Nigerian Ex-Governors Soup it out in EFCC Detention Cells

The recent arrest and subsequent arraignment in court of some ex-governors of the immediate past administration by the Economic and Financial Crimes Commission (EFCC) is a culmination of the much awaited show down between the commission and the indicted governors. So far the ex-governors picked up include Uzor Kalu (Abia State), Jolly Nyame (Taraba State), Saminu Turaki (Jigawa State) and Joshua Dariye (Plateau State). Chimaroke Nnamani (Enugu State) and Ayodele Fayose (Ekiti State) have been declared wanted and would soon be picked up. While Nnamani is hold up in the National Hospital Abuja undergoing treatment for what appears to be a specious and convenient ailment, Fayose’s whereabouts is unknown.

It is laudable of the EFCC to make good its promise to the Nigerian people of prosecuting these indicted ex-governors. While in office, under the protection of immunity conferred on them by virtue of their offices, many of these ex-governors had dared the EFCC to prosecute them. Loud-mouth boasts of how wealthy they were before assumption of office and how no one could do arrest them were made by many. Kalu was reported as having boasted in his characteristic crassness and bad grammar to have single-handedly bankrolled the Peoples Democratic Party (PDP), insinuating that he was untouchable. “If the PDP was a company, I would own 70%.” (sic) – he is reported to have boasted. Now that they are out of office and have been stripped of the immunity protection of the office they are running scared, feigning ailments and crying like little girls who have lost their dolls.

Saminu Turaki’s cases particularly disheartening, being indicted for misappropriating about 36 billion Naira. This works out to an embezzlement rate of about 375 million Naira monthly, of the 8 years Turaki was in power in Jigawa State. Kalu is currently being arraigned on a 3 billion Naira embezzlement charge, but this may grow to as much as 59 billion Naira, the total amount for which the former Abia state governor is being investigated. Jolly Nyame, who is purportedly a man of the cloth (he is a reverend), has admitted to gross acts of corruption (1.6 billion Naira so far) and offered to return the stolen monies for some form of amnesty. Joshua Dariye, who is also indicted in the UK on money laundry charges linked directly to the EFCC investigation stands accused of embezzling several hundreds of millions of Naira in his care while he was governor of Plateau state.

Chimaroke Nnamani has requested to have his 5.6 billion Naira embezzlement indictment transferred to Federal High Court number 10 in Lagos in what appears to be a delay tactic, but that notwithstanding would only be postponing the judgment day as the evidence against him appears very strong. From his purported sick-bed in Abuja, Nnamani bleats some redundant “I am being persecuted” rhetoric, albeit trite and ineffectual, in his wishful bid for vindication.

These six ex-governors who are currently being prosecuted by EFCC make up only but a minority fraction of ex-governors who should be prosecuted. Bola Tinubu (Lagos), Peter Odili (Rivers), James Ibori (Delta), Lucky igbenedion (Edo), Abubakar Audu (Kogi) are some of the ex-governors that are being investigated by the EFCC. It is only when the full complement of ex-governors involved in corrupt self-enrichment, embezzlement and other financial crimes have been brought to book, that the EFCC would rightfully deserve all the praises it has garnered locally and internationally. It would also quell allegations of selective persecution, and rumours of a pact purportedly made by Ibori, Igbenedion and Odili with Yar’Adua for the former three to cede the PDP presidential ticket nomination to the latter in exchange for amnesty from prosecution by the EFCC. It appears Yar'Adua seeks to prove his independence from the OBJ led cabal as evident in his recent ministerial picks. If this is true, then we would sooner be seeing other erring ex-governors in the holding cells of the EFCC - Sweet Justice at last for the millions of hapless Nigerians whose lives have been nothing but a living hell by the criminal acts of these thieving ex-governors and their cronies.

Three-Year-Old Tot Kidnapped in Port Harcourt, Nigeria

Last week’s kidnapping of three-year old Margaret Hill in Port Harcourt by a so-called Niger Delta Militant group gives patent lucidity to the extent of decadence and depravity of the criminal organizations prowling the Nigerian Niger Delta enshrouded in the dubious cloak of environmentalism and freedom fighting. The lukewarm and conciliatory approach of the Obasanjo government in past 8 years in handling the Niger Delta crisis has done nothing but to embolden these criminals and spurned several tens, possibly hundreds of criminal gangs who prowl the region maiming, kidnapping, disrupting oil production and extorting ransoms from the oil companies, government and private citizens.

Often, these ransoms are negotiated through intermediary negotiators, who in many cases, are in cahoots with the criminal militant groups and are just a component of the larger organized criminal industry. What exists now is an efficient criminal industry complete with symbiotic relationships between arms dealers, pirates, illegal oil bunkerers, kidnappers, negotiators and criminal politicians. Granted, not all negotiators and politicians are in cahoots with these criminal groups, but it would be difficult to make a case in the contrary for many of them. For example, the impeached former governor of Bayelsa state, Alamieyeseigha was known to have retained the services of MEND and other militant groups while he was governor to keep his political opponents in check in return for several millions of Naira (labeled security vote) paid out to these militant groups.

Indeed, Alamieyeseigha’s impeachment may have been partly responsible for the explosion of militancy in the Niger Delta. With their benefactor incarcerated, and government’s unresponsiveness to their demands for his release, these groups stepped up their activities in pursuit of other avenues for money. Kidnapping, bunkering and piracy came easy particularly as they were left unchecked by the Obasanjo government either by the lack of political foresight, attitudinal apathy to the plight of the Nigerian polity or a confused and convoluted bid to be politically correct.

The Yar’Adua government faces a Herculean job to undo the damage done by his predecessor’s years of inept management of the Niger Delta crisis. One can only imagine the anguish and grief the Hill family must be going through with their toddler daughter’s kidnapping. This is as good as any time for all well-meaning Nigerians to stop being tongue-in-cheek and out rightly condemn the despicable actions of these so-called Niger Delta militants. The Yar’Adua government should do all it can to ensure that the toddler, Margaret is returned to her parents unharmed, and promptly too. And after this is done, not only should the perpetrators be hunted down like the dogs that they are, but all other criminal Niger Delta militant groups should be brought to book for theirs is a criminal cause dubiously enshrouded in the legitimate cloak of environmentalism.

