Make your Linguistic Skills even more Powerful

Make your Linguistic Skills even more Powerful

If you’re reading this, you have quite a powerful language. There are 1.5 billion global English speakers – the most spoken language in the world. Why not make your linguistic skills even more powerful by learning other strategic languages? It’s always useful to learn aspects of a language while traveling – phrases in German, French, Italian, Greek and Romanian for your trip across Europe, perhaps. But there are a handful of languages that would be wise to learn, especially as a frequent traveler. Here are the three most useful second languages as per

3 Most Useful Second Languages

Arabic

Make your Linguistic Skills even more Powerful
Credit: Juan Ci/Shutterstock

There are at least 315 million native and non-native speakers in the Arab world, making it the fifth most spoken language in the world. With it, traveling to the Middle East and parts of Africa and Asia is so much simpler (especially since the written language is so different from English lettering). Arabic is the official language of Jordan, Morocco, Saudi Arabia, and a few dozen other countries. It’s also the liturgical language of the Muslim population (around 1.5 billion people), making it highly important to religious scholars and those with an interest in the topic.

Spanish

Make your Linguistic Skills even more Powerful
Credit: Photographee.eu/Shutterstock

Every traveler likely knows a tiny bit of Spanish, but with so many Spanish-speaking countries, it’s a no-brainer to learn in an effort to make your trips easier and more rewarding. There are about 400 million nature speakers in countries around the globe: Argentina, Bolivia, Cuba, El Salvador, Guatemala and, of course, Spain, just to name a few. It’s universally recognized as useful, as it’s the third most studied language in the world behind English and French.

Mandarin Chinese

Make your Linguistic Skills even more Powerful
Credit: Toa55/Shutterstock

If you want to interact with 1.1 billion or so people, you’re going to have to do so in Mandarin Chinese, nearly a billion of which are native speakers. China is expected to become the world’s leading economy by 2050. If you’re in business, it’s a must-know language. It would at least be extremely useful as the country’s worldwide influence increases.

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Could OPEC play second fiddle to US’s oil boom?

Could OPEC play second fiddle to US’s oil boom?

With America’s oil boom, OPEC is stuck in retreat as demonstrated in this June 11, 2019, post of CNN’s. The MENA mainstream media are shouting: Could OPEC play second fiddle to US’s oil boom? In any case, a new world order seems to be taking shape with respect to the world’s energy generation, production and trade.

In the meantime, here is CNN’s view on this seemingly fight between Shale and conventional fossil fuel type of commerce.

Could OPEC play second fiddle to US’s oil boom?

America’s oil boom will break more records this year. OPEC is stuck in retreat

By Matt EganCNN Business

New York (CNN Business) The epic American oil boom is just getting started. OPEC, on the other hand, is stuck on the sidelines. US oil production is on track to spike to a record 13.4 million barrels per day by the end of 2019, according to a recent report by energy research firm Rystad Energy. Texas alone is expected to soon top 5 million barrels per day in oil production — more than any OPEC member other than Saudi Arabia. Oil plunges back into bear market The surge in American barrels — led by the Permian Basin in West Texas — has offset oil blocked by US sanctions on Venezuela and Iran. But all of that US oil is also contributing to a supply glut that last week sent crude into another bear market. OPEC has been forced to scale back its output — a trend that could continue as the cartel tries to prop prices back up. “We continue to see the Permian representing the key driver of global oil supply growth for the next five years,” Goldman Sachs analyst Brian Singer wrote to clients on Monday.

US daily output could soon top 14 million

The shale oil revolution has made the United States the world’s leading producer, surpassing Saudi Arabia and Russia. The ferocity of the US shale oil revolution has caught analysts off guard several times over the past decade. Rystad Energy ramped up its year-end US output forecast by 200,000 to 13.4 million barrels per day. In May, the United States likely produced a record 12.5 million barrels of oil per day, the firm added. All but four million of those barrels were from shale oilfields. That growth is expected to continue. The United States is on track to end 2020 by producing 14.3 million barrels per day, Rystad projects. That’s slightly higher than the firm previously estimated and nearly triple 2008’s output. Of course, analysts could have to rein in those blockbuster forecasts if oil prices crash significantly further. That would force American frackers to preserve cash and pull back on production.

