corruption

By Martin Arnold, Banking Editor, in Davos

The first of many debates about China at Davos this year made an unexpectedly hostile debut this morning as Zhang Xin, head of Beijing’s biggest property developer Soho, was put on the spot over the country’s crackdown on corruption.

“Your industry is one of the most corrupt in China,” said moderator Andrew Browne, China editor of the Wall Street Journal, as he asked Ms Zhang to share her views on the issue. Read more

By Catherine Contiguglia
♦ The signing of a contract between the Somali government and UK oil and gas exploration company Soma to collect data on onshore and offshore oil has been called non-transparent, and raised concerns about whether oil politics could destabilise the country’s fragile recovery.
♦ Prague’s CorruptTour agency is selling out bookings for their Crony Safari that brings tourists to a sites connected with the most famous corruption scandals – from an address registered by 600 companies to a school where cash can buy a degree.
♦ The monetary tightening by India’s central bank could close credit arteries and make it difficult for the country’s banks to cover a mass of rapidly souring loans, writes Reuters’ Andy Mukherjee, as short term funding costs have increased during a time where the economy has slowed and the stock market is slumping.
♦ The drive by policy makers to put Fannie Mae and Freddie Mac out of business doesn’t make any sense, writes Joe Nocera, as they are no longer bullies, are making the government money, and are necessary to uphold the core of American housing finance.
♦ The sit-ins being held around Egypt by those in favour of reinstating President Mohamed Morsi will likely not work, according to an analysis by Foreign Policy’s Erica Chenoweth, as studies show that nonviolent campaigns must follow a strategy of carefully sequenced moves, or they can end in catastrophe. Read more

Chief justice Adly Mansour is sworn in as interim president the day after Mohamed Morsi is ousted (Getty)

Among Egyptians of all political stripes, there is a pervading conviction that talented and top-notch specialists who know their jobs well can help fix the nation’s myriad problems. The interim government installed by the military after the overthrow of Mohamed Morsi’s Islamist-dominated government has begun a flurry of appointments of so-called technocrats to key government posts.

It has appointed economist Hazem Beblawi as prime minister and named another noted economist, Ahmed Galal, as finance minister. It has begun assembling a constituent assembly that will be filled with experienced judges and legal experts. Mohamed ElBaradei, the former UN nuclear chief and Nobel laureate, has been sworn in as a vice-president for foreign affairs.

But the belief that a government of competent, cleverly-placed and politically neutral technocrats can solve problems as deeply entrenched as those Egypt faces is at best questionable and at worst fantasy. Read more

♦Cecile Kyenge, Italy’s first black minister, is confronting the country’s culture of casual racism, but the success of her proposed legislation depends on her fellow parliamentarians – some of whom have not been entirely complimentary about her.
♦ China is pushing to water down the World Bank’s Doing Business report, showing its increased assertiveness at international bodies and its willingness to challenge liberal economic prescriptions.
♦ Growth in Indonesia has reached its slowest pace in two years, hit by the slowdown in China and India, but investors are still feeling confident.
♦ David Gardner argues that Israel’s latest attacks on Syria play right into Assad’s hands supporting conspiracy theories about a western-conceived attempt to destroy Syria.
♦ Somalia’s president, Hassan Sheikh Mohamud, calls for a Marshall plan to help his country recover from decades of poverty, civil war and terrorism.
♦ Roberto Azevêdo of Brazil and Herminio Blanco of Mexico are scrambling to secure last-minute votes in a tight race to become the next head of the troubled World Trade Organisation.
♦ Hollywood film-makers are going to great lengths to satisfy the whims of Chinese censors. However, appearances by Chinese actors in the Chinese version of Iron Man 3 have not been to everyone’s taste – “
One microblogger named Bumblebee Marz compared the new scenes to chicken ribs — a common expression denoting the most tasteless and undesirable cut of meat in Chinese cuisine.
♦ Dexter Filkins looks at the White House debate over Syria. According to Gary Samore, who was President Obama’s chief adviser on weapons of mass destruction until February,
“All the options are horrible”.
♦ Obama’s off-the-cuff remark about large quantities of chemical weapons crossing a “red line” have now put him into a bind, “his credibility at stake with frustratingly few good options.”
♦ Gabriel Kuris at Foreign Policy looks at how Latvia’s anti-corruption bureau managed to pass through reforms and take down oligarchs. Read more

Peña Nieto: taking on the old guard (Getty)

Elba Esther Gordillo encapsulates everything that is wrong with the “old Mexico”. The optimistic view of her arrest on Tuesday night, after the 68-year old union leader decamped from a private flight from San Diego, is that it shows what the “new Mexico” might become – a country where nobody is untouchable and the rule of law reigns. The cynical view is that it shows the government of Enrique Peña Nieto pursuing Mexican politics-as-usual: anyone who gets in the president’s way will be metaphorically decapitated and their head stuck on a pike as a warning to others.