If the Yar’Adua government’s actions in the past couple of weeks are predictors of its future posture then it may well be that Yar’Adua seeks to pursue the “head-in-the-sand” posture of his predecessor, indicated by his release of indicted secessionist Niger Delta militant leader Asari Dokubo. It appears the charges of treason have been dropped against Dokubo, in return, Yar’Adua is paid back with the Margaret Hill kidnapping.

President Yar’Adua’s Sham Ministerial Nominees – a Putrid Parade of Purloiners

The manner in which the new president of Nigeria has chosen to nominate members of his ministerial cabinet is a sign of things to come. It is alleged that he has given the job of ministerial nominations to the newly elected governors of the PDP won states and as a result has had eight former governors nominated for appointment by their successor protégées.

Against this backdrop, it is evident that President Yar’Adua has decided to perpetuate the decadence of the "old brigade," particularly as names of ex-governors of inglorious repute such as Ibori and Udenwa are being touted for appointment. The way ministerial appointments work in most civilized societies is to seek out the most qualified persons in terms of experience, outlook, values and competence to head public ministries and agencies. Rather, Yar’Adua’s approach is a putrid parade of purloiners. Many of these folks are alleged to have been under investigation by the Economic and Financial Crimes Commissions for gross acts of graft while they were governors. Many were wholesale abusers of human rights and flouters of court orders. Lesser allegations than these have been known to end people’s political careers in more developed societies.

It is no secret that Yar’Adua’s nomination for the PDP presidential ticket hinged heavily on the lobbying efforts of James Ibori and Lucky Igbinedion, erstwhile governors of Delta and Edo states respectively. Perhaps it is to fulfill a quid-pro-quo agreement that Yar’Adua seeks to reward Ibori with a ministerial post. Lucky Igbinedion (suspected murderer of Francis Ida) too might sooner be rewarded with a plum parastatal chairmanship or Ambassadorial post.

If the Yar’Adua administration is to gain legitimacy in Nigeria, and indeed the international community, and truly make a difference and liberate Nigeria from the claws of corruption and mediocrity, it would be better served not to engage any of these ex-governors and other persons of inglorious repute in any capacity in the administration. Yar'Adua should seek to appoint men and women of proven calibre, intellect and integrity like Nasir El Rufai, Dora Akiyuli, Ngozi Okonjo-Iweala and Nuhu Ribadu and not ones of proven mediocrity, corruption and ignominy such as the nominee ex-governors being touted.

Letter to President Yar’Adua

Dear Mr. President,

Congratulations upon your inauguration and swearing in as the President of the Federal Republic of Nigeria. As you know, for the next few months, perhaps years, your government will be regarded as being in the penumbra of the Obasanjo regime given the situation that brought you into office. Against this you must toil to carve out a unique identity for yourself and administration. To do this, you must choose wisely your vision and the folks in your cabinet to drive this vision.

Dare I suggest that you must focus on these three things amongst other things – (a) Security, (b) Rule of Law and (c) Economic development.

Security – As you know, the most pressing issue facing Nigeria today is that of security. The situation in the Niger Delta in particularly dire, with the spate of kidnapping, murder and other criminal acts perpetrated by the so-called Niger Delta militants, who claim to be fighting the cause of environmental degradation in the region. Granted, there are grave environmental issues and injustice meted out to the indigenes of the Niger Delta, but these Nihilist militants it seems perpetrate their nefarious acts with self-serving intent as is evident in the many ransoms they demand of the government and oil companies in exchange for their staff abducted by these militants.

Mr. President, my suggested solution, which apparently fell on the deaf ears of your predecessor, is to go at this problem with the entire arsenal at your disposal, and that includes – negotiation, intelligence, developmental programs and military incursion. Standing at akimbo and adopting the “head in the sand” posture of Obasanjo only worsens the situation as it not only emboldens the criminal and rogue elements in the Niger Delta, but also breeds some “legitimacy” in the chaos. A well kitted and trained force of 10,000 should be enough to take care of this.

This might appear expensive in the beginning, as it would require the investment of at least a couple of billions of dollars to develop such a force, but it beats the estimated $6 - $8 billion lost last year to the nefarious activities of these criminals. Oil holds such a strategic importance not only to Nigeria but to its Western allies, particularly the United States which derives about 9% of its oil needs from Nigeria. Mr. Yar’Adua, the US will only be too happy to help you clean up the mess in the Niger Delta if only you ask.

Rule of Law – Mr. President, your predecessor, Obasanjo made some half-hearted attempt to achieve this. While he gets kudos for instituting the Economic and Financial Crimes Commission (EFCC), and by all means you should keep this stellar agency, Obasanjo appeared to be partisan and selective in his application of the rule of law. Some people appeared untouchable if they enjoyed the patronage of Obasanjo or the PDP. For example, that illiterate thug in Anambra state, Chris Uba should have been made to face the full weight of the law when he organized the kidnapping of the Anambra state governor, Chris Ngige in 2005. Lamidi Adedibu, the cantankerous murderous leprechaun in Ibadan should have been arrested for the various criminal unrests he instigated and criminal possession of INEC machines and materials. By letting these and other beneficiaries of his patronage break the law unscathed, Obasanjo perverted justice and deepened the average Nigerian’s mistrust for the rule of law to the point of hopelessness and utter disdain, driving people to take law into their own hands.

Mr. Yar’Adua, correcting this perception by the impartial administration of justice and restoring the Nigerian’s faith in the rule of law is the only way your government would stand a chance. Do not don the crude vindictive garb of your predecessor, let the law take its course, and be quick to right wrongs as soon as they are discovered.