OPEC’s production hits five year low

OPEC remains in retreat as the cartel tries to balance the market by putting a floor beneath prices. OPEC’s oil production tumbled to 29.9 million barrels per day in May, the lowest level in more than five years, Rystad said. OPEC output is down 2.6 million per day since October 2018 — the month before oil prices crashed into the last bear market. Khalid al-Falih, Saudi Arabia’s energy minister, said on Friday that OPEC is close to a deal to extend its production cuts. Those cuts, which Saudi Arabia has borne the brunt of, are due to expire at the end of June. The stock market is ‘spoiled’ by rate cuts” We think that OPEC will at least maintain its output cuts, and maybe even deepen them at their next meeting,” Caroline Bain, chief commodities economist at Capital Economics, wrote in a note to clients on Monday. Rystad dimmed its projection for Saudi Arabia’s oil production from 10.6 million barrels per day to 10.3 million.

Venezuela, Iran under pressure

OPEC’s output could be further hurt by problems in some of its member countries. Iran’s oil exports have plunged because of US sanctions. The years-long collapse of Venezuela’s oil industry has been accelerated in recent months by US sanctions and sprawling blackouts in the South American nation. “There appears little prospect of a recovery in output from Iran or Venezuela any time soon,” Bain wrote. Violence is also threatening oil production in Libya and Nigeria. All told, Rystad Energy estimates 1.3 million barrels per day of oil production is at risk in those four OPEC nations. “Risks to short-term supply are undoubtedly still plentiful,” Rystad analyst Bjørnar Tonhaugen said in the report.

Will crude slide below $50?

Despite all this, analysts aren’t predicting a spike in oil prices. If anything, forecasters are bracing for more pressure on prices, due in part to robust US production. Brent, which has tumbled about 15% since late April to $63 a barrel, should finish the year at around $60 a barrel, according to Capital Economics. The US economy is about to break a record. These 11 charts show why US oil prices, trading at about $54 a barrel, are down nearly 19% since late April. Recent selling has been driven by a spike in oil inventories that suggest demand for crude is deteriorating. Goldman Sachs said that a reversal in the oil demand metrics will be required to prevent US oil prices from sinking below the $50-$60 range.”Our real concern is over demand weakness,” consulting firm Facts Global Energy wrote in a report on Monday. “Have we entered an era where demand will keep falling and we have a lot more oil on our hands than expected?”

Despite a difficult business environment in Iran . . .

Despite a difficult business environment in Iran . . .

APO Group – Africa Newsroom / Press release informs that despite a difficult business environment in Iran . . . , 865 exhibitors from 21 countries present the entire value chain at Iran agrofood 2019. Here it is.

Despite difficult business environment in Iran, 865 exhibitors from 21 countries present the entire value chain at Iran AgroFood 2019

National pavilions of Brazil, China, Germany, India, Italy, Russia and Turkey

TEHRAN, Islamic Republic of Iran, June 5, 2019/APO Group/ —

Despite the currently difficult business environment in Iran, as many as 865 exhibitors from 21 countries will be presenting their products, solutions and technologies “from field to fork” at iran agrofood 2019. More than 40,000 trade visitors from all over Iran and neighbouring countries are again expected. Brazil, China, Germany, India, Italy, Russia and Turkey will be represented with official pavilions this year. iran agrofood consists of the five partial events iran agro, iran food + bev tec, iran bakery + confectionery, iran food ingredients and iran food + hospitality and has been organised by the German trade show specialists fairtrade (www.fairtrade-messe.de) and its Iranian partner Palar Samaneh (www.Palar-Samaneh.com). The 26th edition will take place from 18 to 21 June 2019 at the Teheran International Fairground.

The exhibitors come from Austria, Brazil, China, Denmark, Georgia, Germany, Greece, India, Indonesia, Iran, Italy, Mongolia, Netherlands, Poland, Russia, Slovakia, Spain, Switzerland, Tunisia, Turkey and the United Arab Emirates.

Seven official national pavilions

Brazil, China, Germany, India, Italy, Russia and Turkey are present at iran agrofood 2019 with official national pavilions. The Netherlands and Switzerland are represented through stands of their embassies.