Either way, Gordillo, a.k.a. “La Maestra”, is one of the most loathsome figures in Mexican politics. The head of the 1.5m teachers union, the largest in Latin America, has long been a byword for corruption, influence peddling and old-school clientelist politics. Yet although accusations have been brought against her before, no charges have ever been pressed. Now, they have. Read more

Last Sunday morning, “El Niño Verde” – as Jorge Emilio González, a young Mexican senator, is known – was driving down a central thoroughfare in Mexico City in his Mercedes Benz. When the police stopped him for a breathalyzer test, the gallant young rake protested, and gave a false name. But the police insisted, whereupon the bodyguards of the 40-year old senator for the state of Quintana Roo jumped out of their car, and threatened the hapless cops. Normally, this story would be of no transcendence whatsoever – just another run-of-the-mill tale of corruption and the impunity of power. But the local press have leapt on the story with glee – perhaps because it is a telling, and may be even hopeful, vignette of the state of modern Mexico.

To describe “El Niño Verde” as a politician probably stretches the definition of the word, although politics runs in the family. His grandfather was a senator and one-time presidential candidate. His father then founded Mexico’s “Green Party” – another misnomer, although it does explains González’s nickname, which literally means “the green boy”. In one infamous incident in 2004, González was filmed in conversation with a property developer who wanted his help, for a price, to facilitate planning permission to build a hotel in an ecologically protected area near the tourist resort of Cancun. There are other far more tawdry tales that have since attached to this clearly unpleasant young man. And, each time, he has managed to wriggle free, exercising the impunity that he long enjoyed as a member of an old political clan. Read more

Grateful to Jose Antonio Martinez Soler for this photomontage doing the rounds of Spain’s blogosphere

The headline around which almost the entire Spanish political (and royal) class appear to be creasing themselves with laughter says: “Former British minister resigns for lying about a traffic fine”. Read more

For those used to a democratic system with an established political dynamic – Democrats v Republicans in the US, or Conservatives, Labour and Liberal Democrats in Britain – Italy can seem strange. Some of the parties and alliances running in this year’s general election did not even exist in previous contests.

Italians will be asked to vote in February for one of 169 parties, movements and groups that made it onto the ballot. Many have unfamiliar names, such as the newly formed alliance of Italy, Common Good (which combines the Democratic party, the socialists and others), the Five Star Movement party created by the former comedian Beppe Grillo, or the even newer Monti movement, formed around the agenda of the ex-prime minister.

Data collated by the FT

How could the Italian political system have worked for so long with such a fragmented composition? The answer is that, for most of the time, it hasn’t.

 Read more

Nikolay Kolev, better known as ‘Bosiya’ (Barefoot), was arrested in Sofia on Tuesday after he threw a single tomato at the wall of Bulgaria’s parliament, in protest against corruption. Now a ‘tomato rally’ is planned for Saturday afternoon outside parliament. Read more

Roberto Formigoni, who this month resigned as the governor of Lombardy after the arrest of his deputy, with former prime minister Silvio Berlusconi (R) in 2010 (TIZIANA FABI/AFP/Getty Images)

The wave of corruption scandals that is engulfing Italy prompts me to ask if we are witnessing a “1992 moment” – that is to say, the start of an unstoppable process that will sweep away much of the political establishment.

The question has two answers. The first is that the Italian upheaval of 20 years ago, though it destroyed the old political party system, promised more fundamental change than it ultimately delivered. So do not raise your expectations too high today.

Some optimistic political commentators thought it safe in the 1990s to suggest that Italy’s corrupt post-1945 First Republic, dominated by the Christian Democrats and their allies, was giving way to a cleaner, more responsible Second Republic. But these hopes turned out to be misplaced.

Secretive networks of influence and self-indulgence at the expense of taxpayers continued, and continue, to shape the activities of the political classes. The mafia, rampant in the 1980s and early 1990s, shrank to some extent into the shadows, but it has never loosened its connections to politics, business and state administration. Read more

Launch event in Brussels. Photo courtesy Transparency International

The launch event for the report in Brussels. Photo: Transparency International

With its fragmenting monetary union, tottering banks and politically discontented citizens, the last thing the European Union needs to hear is that it has an embarrassing public and private sector corruption problem on its hands.

Yet this is the conclusion of a new report from Transparency International, the global anti-corruption watchdog.

“Political parties, public administrations and the private sector are assessed as the weakest forces in the promotion of integrity across Europe,” says the report. Political party funding is inadequately regulated, lobbying remains veiled in secrecy, parliaments don’t live up to their own ethical standards, public procurement practices breed corruption and there isn’t enough legal protection for whistleblowers. Read more