Economic Development – In its 47^th year since independence, Nigeria is still one of the poorest countries in the world, despite her huge potential. Few countries in the world have the human and natural resources of Nigeria, yet Nigeria lags behind these less endowed nations because of years of perennial mediocre and rogue governments, that have mismanaged and systematically plundered the little wealth accruing to the country through the oil industry, while stupidly neglecting other sectors of the economy.

As the price of oil soars to record high levels, and would likely continue to do so for the next decade or more, Nigerian stands at the cusp of an opportunity to turn its fortune around. This it can do only through good governance that is committed, accountable and able to develop and execute developmental programs and systems which will improve infrastructural and social amenities that will engender economic development.

Mr. Yar’Adua, yours is a great responsibility and the sooner you get at it with the right team and inspirational, visionary leadership, the sooner you will be able to make a difference and justify your title as President of the Federal Republic of Nigeria. Be decisive, wise and bold in all that you do in your executive capacity. Think Nigeria first, not PDP, unlike your predecessor and you will be fine.

Good Luck!

Dariye – Supreme Court’s Pronouncement Proves the Judiciary’s Independence

The Supreme Court’s upholding of the Federal Court of Appeal’s ruling of the reinstatement of Dariye as governor of Plateau State based on his unconstitutional impeachment hints at the much-desired independence of the judiciary from the legislative and executive arms of government.

In as much as Dariye has been indicted for the perpetration of ignominious acts, namely embezzlement, money laundering and international bail jumping, the fact that his impeachment was effected by only 8 members of a 24-member house legislature nullifies the process and therefore renders the impeachment void. No matter how strong the evidence is against him, Dariye could only have been constitutionally impeached by a two-third majority of the house, that is, by a vote of at least 16 members of the 24-member house. This however was difficult to achieve, given the choke hold Dariye had on the members of the house by their complicity in the wholesale acts of graft pervading the Plateau State government and compounded by the defection of 14 members from their party (PDP), therefore automatically losing their seats.

As alluded to in previous posts on the NigerianPolity.blogspot.com blog, the right thing to do would have been for INEC to declare the seats of the cross-carpeting legislators vacant and conduct run-off elections to fill them. With the full complement of the house in place, the constitutionality of Dariye’s impeachment would not have arisen.

That Dariye seeks to return for the remaining one month of the term speaks to the depravity of the man and how dearly his sort holds the immunity protection of section 308 of the 1999 constitution as a shield against prosecution. From hiding, hunkered down, Dariye now bleats some cheap rhetoric whose banality is as Rabelaisian as it nauseating against the backdrop of the depth of profanity to which Dariye has plunged the office of Governor and the concept of democracy. Perhaps Fela Anikulapo-Kuti was right in his farcical contrivance of the etymology of the word “Democracy” from the Nigerian Pidgin English phrases – “Dem all Crazy” and “Demonstration of Craze.”

Nigerian Elections – Politics of Thuggery and Chaos

This past couple of weeks has been illuminating for the non-initiate as regards the means and ways of politicking in Nigeria. Ballot boxes snatched, voters and security agents maimed and killed, riotous protests, arson, armed gangs of thugs, soldiers and police using coercion to force people to vote for their benefactors, polling booth officials maimed or killed, and an attempt to blow up INEC headquarters in Abuja. All these are scenes reminiscent of a D-rate Nollywood movie, except it was enacted in real life. One might sooner be safer it seemed, in Kabul, Mogadishu or Faluja.

Nigerian politics has become a do-or-die affair where the only rule of the game is survival of the fittest, regardless of crudeness or brutality. The extent and level of violence that marked the April 14 and April 21 elections is enough to have the elections canceled since they were not in any respect free and fair. The daunting security and logistical issues facing the INEC made the commission inept.

The Atiku Abubakar ruling of the supreme court came only a few days to the election, making it almost impossible to amend the 60 million ballots to include Atiku Abubakar on the list of candidates. In the end the commission settled for a sticker. Also, the hostile nature of communities in opposition strongholds all over the country, particularly in the Niger Delta made it a precarious endeavor for INEC officials to administer elections in these areas (indeed some were reportedly killed). Add to this, the dire transportation situation in Nigeria and what you have is a near impossibility to have the elections commence on time all over the country. There are reports of elections commencing as late as 5:00 PM in certain states and even an extension of voting into the next day, April 22, 2007.

In the end, INEC released a result declaring Yar’Adua as the winner and the elections as free and fair. Yar’Adua probably truly won the elections since the PDP has the largest following in Nigeria. However, the chaotic and violent conduct of the election gnaws at the legitimacy of this victory. If the elections were not free and fair, should the results hold? Some quarters believe it should since all parties were involved in the display of violence and chaos. What thinks you?

Kalu's BBC Interview

Did anyone catch a glimpse of the interview Orji Uzo Kalu gave to the BBC last week? It was a tragic display of the crudeness and lack of finesse that has characterized the Kalu-led government of Abia State. It was full of bombast, an arcane, mislaid arrogance and patent ignorance.

When the anchor man, Allan Little tasked Kalu about the allegations of fraud leveled against him (being on the top 10 list of the EFCC), he claimed he was a very wealthy Nigerian before he became governor. He made a spurious claim of his company, SLOK, employing over 17,000 Nigerians. All investigations by the writer revealed that this is not true. SLOK employed only about 150 people before Kalu became governor according to sources. The way to prove this will be a look at the Nigerian Inland and Revenue Services books to see how may employee tax returns were remitted by SLOK. Kalu's solution for the Niger Delta problem is also half-brained. He does not seem to have a grasp of the problem facing the Niger Delta. He made no attempt to define or put the problem in context before proffering possible solutions.

This interview gives a good depiction of Kalu's standing and grasp of issues. Allan Little asked him about the issue of refuse dumps and heaps taking over the streets of Aba and how the place has been in dire need of sanitation for the past eight years. Kalu said it was not his duty to ensure the refuse dumps were cleared, but that nevertheless, he had this cleared about three months back. Allan Little was befuddled that in the eight years that Kalu had been governor it was only three months back that he had this done. Kalu just shrugged and repeated that it was not his responsibly. It begs the question - "What then is the role of a governor if he cannot provide a clean and sanitary state?"