Following the successful participations in 2017 and 2018, Brazil will again be present this year with an official pavilion at iran food + hospitality, organised by the Brazilian Embassy in Tehran. 10 Brazilian companies will present the finest meat, coffee and food from Brazil.

China participates with 19 exhibitors at iran food ingredients, iran food + hospitality and iran food + bev tec.

The official German Pavilion is presented by the German Federal Ministry for Economic Affairs and Energy, in cooperation with the Association of the German Trade Fair Industry (AUMA) and supported by VDMA Food Processing and Packaging Machinery. Altogether 15 German companies take part in iran food + bev tec & iran food ingredients.

Not less than 24 Indian exhibitors display their products at iran food ingredients & iran food + hospitality, supported by the India Trade Promotion Organisation ITPO, the Associated Chambers of Commerce & Industry of India ASSOCHAM, and the Cashew Export Promotion Council of India CEPCI.

For many years Italy has been one of the most important exhibitor nations at iran food + bev tec. While the Italian participation in recent years has been organized solely privately, the 2019 Italian participation featuring 22 Italian exhibitors is for the first time complemented by an official Italian pavilion with the support of the Italian Trade Agency ITA.

The Russian Federation presents itself for the first time at iran agro 2019 with two official pavilions. One from the Republic of Bashkortostan, Russia’s most populous republic. And another from the Kabardino-Balkar Republic in the North Caucasus. Both pavilions are officially supported by the Russian Export Center. A total of 9 Russian exhibitors will present technologies for agriculture, milk production and water treatment.

As in previous years, Turkey will again be officially represented this year at iran food + bev tec & iran food + hospitality. The Turkish pavilion with 11 exhibitors is supported by the Turkish Ministry of Trade.

The 26th edition will take place from 18 to 21 June 2019 at the Teheran International Fairground

Iran agrofood 2019 presents the entire value chain “from field to fork”

Iran agro 2019 – The agricultural event within iran agrofood

At iran agro 2019, 51 exhibitors from 6 countries (http://bit.ly/2Z24ysG) present adapted technologies and solutions for the Iranian market in the fields of crop production, agricultural technology and animal husbandry.  

Iran food + bev tec & iran bakery + confectionery 2019

331 exhibitors from 12 countries (https://bitly.is/2WdkWEJ) take part in iran food + bev tec & iran bakery + confectionery, a who-is-who of the international elite of food, bakery + confectionery, beverage and packaging technology.

Iran food ingredients 2019

70 exhibitors from 11 countries (http://bit.ly/31cyNz2) participate at iran food ingredients 2019, including many of the world’s leading suppliers.

Iran food + hospitality 2019

413 exhibitors from 10 countries (http://bit.ly/2WJU4Ax) present all of their latest food & beverage products and food service equipment at Iran’s leading trade show.

For more information:

Distributed by APO Group on behalf of Fairtrade Messe und Ausstellungs GmbH & Co. KG.

Pictures in high resolution can be requested by email.

Media Contact for Press:
fairtrade Messe GmbH & Co. KG
Ms Nadine Wagner
Public Relations
Kurfürsten-Anlage 36
D-69115 Heidelberg
Tel +49 / 62 21 / 45 65 22
n.wagner@fairtrade-messe.de
www.fairtrade-messe.de

Contact for Exhibitors:
fairtrade Messe GmbH & Co. KG
Mr Paul März
Project Management
Kurfürsten-Anlage 36
D-69115 Heidelberg
Tel +49 / 62 21 / 45 65 13
p.maerz@fairtrade-messe.de
www.fairtrade-messe.de

Contact Iran:
Palar Samaneh Co.
Ms Ladan Maleki
Apt.1, Amin Building (No.18) – Amini Alley
South Shiraz St.
Molasadra
IR – Tehran 14358-93681
Tel: +98 21 88 05 94 57
       +98 21 88 05 94 58
       +98 21 88 05 94 59
Fax: +98 21 88 04 48 17
palarsamaneh@gmail.com
www.Palar-Samaneh.com

fairtrade – Valuable business contacts:
fairtrade (www.fairtrade-messe.de) was founded by Martin März in 1991. Since long, fairtrade ranks among the leading organisers of professional international trade fairs in emerging markets, especially in North and Sub-Saharan Africa, the Middle East and Eastern Europe. Managed by its shareholder and his son Paul März and committed to the values of a family business and the team spirit, fairtrade maintains a powerful network of partnerships throughout the world. fairtrade organizes shows in the sectors Agrofood, CIT Solutions, Energy, Industry and PlastPrintPack and strives for a high level of customer satisfaction.

