subsidy. Again, as in the aviation sector, the Minister of Petroleum, Diezani Alison-Madueke, is considered another untouchable in the Jonathan presidency. To confirm that, the president has successfully ignored Nigerians, despite the demand that the supervising minister under whose watch the petroleum subsidy scam happened should be sacked. In fact, as events subsequently showed, most of those indicted for the subsidy scam are the children and associates of the major big-wigs in the ruling party, and the half-hearted criminal trials have been turned to a circus.

    Similar tales of corruption have been established in the pension management, which operates under the presidency. As between the National Assembly and a presidential task force on pension, led by one Alhaji Abdulrasheed Maina, what has been established is that billions of naira has been stolen, but there is dispute as to the guilty party. There again, there is no concrete effort, by relevant authorities, to recover our stolen wealth, under the nose of the presidency. As in other cases, the nation is again taken for a ride, as the chief culprit was at a time alleged to be shielded by the presidency with police protection, while the senate was issuing orders that the Inspector-General of police should arrest and bring him to the senate chambers. At the end of the hullaballoo, the task force chairman was neither apprehended nor the allegedly stolen money recovered.

    In our view, President Jonathan must learn necessary lessons from the way his Ghanaian counterpart handled the fate of the sacked deputy minister, Hammah. To do otherwise is to clearly make Ghana, the preferred destination for direct foreign investment in the region. Indeed, few Nigerians will still remember that President Jonathan anchored his presidency on transparency and transformation. For many, it is like his administration is more at home with institutionalising corruption than fighting it. To prove cynics wrong, President Jonathan should borrow a leaf from his colleague in Ghana.

  • Towards credible poll in Anambra

    Towards credible poll in Anambra

    Tomorrow, about 1.78 million voters in Anambra State are expected to elect its next governor. As usual, the Independent National Electoral Commission (INEC) has promised to deliver a credible poll that would satisfy all stakeholders.

    We hope it would deliver on its promise. All previous elections have left the voting public and observers guessing who the true winner was. At best, INEC would admit that there were some flaws, while contending that such could not have tilted the result towards those declared losers. No election in the country has met regional standards, let alone passed international test.

    But the stakes in Anambra State are quite high. All the major contenders are hopeful, believing they stand the chance of obtaining the mandate. The ruling All Progressives Grand Alliance (APGA) has a foothold only in the state. The Peoples Democratic Party (PDP) has always left no one in doubt that it desperately wants to take control of all the states in the Southeast. With the 2015 general election around the corner, the party would have realised that the groundwork for taking over Anambra State has to be laid in 2014. And, for the All Progressives Congress (APC), a merger of erstwhile separate political parties, the first major test of strength is provided in this Southeast state.

    Experience has shown that whenever the stakes are so high, violence erupts. The verbal contests and intemperate utterances that have trailed the campaigns will test the resolve and professionalism of the security forces. In most of the previous polls, the security forces had been seen as part of the problem as they were usually accused of descending into the ring. This must not be the case in Anambra State as such development could easily lead to a resort to self-help.

    It is good that INEC has declared its willingness to overcome previous challenges. Its Resident Electoral Commissioner in the state, Professor C. E. Onukogu, recently told civil society groups in the state that the commission had studied all previous elections, noted the mistakes and come up with adequate measures to arrest them. We hope this would transcend mere speech-making. This would not be the first time INEC officials would make such declarations only to flop on Election Day.

    In the Edo State election last year, the INEC chairman, Professor Attahiru Jega, and his men similarly boasted. The outcome of the bye-election conducted in Imo State after the 2011 elections is still a subject of dispute. The recent bye-election to fill the Delta Central senatorial seat attracted trenchant criticisms from the media, local and foreign observers, as well as the opposition politicians.

    In many areas, materials were reportedly unavailable until the close of poll. In others where the sensitive materials were available, poll officials refused to move until their allowances were paid. Yet, in other areas, transport scuttled plans to start early. These did not stop fantastic results from being declared.

    In Anambra State, there have been allegations that the commission could be consciously working with one party or another. There have been charges that scientific rigging could be the order of the day by starving strongholds of some parties while encouraging full voting in others. This is an opportunity for INEC to prove cynics wrong. It is not enough to send 21 electoral commissioners to the state. Neither is the promise that Professor Jega would be personally on ground sufficient. Conscious efforts should be made to disabuse the minds of Nigerians and friends of the country that INEC has any agenda other than the delivery of a free, fair and credible poll.