For a man who is vying to be president Kalu seems to be so preoccupied with self-aggrandizement and embezzlement that he is oblivious of his responsibilities. This means if he is elected president, Nigeria can be a humongous refuse dump for all he cares.

For more on Kalu's kleptocracy see: - The Rape of Abia, a Tell Magazine Report.

Leadership and Economic Prosperity

I was going to write about Leadership and its role in economic prosperity in the third world before I came upon this McKinsey Quarterly interview with Michelle Bachelet, the new Chilean President. Her insights illuminate the role of key government officials in economic development and well being. Her vision of a free market Chile where people are free to pursue their aspirations of wealth creation while assured of security and protection for the vulnerable is one that every African leader should adopt.

Enjoy!...

McKinsey Quarterly

Economic Studies: Productivity & Performance

Interview

Promoting growth and social progress: An interview with the president of Chile

Michelle Bachelet discusses her views on the roots of political upheaval in Latin America, and the link between economic development and the fight against poverty.

Gonzalo Larraguibel and Marcelo Larraguibel

2007 Special Edition: Shaping a new agenda for Latin America

Michelle Bachelet, President of Chile, is one of Latin America’s most prominent leaders. A moderate Socialist who has pledged to combine pursuit of the country’s free-market policies with social measures to narrow the gap between rich and poor, her actions and pronouncements are of special interest to the outside world at a time of turbulent political change elsewhere in the region.

Bachelet’s life and political career have been significantly shaped by Chile’s troubled recent past. Detained and roughed up in 1975—two years after the late General Pinochet came to power in a military coup—she spent a period in exile, first in Australia then in the German Democratic Republic (the former East Germany), before returning to Chile in 1979. Like others on the left, she was active in the battle to restore democracy to the country in the late 1980s.

A trained surgeon who has also studied military strategy, Bachelet first came to national political prominence as health minister in the government of her predecessor Ricardo Lagos, where she initiated an in-depth review of Chile’s health care system. Subsequently appointed the minister of defense, she was credited with reforming the military pension system and modernizing the Chilean armed forces.

One year after her election victory as candidate of Concertación, the center-left coalition that has held power since 1990, President Bachelet faces a range of social and political challenges. The economic outlook appears robust—with GDP growth expected to rebound in 2007—and healthier-than-expected budget revenues last year (fueled by record-high copper prices) have raised hopes for social change. Political preoccupations have included street protests, a forced Cabinet reshuffle just three months into her term, and corruption scandals. On the external front the Bachelet Government has continued Chile’s pursuit of free-trade agreements (FTAs).

In this interview in the Presidential Palace in Santiago, Michelle Bachelet talked with McKinsey principal Gonzalo Larraguibel and McKinsey director Marcelo Larraguibel about the climate for foreign investment, political upheavals elsewhere in Latin America, and the changes needed to make her vision a reality.

The Quarterly: How do you view the rise of populist governments in Latin America and the reduced enthusiasm in some countries for free markets and free trade? And what do you see as Chile’s wider role in the region?

Michelle Bachelet: Latin America is facing an important moment. There have been 12 elections in the past year, all of them democratic, which represents a wonderful success and development of the regional political system. At the same time, economic and social indicators for the region are improving. However, there are countries where people are uneasy about the process of economic liberalization, because structural economic reforms were not accompanied by the social policies that were necessary. Therefore, many people in the region have been disappointed and are looking to see what else can be done.

The problem has not been with open economies per se but rather the lack of action in addressing poverty and social injustice. Chile has had its own experience—combining political stability, sound macroeconomic policies, and social cohesion—and we believe you cannot have one without considering the other.

When you ask about the role of Chile, it has been to share our experiences with our counterparts in Latin America. Many other leaders have been interested to know more about the experience of Chile. For example, we have brought together businesspeople from different countries and have tried to support countries that are interested in the skills our teams have acquired in negotiating FTAs. We have 54 of them, after all, giving us access to markets of 3 billion people throughout the world. We talk to colleagues about the complementary benefits these agreements can bring.

The Quarterly: Do you think other countries could give the region a bad name with their recent actions?

Michelle Bachelet: Every country has the self-determination and sovereignty to decide on their economic policies, and I would never speak about what others have done. I think that the best thing I can do is support them, continue to work with them, and be available to help.

Like any group of countries such as the European Union, Latin America has many different political, historical, and economic situations. We have been working on a South American Community, and some people even talk about a common currency. Looking at the EU, that would be a wonderful future goal. But today we have diverse countries, some with high external debt, others with low, some with very open economies, others less open. I still believe in integration, and there are working groups across the continent studying how to better connect our infrastructure and other topics such as social protection, energy, and education.

The Quarterly: What is your vision of the sort of country you would like Chile to become in ten years?

Michelle Bachelet: I would love Chile to be regarded as a modern society with a modern system of social protection and an open economy, both regionally and internationally, and also to be seen as a player on the world stage. Not, of course, in the sense of throwing its weight around, but rather as a contributor to the task of global development. We want Chile to be a country where you can find all the conditions needed to create wealth and innovate, but at the same time one that protects the vulnerable and looks after those with liabilities or those who started too far behind to benefit from the opportunities and possibilities we have here.

Over the past 16 years we have emerged from a difficult history to build a country that has political stability, economic stability, and social cohesion. In addition to social justice, everything we do is intended to promote a better quality of life and greater dignity for our people. You cannot have winners and losers—everyone has to win.

The Quarterly: It’s been almost a year since you were sworn in as President. What achievements from the past 12 months have you been most proud of?