By means of innovative products and excellent service fairtrade organizes professional platforms for valuable business contacts between exhibitors and visitors. fairtrade is a member of UFI The Global Association of the Exhibition Industry and AAXO The Association of African Exhibition Organisers. The management is ISO 9001:2015 certified.

Palar Samaneh:
Based in Tehran Palar Samaneh (www.Palar-Samaneh.com) has organised over 50 international trade fairs of major importance in Iran over the past 10 years. Having played an important role in the growth of the Iranian trade fair market, Palar Samaneh makes use of this knowledge for the benefit of its customers.

In addition to their exhibition organization department, its stand building unit serves individual exhibitors as well as country pavilions all over the Middle East and the CIS-countries.

A new kind of company is revolutionising Africa’s gig economy

A new kind of company is revolutionising Africa’s gig economy

The World Economic Forum article dated 28 May 2019, could well be applied to most of the countries of the MENA region. Apart from the oil exporting ones, all the others’ informal economy appears to the naked eye as undergoing the same phenomenon but perhaps at a lesser density. In effect, very much like in the neighbouring sub-Saharan regions, the MENA’s informal markets seem to be pushing towards a new kind of business structure. A new kind of company is revolutionising Africa’s gig economy? Aubrey Hruby, Senior advisor to Fortune 500 companies replies.

For more than 30 years, governments and international development organizations have followed the same recipe for formalising the world’s informal economy; enacting new legislation and regulations or abolishing those that get in the way of the process.

Yet despite their efforts, 93% of the world’s informal employment is still found in emerging and developing countries, with 85.8% of employment in Africa considered informal. In Kenya, sub-Saharan Africa’s fifth-largest economy, the informal sector – commonly referred to as Jua Kali – is the country’s main job creator. According to the 2019 Economic Survey by the Kenya National Bureau of Statistics, Jua Kali was responsible for 762,100 of the 840,600 new jobs created last year. The ‘gig economy’, a new concept in developed markets, has been the norm in developing economies for decades.

A man waits for M-Pesa customers at his shop in Kibera in Kenya's capital Nairobi December 31, 2014. Safaricom, Kenya's biggest telecoms firm, is a model of how technology can be used to financially include millions of people with mobile telephones but without access to traditional infrastructure such as the banks that are available to the wealthy or those living in cities. Safaricom in 2007 pioneered its M-Pesa mobile money transfer technology, now used across Africa, Asia and Europe. It proved that money can be made from people who earn a few dollars a day.
Can ‘bridge companies’ like M-Pesa forge links between Africa’s formal and informal economies? Image: REUTERS/Noor Khamis

By 2035, Africa will contribute more people to the workforce each year than the rest of the world combined. By 2050, the continent will be home to 1.25 billion people of working age. In order to absorb these new entrants, Africa needs to create more than 18 million new jobs each year. Given the urgent need to provide jobs and livelihoods to Africans, it is time to examine the conventional wisdom that informal markets must transition into formal markets. Development finance institutions (DFIs) and private investors in African markets can play a critical role in both advancing Africa’s gig economy and changing the narrative that growth in informal markets is incompatible with sustainable development.

Across African markets, companies are pioneering business models that bridge the formal and informal sectors; in these models, each company is a formal entity but can mobilise large numbers of informal actors in their supply chains or service delivery. While this has been done in dairies in Kenya and at coffee and cocoa outgrowers across the continent and in other sectors for nearly a century, the penetration of mobile phones has enabled a new breed of African companies to monetise their ability to organize and inject trust into fragmented informal markets. However, unlike Uber or Airbnb, which disrupted largely formal sectors, many of Africa’s new ‘gig economy’ firms are writing the rules for whole new industries in local markets.