  • Festus Iyayi (1947-2013)

    Festus Iyayi (1947-2013)

    He lived for his beliefs. He died for his beliefs. That is the glorious obituary of Festus Iyayi, professor of Business Administration at the University of Benin (Uniben), famed novelist, civil rights activist, former Academic Staff Union of Nigerian Universities (ASUU) president and consuming patriot, who died in a road crash on November 12.

    His death was totally avoidable, but for the lawless jungle that is the Nigerian road, particularly when the high and the mighty are in transit. The three-vehicle convoy, in which the late Iyayi with 14 other ASUU colleagues were travelling to Kano for an ASUU National Executive Committee (NEC) meeting, was on its right lane. But then, a car from Kogi State Governor Idris Wada’s convoy, reportedly shot out of its own lane and rammed into the vehicle conveying Iyayi. The impact made the vehicle to somersault several times. Iyayi reportedly died on the spot.

    Iyayi could also perhaps have been alive today if the Goodluck Jonathan presidency had been less tardy in its handling of the ASUU industrial dispute, for which universities nationwide had been shut these past four months. It was en route to resolving the matter that Iyayi met his death. If the government had kept faith with its agreement with ASUU, there would have been no strike. If there was no strike, Iyayi would not have died on the way to resolving the present one.

    If Iyayi’s death is a point of departure, and the Nigerian government would henceforth keep to its agreements, and there are no future ASUU strikes, perhaps Iyayi would have died for a worthy cause. But would there be such a future educational el Dorado?

    Whatever the future holds, in a Nigeria of moral free fall and scandalous flip-flop, Prof. Iyayi distinguished himself as one of the few men of conviction and character. Added to the normal brilliance which ought to be natural to an academic, he was solid gold to his generation.

    As a young academic, and famed novelist even if his discipline was Business Administration, he stood almost alone against the awesome machine of military President Ibrahim Babangida, on account of ASUU activism and his relentless quest for a saner Nigerian academia. He was bruised no doubt, and even endured a purported sack by Uniben, under Prof. Grace Alele-Williams, Nigeria’s first female vice-chancellor. He however stood his ground and eventually triumphed with a judicial recall to his university job.

    As ASUU president (1986-88), he maintained his chequered history of academic activism, based on solid personal conviction and rare ideological clarity: conditions on Nigerian university campuses must be radically improved. For that he ran into trouble with the military overlords, which was to be expected, given the generally reactionary bent of such juntas.

    But Iyayi’s major challenge – and triumph – was not against the military. It was rather against his own peers, professors in the system, who considered their careers made and would not be bothered by the ‘misguided radicalism’ of Iyayi and his ilk. Well, Iyayi lived enough to see the professorial rank now radicalised enough to seek election as ASUU activists.

    Iyayi’s vision was therefore clear: fix first the rot in the university system, and everybody, from the lowest to the highest academic, would benefit. That message is sinking in. And to those universities that take glory in demonising ASUU’s striving; yet are not averse to enjoying its sweet result, Iyayi as martyr of a sound Nigerian university system, can only mock their being clever by half.

    Iyayi believed in this noble cause, so much so he died on active service. His heroic death should motivate every right-thinking Nigerian; and push the infamously tardy Nigerian governments to be more alive to their duty.

    Adieu, consuming patriot!

  • Agony in the Philippines

    Agony in the Philippines

    Five days after one of the worst typhoons on record hit the Philippines, the magnitude of the catastrophe is barely captured in the preliminary statistics: nearly 2,000 people listed as dead and many thousands more missing; more than 600,000 people displaced; countless homes and roads crushed by surging water.

    News photographs of the dead lying in city streets are heartbreaking. Relief efforts are facing serious obstacles as huge numbers of survivors grow desperate for food, water, medical care and shelter. The situation is so bad that Filipino troops have been deployed to Tacloban, the devastated coastal capital of Leyte Province, to guard against unrest.

    The United Nations has called for more than $300 million in aid, and many reliable past donors — the United States ($20 million), Japan ($10 million), Australia ($9.3 million), Britain ($16 million) — are again proving generous. One exception is China, the world’s second-largest economy after the United States. China is at odds with the Philippines over claims to the South China Sea and has offered a paltry $200,000. But delivering relief supplies to victims has been severely hampered by impassable roads, a collapsed infrastructure and, reportedly, a shortage of aircraft capable of landing on a short runway.

    President Obama offered on Tuesday to provide American help as quickly as possible. The United States has already dispatched an aircraft carrier with 5,000 sailors along with more than 80 aircraft and four other ships, which are expected to arrive in two or three days. Britain has also sent warships. But even heavy-duty help does not guarantee a successful response, and Philippine officials came under criticism on Tuesday for moving too slowly.