Michelle Bachelet: I think the Chilean people clearly perceive the distinctiveness of our administration—democratic strengthening, economic growth, and social protection—which is very much in the spirit of the Concertación de Partidos por la Democracia. In our opinion, there is no incompatibility between growth and a more equal distribution of wealth. Indeed, we are convinced there is a virtuous relationship between the two. International experience shows that extreme inequality is not just unfair and a source of social tension but also reduces the dynamism of the economy. Countries lose the main motor of growth—the capacity to innovate and to take risks—and populism arises.

Concrete policies in the first year have included bills for the protection of children, reform of the pension system, educational reform, new ways to encourage entrepreneurship, and a new approach to housing that not only focuses on construction but also incorporates security, health care, and child care. In the first year we have doubled the number of public nurseries and child care facilities, which had not changed much in 30 years. We have to fight inequality from the very beginning of people’s lives, and this initiative also creates better conditions for women to take jobs. The challenge we have is to enable everyone to respond to the opportunities provided by globalization, which are increasing constantly.

Another positive aspect is that in 2006 we ratified and enacted our free-trade agreement with China—now our second-biggest commercial partner, after the United States—as well as our Trans-Pacific Strategic Economic Partnership with New Zealand, Brunei Darussalam, and Singapore. We successfully negotiated the same type of agreement with Japan. We also signed two additional free-trade agreements with Colombia and Peru and opened negotiations with Malaysia.

The Quarterly: Can you tell us more about the important levers that will turn your medium- and long-term vision into a reality?

Michelle Bachelet: Equal opportunities from the beginning would be one slogan, and education is the main issue here. We need to move from where we are now—with everyone guaranteed an education under the constitution—to the point where everybody gets an education of excellent quality. This is not just a matter of social justice; education is a vital economic agent. More still has to happen on coverage—notably for the 9th through 12th grades and kindergarten, where only 90 percent of children attend. We have specific goals for each age group. The same goes for higher education: about 650,000 people attend universities and colleges today, compared with about 77,000 in my day, but to develop innovation in science and technology we need to double that number. We have a particular problem in Chile because of the shortage of people with technical qualifications: in most countries the ratio is ten technical graduates for each professional. Here things are the other way round.

Education is also fundamental in attracting foreign investment, particularly in the regions of the country where we do not always have enough people with the necessary skills.

The Quarterly: It’s the reform of the pension system, though, that has probably attracted the most outside attention. How will that evolve?

Michelle Bachelet: Twenty-six years ago, we made some important reforms, as you say, that have been copied in other places. The old system, based on fixed compensation, also known as a defined benefit, was replaced by an individual capitalization system, or defined contribution, and managed by private entities.

That has brought several benefits for Chile, but we now realize that there were some significant gaps. We therefore need to find ways to make the pensions industry more competitive and transparent, introduce proper incentives to foster individual and collective savings, and ensure that every citizen receives a reasonable pension. The latest reforms represent a new architecture of benefits based on the integration of these three pillars. What people did not foresee in 1981 was the way people now move between jobs, perhaps only spending nine months in one place, with a period of unemployment in between. Women have been discriminated against, and young people do not think ahead as much and have made fewer contributions. A lot of the original assumptions proved overly optimistic. It was thought that the replacement rate—the amount of pension as a proportion of final salary—would be 80 to 85 percent, but it has turned out to be much lower: 51 percent for men, less than 30 percent for women.

The Quarterly: What are your other plans to improve the competitiveness of the Chilean economy?

Michelle Bachelet: One key area is innovation, around which we are developing tax incentives to encourage more industry participation. By OECD1 standards the 0.7 percent of GDP that Chile invests in research and development for science and technology is not only low, but over two-thirds of it comes out of public expenditure. The private sector contributes very little. Our aim is to get industry more closely involved with universities, science centers, and biotechnology research centers so we can add more value to our products. Our economy is very dependent on natural resources—copper, pulp and paper, and the fishing industry represent 54 percent of exports—and we need to do more than just produce more of them.

There are some encouraging signs. I recently saw how Codelco, the state-owned copper business, has been developing advanced techniques to produce copper in a more environmentally sustainable way. The salmon-farming industry is creating new vaccines and special medicines for this species. Similar developments are happening with mining supplies and through genetic engineering in forestry. The wine industry is looking to develop premium bottles. And we are also targeting agribusiness and tourism, which has great potential given our beautiful geography, highway infrastructure, and safety record.

In all this we see business clusters as a key mode of innovation, along with increased collaboration between the public and private sectors. We are also prioritizing small and medium-sized businesses, and we are considering a range of other initiatives, including a simplification of the tax system that has just passed through the Senate. These businesses account for 70 to 80 percent of employment here, but we can do much more: if you look at Sweden and other European countries, the export capability of these enterprises is much higher. Medium-sized businesses, for instance, are responsible for 50 percent of exports there, whereas ours account for only 3 percent of the total.

The Quarterly: What is your view of further privatization in Chile? For example, would you consider the privatization of minority stakes in state companies?

Michelle Bachelet: My government is not contemplating new privatizations, among other reasons because state-owned companies such as Codelco have demonstrated that they already function very well. What we want is to improve corporate governance in public companies—their transparency, management, professionalism, and the value they add for their owners, the people of Chile.

The Quarterly: What is your view of public-private partnerships in Chile for the development of areas such as infrastructure?

Michelle Bachelet: Public-private partnerships have been fundamental in the improvement of roads, ports, and airports. The mechanism of concessions2 to the private sector not only has allowed more funds to be invested in public assets, thereby improving the country’s integration and competitiveness, but has also been used to redirect limited public financing to activities with a high social impact. These are generally not profitable if one does not take that social impact into account. Concessions have also redefined the way in which public institutions work and think, allowing them to focus not only on the production of goods and services but also on their wider purpose to serve the needs of citizens. For the period of 2007 to 2010 we aim to invest more than $2.2 billion in concessioned infrastructure.

The Quarterly: That brings us to your own leadership style, notably in Chile. Do you think you bring a different perspective to change than what the country has experienced in the past?