Perhaps the most high-profile example is Safaricom’s M-PESA. Since its launch in 2007, M-PESA, a mobile payments system developed by Kenya’s largest telecoms operator, has enabled millions of informal sector workers to move money at a lower cost, which has provided a significant boost to the Kenyan and Tanzanian economies. Another, more recent example, is Nigeria’s Cars45, operated by Frontier Car Group. Nigeria’s $12 billion used car industry is largely informal and characterised by distrust, a lack of standardisation and the absence of a structured dealer network. Cars45 facilitates the buying and selling of used cars by pricing and rating their condition transparently and conducting online auctions. Many sectors throughout the continent remain highly informal and would benefit from these types of bridges into formality. These ‘bridge companies’ are going to define the future of employment in African countries.

DFIs are ideally placed to invest in bridge companies in African markets, given their long presence and in-depth engagement with local financing environments. The International Finance Corporation (IFC) and the UK’s CDC Group already invest in technology-enabled start-ups, and others, including OPIC, are adapting their strategies to be able to do so. Many of the continent’s most promising technology-enabled bridge companies are starting to raise funding large enough to attract the attention of DFIs. Frontier Car Group recently raised $89 million, Kenya’s Twiga Foods raised $10 million, and Nigeria’s Kobo365 has raised $6 million. Overcoming a dearth of funding remains one of the highest barriers for African entrepreneurs, and the development impact of investing in those that improve employment is enormous.

The gig economy comes with limitations. Lack of legal rights, limited career progression, stagnant pay and a lack of benefits are just some of the issues that will need to be addressed in an ‘Uberised’ world. These challenges, plus the day-to-day economic uncertainty, make the informal sector far worse in many ways than the formal. Bridge companies – because they are registered, and have a public brand and centralised management – can be pressured into addressing issues around workers’ wellbeing. Studies into the financial behaviours and needs of low-income families by BFA, a consulting firm specialising in financial inclusion policies, found that workers often aspired to ‘gig economy’ jobs but hated casual labour (such as waiting on a corner to be hired for the day) because of the lack of reliability and predictability.

The future of work is changing and the mass job creators of today will not be able to meet the needs of tomorrow’s workforce in the same way. Bridge companies are pioneering new ways of injecting efficiency and higher productivity into traditional informal markets. Investing in this trend is critical to solving Africa’s pressing job creation need.

Have you read?

English football: a proxy battleground for feuding Gulf states?

English football: a proxy battleground for feuding Gulf states?

The six Gulf Co-operation Council (GCC) states have used their oil exports revenues of the past years not only to spend lavishly but to plan for a peaceful and serene future.  So English football: a proxy battleground for feuding Gulf states?

Decades earlier, low oil prices meant economic disaster for a region that once controlled the world’s leading energy supplies impacting their sovereign wealth fund holdings.  The ‘rentier’ states had to cope, some for the first time, with rising budget deficits.  They had to conjure up policies to make good use of the classic rentier state economy involving a reduction in their dependence on oil revenues. A historical shift was handled quite artfully with notable policies of diversification of the respective economies and eventually getting hold of some ‘Soft Power’.  Education, Sports and TV Entertainment or News channels amongst many other sectors of human activities were not precisely only bad earners in terms of Dollars.  While there seems to be no question about the proceeds from the sector as mentioned earlier’s sales, these might have been central to the development of the Gulf States rivalries, eventually leading to the enduring present day blockade of Qatar.

So: English football: a proxy battleground for feuding Gulf states?

Image result for English football: a proxy battleground for feuding Gulf states?

Simon Chadwick, University of Salford

There’s nothing like a Saturday night scoop to get social media buzzing. Revelations that a Qatari investor wants to acquire a stake in Leeds United certainly did. If the story is correct, then it seems Qatar Sports Investments (QSI), which already owns French club Paris Saint-Germain (PSG), is interested in buying shares in the Yorkshire based English Championship football club.

In some ways, we shouldn’t be surprised by the report, as Leeds United’s current majority shareholder, Italian Andrea Radrizzani, is thought to be seeking a buyer for his holding in the club. Indeed, some reports suggest that he may be negotiating with as many as six parties with a view to them buying a stake.