    The ferocious winds and tsunami-like ocean surge that flattened the central region of the Philippines will not be the last. The 7,000-island archipelago is in the middle of the world’s most storm-prone area. And while it is difficult to link any single weather event to climate change, there is little doubt that rising sea levels caused by global warming will worsen the dangers. And experts say expanding urban populations, poor construction and poverty exacerbate the vulnerability of low-lying coastal cities everywhere.

    Once the crisis is past, Philippine officials, working with the international organizations, must re-examine early warning systems and evacuation procedures. In the near term, faster evacuation may be the only way to save more lives in this kind of calamity.

     

    – New York Times

     

  • Embarrassment of riches

    Embarrassment of riches

    The Central Bank of Nigeria (CBN) yearly report for 2012, released penultimate weekend is sanguine and disturbing at the same time. It is sanguine because, the Federal Government earned a massive N8trillion from oil and another N2.63trillion naira from non-oil exports, totalling N10.65 trillion earnings for the 2012 fiscal year. That sum exceeded the N9.6trillion budget benchmark for that year. The impressive earning was attributed to buoyed oil and non-oil receipts for the fiscal year; and after deductions, the federation account was richer by N6.5 trillion naira. Unfortunately, that is where the good news ended.

    The news turns bad upon a fruitless search for the impact of such a humongous earning on the general welfare of Nigerians and the physical infrastructure of our country. The news makes one sad, when virtually in all sectors of the economy the story is one of gloom. And the reason for the abysmal failure is because substantial part of that money is stolen, such that despite a yearly huge budget, there are insignificant changes in the country.

    Notoriously also, the federal legislature and the executive are always at loggerheads over the non-implementation of the federal annual budget. Also, the state governments have been quarrelling with the Federal Government over the non-release of their financial entitlement from the federation account, as at when due.

    In the year under review, as in the previous years, the tale has been one of less than 40 percent implementation of the annual budget, by the Federal Government. Indeed, the Chairman of the Senate Committee on Appropriation, Senator Ahmed Maccido, admitted in an interview, that the Federal Government was only able to implement 40 percent of the 2012 capital budget. Yet, in the current year, there is no record of the money saved. So what could be wrong with our country’s economy that while it earns enough to meet its yearly budgetary plans, it spends far less, and yet can account for so little?

    The result of the unaccountable state of our finances is also at the root of the incessant disagreements between the Federal Government and the states. This year alone, on more than three occasions, the accountants of the state governments have had to walk out of the Federation Accounts Allocation Committee meetings in protest, because the federal authorities were unable to give them a satisfactory account of the income due to the federation account. Similar embarrassing scenarios also played out in the year under review; and each time, the matter is resolved more out of courtesy for the Federal Government, than based on satisfying the imponderables in the query over the federation finances by the states.

    But for the purposes of accountability, it would have been far more soothing for Nigerians not to be also psychologically abused by the unsavoury tales of federation finances. Of course with a very humiliating physical impact of a mismanaged economy on the majority of Nigerians who live on less than 1USD a day, the tales of humongous earnings with minimal impact on their daily lives is like adding salt to injury. This humiliation is also attenuated by the elected and selected officials living like medieval kings and princes, while telling the rest of Nigerians fairy tales that the country is either cash-strapped or broke.

    For whatever it is worth, there is need for a better management of our economy. Where there are glaring disparities between income and expenditure, the people in charge of punishing for economic crimes stand indicted for failing to punish for the lapses. So, let our criminal justice system stand to be counted, to help Nigerians account for its huge earnings, with little impact.

  • Adhere to principles, please

    Adhere to principles, please

    ONE month after the suspension of the Air Operators Certificate of Dana Airlines on October 6, the aviation authorities have failed to do the needful towards ascertaining the state of its fleet. When the suspension was announced on account of an impending safety audit just after the crash of an Associated Airline’s plane in Lagos, the measure received the support of the general public that saw it as an attempt by the Nigerian Civil Aviation Authority (NCAA) to sanitise the sector.

    However, more than a month after the suspension and the attendant cost to the airline, its workers and passengers, the NCAA is lazily explaining that the external auditors are still being awaited. This is a perfect example of how not to regulate a sector. The agencies in the aviation sector should be concerned that a once bubbling segment of the economy is now a shadow of itself. At the beginning of this year, there were 56 aircraft in the combined fleet of the airlines operating in the country. Now, only 38 are flying regularly and irregularly, and 24 belong to Arik. The rules caught up with IRS and Chanchangi when their fleet depleted to only one each.

    Nigerians remember today with nostalgia, those days when Okada, Kabo, Oriental and Al Barka Airlines competed for passengers. They still remember that the country once had a national carrier that, owing to the monopoly it enjoyed, crumbled as the government and regulators failed to create, promote and encourage fair competition.