Michelle Bachelet: It’s always difficult to say if some attributes are gender linked or more personal to women and men. I know women who are very hard, who act like a man and tell you, “If you don’t act like a man, you are dead.” Equally, I know men who share my style. I have made a conscious choice that I will pursue a leadership style that can be strong and authoritative but can retain “womanly” attributes, if you will. That is why I push for social dialogue, because I think the best thing for the economy and the people is for everyone—owners, managers, and workers—to sit down and see how we can move forward together.

When developing the latest pension system reform, for example, I set up a commission of intellectuals and practical people—those with know-how and different political perspectives. Many people laughed and said it was because I was unable to make decisions. They were completely wrong. The same thing has been done with education and childhood reforms. In both cases there has been wonderful work that has enabled the government to make decisions based on all points of view. I admire Denmark’s permanently standing Globalization Council, which consists of groups representing different parts of society, seeing how they can improve competitiveness and address social and human-capital challenges. Ultimately, this way of working results in better and quicker decisions. It is also important here because the issues we are discussing are not just for a one-term government to decide. Political parties and representative democracy are very important, but they are not enough. We have to move further.

The Quarterly: Finally, what is your message to foreign investors and CEOs looking at Chile and the region?

Michelle Bachelet: Trust Chile, believe in Chile, and invest here. It is a stable, fairly low-risk country, and we have developed serious and responsible policies. We will continue along the path Chileans have chosen democratically. Although we have done it well for the past 16 years, we are ready to make a new leap forward.

An example of responsibility is the two external funds created in response to the structural budget surplus caused by high copper prices. One is to finance the new pension system, since we know that the ratio of retired people to the productive sector is going to get bigger over the next ten years. The other fund, based on the Norwegian model, is to separate social benefits from the ups and downs of the economic cycle.

We are working on greater transparency and consistency in applying rules to local investors. We are also working very hard to get rid of any corruption—we are aware that one rotten apple can destroy the whole crop, but I do not think corruption is part of the Chilean way.

We are optimistic about the next year and probably the next two. We are working hard to ensure sustainable growth that will get us back to the normalized level of economic growth that we have had for many years.

About the Authors: -

Gonzalo Larraguibel is a principal and Marcelo Larraguibel is a director in McKinsey’s Santiago office.

Notes

1 Organisation for Economic Co-operation and Development.

2 The law on concessions permits the government to grant private companies the right to invest in, construct, and exploit, for an agreed period of time, projects that would otherwise have to be financed and managed by the public sector. So far, these projects have included airports, dams, hospitals, jails, ports, and roads.

Copyright © 1992-2007 McKinsey & Company, Inc.

Atiku’s Quixotic Breakfast Meeting.

The vice president, Abubakar Atiku, in a breakfast meeting/interview with journalists last Saturday in Kano made a pronouncement that he has been out of the loop in the Obasanjo led government for the past three years. He claimed not to be in the know of what entails in the government as regards how decisions are reached and executed by the president, the ministers and parastatals. He went on to make what appears to have been an attempt at a "half-wit" joke, something about how only a woman can force Obasanjo to do anything, making reference to an alleged ill-spent $500 million to revamp the National Electric Power Authority (NEPA) in the first two years of the Obasanjo/Atiku administration.

If Atiku has been coasting idly in the Obasanjo led government, it means he has not been adding value. If this is the case, why has he allowed the Nigerian government to waste so much resources (the retinue of advisers, aides, presidential jets and other expensive perquisites run the Nigerian government in excess of $10 million per annum) to keep his self-confessed "useless" office? Would these resources not have been better spent to provide health care and education for the masses rather than on the up keep of an idle politician whose constant antagonism and cavil against his boss is nothing but a negative externality?

What any respectable person that has been thrust in an idle situation, such as the one to which the vice president alludes, would do is resign to pursue a more useful endeavor. But in spite of the “joblessness” Atiku claims to have found himself, he choses to remain put, perhaps to enjoy the perks of the office. The idle mind, the saying goes, is the devil’s playground. It seems the devil found in Atiku’s idle mind one hell of a playground! It may have been the devil who pushed Atiku to mismanage and embezzle the Petroleum Technology Development Fund (PTDF) monies, be engaged in the iGate bribery scandal, the Marine Float, Globacom and ETB shady deals for which he has been indicted by the Economic and Financial Crimes Commission (EFCC).

His mind, still seized by the devil, is causing Atiku to make a mockery of the office of the vice president and the Nigerian democratic process. Atiku has found a calling in justifying his disgraceful and quixotic conduct by his putative rejection of the “third term agenda” of last year. Many prominent politicians rejected the third term more vigorously than did Atiku, among who are the current senate president and his counterpart, the house speaker. These politicians have not been persecuted in any manner, as Atiku claims he is, for their objection of the third term proposal. The truth be told - Atiku continues to hold on to the office of the VP because his resignation would strip him of the immunity conferred on him by the office and therefore leave him open to prosecution for the acts of fraud of which he has been indicted. His quest for the presidency is in order to extend this immunity protection and be availed of the power to quash the stellar EFCC and its chairman, Nuhu Ribadu, who he holds personally responsible for his (Atiku’s) indictment.

Niger Delta Malignant Militancy

The spate of attacks and brazenness of the Niger Delta militant groups is escalating rapidly and getting out of hand. Like a malignancy, these militant groups are wreaking havoc on economic activity, safety and wellbeing in the Niger Delta. The situation in Rivers State is perhaps the most dire. Over the last few weeks, there have been the murder of about a dozen traditional chiefs and three expatriates, the kidnapping of Chinese, Korean and other expatriates of other nationalities - workers of telecommunication and other industries unrelated to the oil industry, a jailbreak and a few car bomb explosions. Port Harcourt may very well be Mogadishu or Baghdad.

While this utter breakdown of law and order is running wild, the governor of River State, the President of Nigeria and other officials whose business it is to secure the oil city are busy attending to political intrigues and scheming in a bid to entrench their protégés in power and protect their debauched interests after they leave office on May 29, 2007. Nigerian oil production in the second half of 2006 was reduced by as much as 600,000 barrels a day, resulting in a loss of over $4.4 billion in revenue (2.3% of the national GDP) due to disruption in oil production as a result of the activities of these militant groups.