That a Qatari group is showing interest should be no surprise either; after all, the Yorkshire outfit already has a partnership with the small Gulf nation’s Aspire Academy. Over the last two years, rumours have been recurrent that big money from Doha will, sooner or later, be invested.

Hence, it was the timing of the latest rumour’s emergence that was actually more revealing than the rumour itself. It came after a tumultuous week in football (and sport more generally) which was stitched together by a narrative stretching from Manchester, through Paris, to Doha and Abu Dhabi.

A big week for Qatar

The previous weekend, Abu Dhabi-owned Manchester City won the English FA Cup, which ensured the club secured an unprecedented domestic treble of trophies (alongside the club’s Premier League title and Carabao Cup win). City’s success, however, was very quickly tempered by stories that UEFA may ban the club from the Champions League for what are alleged to be serious breaches of the European football governing body’s Financial Fair Play regulations.

Later in the week, news came through that two PSG board members – Nasser Al-Khelaifi and Yousef Al-Obaidly – are being investigated on suspicion of corruption in connection with Qatar’s bid to host the 2019 IAAF World Athletics Championship in Doha. Significantly, Al-Khelaifi is president of PSG but also chairman of QSI (the Qatari investment group behind the alleged Leeds bid) and a member of UEFA’s executive committee. Al-Obaidly is chief executive of the Qatari media group beIN.


Read more: Football may be caught in the crossfire between Qatar and the Saudis


It was quite a week for the Qataris, as news also broke that FIFA will concede during its forthcoming council meeting that the 2022 World Cup will be contested by 32 teams. FIFA had been pressing for an increase in tournament size to 48 teams, though this would have necessitated Qatar sharing the tournament with at least one other country. Qatar, though, is currently engaged in an acrimonious feud with its near neighbours, notably the United Arab Emirates (UAE), Saudi Arabia and Bahrain, so FIFA’s capitulation was effectively a victory for Qatar over its rivals.

The Gulf feud is ongoing, having broken out two years ago following a visit to Riyadh by a bellicose Donald Trump. Since then, all manner of tactics have been used by the countries involved, ranging from heavy political lobbying in Washington DC through to an online war in which misinformation has been spread.

The spat has spread into sport, too. Frequent reports allegedly spread by pro-Saudi consultants have sought to discredit Qatar’s World Cup hosting by making dubious claims about its ability to stage the tournament. Meanwhile, BeIN has fallen victim to a massive and concerted bootlegging operation instigated by BeoutQ, which appears to be a Saudi Arabian-backed pirate channel that has stolen the Qatari broadcaster’s content.

The feud spreads

Qatar hasn’t stood idly by in the face of such provocation, often spending lavishly both to demonstrate its oil and gas fuelled economic strength and to project its soft power. The world record breaking transfer of Brazilian international Neymar, from FC Barcelona to PSG, is the most potent symbol of this, as the government in Doha set out to shift attention away from its rivals while simultaneously making a statement about the aspirations of Qatar.

As such, the news that QSI may be circling Leeds United doesn’t seem to be about a Qatari penchant for Yorkshire puddings, nor is it merely a nice opportunity to generate some Saturday night clickbait. Rather, it suggests the opening of another front in a feud which, instead of resolving itself, appears to be intensifying. Rather than being the dawn of a new era for Leeds United, the club may consequently be on the cusp of being drawn into a bitter battle of competing geopolitical interests.

The dense network of connections and conflicts between the likes of Qatar Sports Investments, Saudi Arabia, UEFA and Abu Dhabi may therefore be about to span the English Pennines, sparking a new War of the Roses between Yorkshire and Lancashire. Given the on-off speculation about Saudi Arabia’s purchase of Manchester United, and Abu Dhabi’s continued lavishing of its wealth upon Manchester City (as well as its rumoured acquisition of Newcaste United), these Gulf states are strengthening their hold over Lancashire, the western side of the Pennines, and possibly further north too.

In buying Leeds United, their rival, Qatar, would be shoring up its own defences in neighbouring Yorkshire, meaning that the Gulf region’s proxy war could spill over into English football. Thus, as fans on both sides of a historic English divide anticipate the prospect of their clubs’ battle for supremacy, they should remain mindful that Elland Road and the Etihad Stadium could become modern day proxy battlefields in a new stand-off between the houses of York and Lancaster.