    Thus far, government policies have failed to work as rules have been applied more in the breach. An intervention fund ostensibly introduced to inject capital at concessionary rates merely created room for sharp practices as the financial institutions, unscrupulous airline owners, regulatory authorities and government officials colluded to fleece the country. The money was expended, but the sector was left in a worse shape.

    In calling for immediate audit of Dana and other airlines, we are not unmindful of the embarrassing crashes that have been recorded in recent years. We support the quest to make the airspace safer for passengers. We accept the need for the agencies to respond to the challenge, but, in all things, fair practice should be the name of the game. Till date, the report of investigations into the June 2012 Dana Air crash has not been made public. The crash has not been blamed on the state of the aircraft. There is therefore no justification for punitive measure against the company.

    In this era when government is quick to allude to a drive for foreign investment and the chief executives at the federal and state levels are wont to regularly travel large in an ostensible bid to woo investors, the least any conscientious public official or agency could do is adhere to international best practice.

    Dana Air has cried out against this unwarranted measure. It took an open letter from the airline for NCAA to give its lame excuse. It has further pledged to commence the audit this week, but would it keep this promise; what happens to the loss already sustained? If at the end of the day the airline is given a clean bill of health, how would it and its workers be compensated? What possible explanation could be offered for the lifting of the earlier suspension in September last year? Is the NCAA suggesting that no audit of the fleet was undertaken before the aircraft were released to fly again?

    Dana Air should be spared further agony of waiting for auditors. The audit must be expeditiously undertaken and its status made public in the interest of all.

  • The new model sharing economy

    The new model sharing economy

    The foundation of modern economics is Adam Smith’s observation that an individual who aims only for his gain may still be led “by an invisible hand” to make choices that bring economic benefits to others. Last week, the Financial Times reported that a complementary view is emerging in the form of a “sharing economy”. Most productivity growth may still be powered by self-interest. But modern information technology is helping the invisible hand become a whole lot more collaborative.

    There has been too much breathless talk of how IT would revolutionise the economy, so it is useful to distinguish changes that are truly transformational from those that merely make it easier to do what one was already doing. Three broad trends assert themselves.

    First, the internet makes it much cheaper for individuals to offer traditional goods and services to a larger market. Take short-term accommodation: there have always been homeowners wanting to rent out a spare room, and the hotel industry is of course of old vintage. IT does not bring fundamental innovation in this case. But – as websites such as Airbnb show – making it possible, for free, to connect with customers anywhere in the world cuts transaction costs and shrinks the advantage of scale that hotel chains hold over homey bed and breakfast operations.

    A lower cost structure is not itself a shift from the pursuit of one’s self-interest to a passion for sharing. It is nonetheless significant. When it becomes profitable to occupy rooms that would previously have stayed empty, it is a boost to the efficient use of society’s resources. The same can be said for how the internet has made more personal services affordable for those outside the ranks of the super-rich. Those with more cash than time can outsource small chores to those in the opposite situation. The vehicles are sites that match tasks – from picking up the laundry to settling the utility bills – to those with time to spare.

    Second, the information revolution facilitates genuine sharing in consumption. Barter – long seen as the height of inefficiency – is enjoying a revival through house swaps, where the internet can deepen the pool of swappers, making compatible pairings more likely. Many city residents are ditching car ownership in favour of web-facilitated car sharing. Car clubs that allow down to half-hour car rentals exist in cities around the globe. Car pooling websites allow for a virtual form of hitchhiking that does away with the inefficient waiting at the roadside. In France, buzzcar.com allows “peer-to-peer rental”: private car owners rent out their vehicles when they do not need them.

    Sharing can be a lifestyle as well as an economy. Demand is growing for consumption that offers a personal experience beyond the standardised good or service. It also reflects a change in attitude to exclusive ownership, traditionally the measure of material success.

    This underpins the third, most innovative and exciting trend: sharing in production. The open-source movement in software coding, Wikipedia, and some artists’ renunciation of standard copyright show how work that is carried out voluntarily and co-ordinated spontaneously can result in economically valuable products. It is the antithesis of Taylorism.

    None of these trends represents alternatives to capitalism; rather they are complements to standard practice and should be celebrated as such. Like traditional capitalism, they rely on trust and on supporting institutions for their success. These can be provided by the market itself – from the informal, such as user reviews, to the formal, such as Creative Commons licensing standards. At times state quality regulation is needed. In all cases the goal should be neither to force sharing nor to ban it, but to give those who want to share the confidence to do so.

     

    – Financial Times