If nothing is done to stem this wave of banditry and terrorism, and the phenomenon is allowed to take root, Nigeria toys with a situation where these militias would be in control of fractious enclaves in the Niger Delta. Anarchy will prevail; lawlessness, mayhem, gang wars and terrorism will be the order of the day, making the region ungovernable. There is no telling what debilitating effect this would have on economic activities in the region. The decay of other developmental indices that follow will be unfathomable. Without security, no one, expatriate or indigenous, would feel safe to conduct business in the Niger Delta; without economic activities, there will be poverty, illiteracy, diseases, socio-cultural decay and increased crime rate. The Niger Delta will find itself in a death spiral, and life in the region will be akin to what obtains in the lawless militia-controlled regions of the world of the likes of Kabul, Darfur, Baghdad and Gaza.

What needs to be done without delay is for the security forces, specifically the military, to be deployed to combat this unwholesome phenomenon. This means that the Nigerian government needs to allocate more than the measly $1.5 billion it budgeted to the military in 2006. Like cancer, the Niger Delta militancy needs to be attended with urgent radical treatment else it will metastasize and overwhelm the country, and Nigeria may soon find itself immersed in another civil war, only this time, several times more deadly than Biafra.

Adedibu’s Mobocracy

Over the past two decades most, if not all the political upheavals of the ancient town of Ibadan have been allegedly instigated or fomented by Adedibu. In a style reminiscent of Busari Adelakun (Eru obodo) the NPN mystical warlock strongman of Ibadan politics in the second republic, Adedibu's power comes from the grassroots through thuggery, coercion, bribery and organization of the many fractious sects of Oyo politics into an unwieldy but nevertheless awkwardly cohesive mobocracy. Lamidi Adedibu, the self-styled political strongman and linchpin of the "keg of gun powder" that is Ibadan politics has once again overreached his liberties by his comportment in recent weeks.

Last week, his associates were arrested in Ogbomosho South Local Government of Oyo State for the illegal diversion and possession of two Direct Data Capture (DDC) machines belonging to the Independent National Electoral Commission (INEC). The machines were being used for the illegal multiple registration of voters, a crime that appears to be rampant amongst desperate politicians in the ongoing voter registration across the country. Not only was Adedibu implicated in the illegal multiple voter registration scheme by his associates, last week, he was also involved in the assault of Senator Lekan Balogun and his State Security Service (SSS) details resulting in the mugging and robbery of a service pistol from one of the SSS officers.

It is bewildering that the state director of the SSS, Mr. Raymond Nkidirim has only issued an ultimatum to Adedibu to return the gun along with a written apology or face arrest if he failed to comply. The questions that arise are (a) were crimes committed in the two incidents? (b) is Adedibu in complicity? If the answer to both questions in either incident is yes then Adedibu should be arrested and prosecuted forthwith like any other perpetrator. It appears Mr. Nkidirim’s threat is half-hearted. The SSS has never been known to forewarn perpetrators before arrest. If it really seeks to uphold professional ethics and not double standard, the SSS should arrest Adedibu without delay and stop issuing empty threats.

Atiku Returns Next Sunday with “FBI” Guards? I Think Not.

An article titled “Atiku Seeks FBI Aid to Return Home” by The Daily Sun Washington DC correspondent, Ike Nnamdi, dated Wednesday, January 17, 2007, reports that the Vice President, Abubakar Atiku, who is rumored to be returning to Nigeria next Sunday, January the 21st will be doing so in the accompaniment of FBI agents as body guards. The reporter cites the reason as the VP’s lack of confidence in the Nigerian security agencies to secure his safety upon his return in light of recent developments as regards his cross-carpeting from the PDP to AC and his subsequent expulsion from the ruling PDP and eventual withdrawal of his privileges by President Obasanjo, who deemed Atiku’s adoption of AC as tantamount to resignation from his post as the VP.

The veracity of this report is questionable, particularly since the law setting up the FBI limits its jurisdiction strictly to within the USA, except in extenuating circumstances when the agency is investigating an international crime that violates US criminal laws, and even then, only in collaboration with the Interpol and the law enforcement agencies of the host country. The FBI collaborated with the EFCC in the investigation into the iGate bribery scandal involving the Louisiana Democrat Congressman, William Jefferson and associates and the complicity of Atiku in this deal, which eventually opened up the floodgates of the Petroleum Development Trust Fund (PDTF) fraud that has embroiled the VP, Fasawe, Adenuga and associates since last year.

It is highly improbable that the Nigerian government would permit the FBI to operate in Nigeria solely in order to protect the VP who has been implicated in its own investigation of William Jefferson. In the USA, guarding public officials or witnesses under the witness protection program is a preserve of the Secret Service and not the FBI, whose primary brief is to investigate criminals that violate US laws.

The only plausible reason why the FBI may accompany Abubakar Atiku to Nigeria (and this they can do only with the permission of the Nigerian government) is if Atiku has made a deal to be a key witness in the iGate bribery case in exchange for some amnesty, and the FBI visit is to secure certain documentation or evidence that would assist in the prosecution of the primary suspects. Anything other than this is indicative that Mr. Ike Nnamdi is either concocting a tale to sell his paper or has been sold a mickey by his sources.

Nigerian Census – Gender Population Distribution Shift, a Red Flag

Many have commented on the figures of the March 2006 National census, which puts the Nigerian population at 140 million. Comparing this with the November, 1991 figure of 88.992 million, this is a growth rate of about 3.07% per annum, which approximates the estimates that have been put forward by various statistical models. What is however intriguing is the population distribution along gender lines. In 1991, males accounted for 50.04% and females 49.96% of the population (a male/female ratio of 1.001). The distribution in 2006 has males accounting for 51.21% and females, 48.79% (a male/female ratio of 1.050).