Simon Chadwick, Professor of Sports Enterprise, University of Salford

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Costs of Corruption running deep in the MENA

Costs of Corruption running deep in the MENA

The IMFBlog on May 28, 2019, is about a world phenomenon that seems to still be present in all walk of life throughout the world. The Costs of Corruption running deep in the MENA, have been amplified by the hydrocarbon-related rentier economies to a point where only a defossilisation of the respective economies could somehow reduce their extent. In the meantime, costs of corruption running deep in the MENA seem to go unattended to. Anyway here is this IMFBlog article.

Corruption and Your Money

The costs of corruption run deep. Your taxpayer dollars are lost in different ways, siphoned off from schools, roads, and hospitals to line the pockets of people up to no good.

Equally damaging is the way it corrodes the government’s ability to help grow the economy in a way that benefits all citizens.

And no country is immune to corruption. Our Chart of the Week from the Fiscal Monitor analyzes more than 180 countries and finds that more corrupt countries collect fewer taxes, as people pay bribes to avoid them, including through tax loopholes designed in exchange for kickbacks. Also, when taxpayers believe their governments are corrupt, they are more likely to evade paying taxes.

The chart shows that overall, the least corrupt governments collect 4 percent of GDP more in tax revenues than countries at the same level of economic development with the highest levels of corruption.

A few countries’ reforms generated even higher revenues. Georgia, for example, reduced corruption significantly and tax revenues more than doubled, rising by 13 percentage points of GDP between 2003 and 2008. Rwanda’s reforms to fight corruption since the mid-1990s bore fruit, and tax revenues increased by 6 percentage points of GDP.

These are just two examples that demonstrate that political will to build strong and transparent institutions can turn the tide against corruption. The Fiscal Monitor shines a light on fiscal institutions and policies, like tax administration or procurement practices, and show how they can fight corruption.

The costs of corruption run deep.

Where there is political will, there is a way

Fighting corruption requires political will to create strong fiscal institutions that promote integrity and accountability throughout the public sector.

Based on the research, here are some lessons for countries to help them build effective institutions that curb vulnerabilities to corruption:

Invest in high levels of transparency and independent external scrutiny. This allows audit agencies and the public at large to provide effective oversight. For example, Colombia, Costa Rica, and Paraguay are using an online platform that allows citizens to monitor the physical and financial progress of investment projects. Norway has developed a high standard of transparency to manage its natural resources. Our analysis also shows that a free press enhances the benefits of fiscal transparency. In Brazil, the results of audits impacted the reelection prospects of officials suspected of misuse of public money, but the impact was greater in areas with local radio stations.

Reform institutions. The chances for success are greater when countries design reforms to tackle corruption from all angles. For example, reforms to tax administration will have a greater payoff if tax laws are simpler and they reduce officials’ scope for discretion. To help countries, the IMF has built comprehensive diagnostics on the quality of fiscal institutions, including public investment management, revenue administration, and fiscal transparency.

Build a professional civil service. Transparent, merit-based hiring and pay reduce the opportunities for corruption. The heads of agencies, ministries, and public enterprises must promote ethical behavior by setting a clear tone at the top.

Keep pace with new challenges as technology and opportunities for wrongdoing evolve. Focus on areas of higher risk—such as procurement, revenue administration, and management of natural resources—as well as effective internal controls. In Chile and Korea, for example, electronic procurement systems have been powerful tools to curtail corruption by promoting transparency and improving competition.

More cooperation to fight corruption. Countries can also join efforts to make it harder for corruption to cross borders. For example, more than 40 countries have already made it a crime for their companies to pay bribes to gain business abroad under the OECD anti-corruption convention. Countries can also aggressively pursue anti–money laundering activities and reduce transnational opportunities to hide corrupt money in opaque financial centers.

Curbing corruption is a challenge that requires persevering on many fronts, but one that pays huge dividends. It starts with political will, continuously strengthening institutions to promote integrity and accountability, and global cooperation.

Related Links:
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