This shift in population distribution raises a red flag. Several questions come to mind as to what may be responsible for this gender distribution shift. Could it be cultural, social, biological, economic or man-made? Are more male children being born than are female ones, or are more females dying at a faster rate than are males? Or were there cultural issues that limited the accessibility of females to census enumerators 2006 more than in 1991? Could it be that the ravages of HIV/AIDS is taking a toll on the female population, especially since females have a higher susceptibility to the disease? Using the 1991 census figures from the Federal Office of Statistics (FOS) for statistical analysis to help answer these questions the following are the three most striking findings: -

• The November 1991 census showed that 72.27% of the entire population was made up of 29 year-olds and younger
• Of these, about 51.74% (or 36.67% of the entire Nigerian population) were females and 49.26% (or 35.6% of the entire Nigerian population) were males
• The population growth rate for males in Nigeria between 1991 and 2006 was 3.23% versus 2.90% for females
  

While various political dissenters have raised allegations of fraud as regards the validity of the census figures, equally important, perhaps even more so, is an investigation into the cause of the gender distribution (sex ratio) shift. Although this shift appears not to be statistically significant at the international accepted 95% confidence interval, however, it is important to know if females have a higher death rate as a result of violence, diseases or some female-specific morbidity, or if there is a lower birthrate for females. If either of these two scenarios is not the case, then why were fewer females counted in the last census?

Open Letter to President Obasanjo (Part 2)

Dear OBJ,

Happy New Year! One year ago, I wrote you to thank you for your achievements in 2005, namely the Paris Club Debt forgiveness, EFCC successes amongst other issues. I also beseeched you to make a definitive statement that you would not be seeking a 3rd term in the wake of all the politicking and lobbying for a third term. Even though you had variously hinted that you were not interested in a third term, saying that you would be returning to Otta come May 29, 2007, your actions suggested otherwise, particularly as you were reported as having said that you would make your decision whether to run or not for a third term after the senate had decided on the bill. Last May, the senate threw out the bill and effectively made the decision for you.

The year 2006 was a successful one for Nigeria under your leadership. Not only did Nigeria fully liquidate its Paris Club debt, but the record high crude oil prices saw her foreign reserve rise up in excess of $40billion, the highest ever in Nigeria’s history. Also, your fight against corruption ,spear-headed by the EFCC made far-reaching strides with the successful investigation, indictment and prosecution of several high ranking federal and state government officials. These activities culminated in the investigation and indictment of your Vice President, Abubakar Atiku, for financial impropriety with the Petroleum Development Trust Fund (PDTF), but who enjoys the protection of section 308 of the constitution, is yet to be arrested and charged. As a fall out of this, there are accusations and recriminations by the VP and his sympathizers that he is being targeted for opposing your third term ambition.

OBJ, as you know, this is expected of the typical Nigerian politician, who would do anything to hold on to power even after he has been caught with his pants down. Compounding Atiku’s problem is his defection to a rival party, his eventual expulsion from the Peoples Democratic Party and your declaration of his office as vacant just over a week ago. Were he an honorable man, Atiku would have resigned his position as VP before defecting to the Action Congress (AC) as its presidential ticket bearer. But it appears he is not. OBJ, my advice to you on this is to follow the dictates of the constitution. It is more likely than not that the Atiku issue would be visited by the senate and house of assembly after the holidays. Let the legislators decide if the code of conduct committee’s and the EFCC investigation reports, as well as the VPs defection to AC are enough grounds for impeachment. In the meantime, the mature thing to do is to reinstate the VPs privileges, that way you will be seen as being fair and without prejudice.

Another topical issue, which you should address seriously, is the militancy in the Niger Delta. There are definitely legitimate environmental degradation and economic disruption issues in the region that need to be addressed with the utmost urgency, but these do not justify the lawlessness, murder and anarchy perpetrated by militant groups. The wave and frequency of violence and abductions seem to be escalating with every passing day. OBJ, I know you have been treading softly here, not wanting to use the kind of force the Nigerian military is capable of for want of a repeat of Oddi. While this stance seeks to be politically correct, it places little value on the lives of the men and women of the Nigerian police and armed forces and innocent bystanders who have been murdered or maimed by the militants in their attacks. In addition, Nigeria looses untold tens of millions of dollars daily with the resulting disruption in crude oil production activities; up to 500,000 barrels a day in the last few attacks.

OBJ, your reticence and inaction embolden these militants, who construe your "pacifist" posture as weakness and a tacit acceptance of defeat. My advice, Mr. President is that you go at this issue with all the armament in your arsenal – Niger Delta development programs, youth enlightenment, negotiation, military incursion, intelligence gathering, arrests, prosecution and incarceration should all be used to address this problem. Since the militants have resorted to arms, it is only proper that you return the favor with a stronger and mightier force as a signal that you are in full control of the sovereignty of Nigeria and would not tolerate lawlessness. A well-trained, adequately-kited and properly equipped force of 7,500 to 10,000 troops should be able to secure the Niger Delta. With a strong and effective military presence, the militants would be forced to abandon their tactics of mayhem, murder and kidnapping and seek to negotiate peace, and then you will be negotiating from a position of strength, backed by your credible threat of military incursion. It is important that you achieve this with speed, precision and a well managed and transparent press coverage, exposing the nefarious activities of these militants for what they truly are, and not leave any room for a situation where they are seen as folk heroes by propaganda and misinformation.

Your remaining five months in office, OBJ, should be used to consolidate all the good that your administration has entrenched. You should be laying the grounds for improvement and development in other areas of the economy and social amenities, namely education, health care, security/crime-fighting, power generation, roads, housing and other social infrastructure. While economists argue that privatization and commercialization are the way to go, these are often accompanied by pristine and impeccably administered regulatory, policing and judiciary institutions in the advanced economies of the world where these work. OBJ, you have spent the second half of your administration trying to achieve this and would do well if you spend the remainder of your time in office mapping out a blue print from which your successor can continue the pursuit of these noble objectives.