In today’s BBC News Africa, there is an interesting article about the economic crisis in ZImbabwe and its ultimate impact it will have on the Mugabe government. It points out that with the inflation rate in Zimbabwe at 15 Million percent, 256 Billion Zimbabwe dollars gets you a loaf of bread. Zillionaires are starving in Zimbabwe!

I am reminded of the story about Al Capone, the American mobster who was pursued by the authorities for years for his crimes. What eventually did Capone in was tax fraud, an economic crime, not the flashy stuff of criminal masterminds. The parallel to Robert Mugabe is important. While the public and government leaders around the world wail about the sham elections, human rights abuse, et cetera, what will likely do Mugabe in will be his gross abuse of the economy. His henchmen (the army and police forces) are facing the same crisis as ordinary Zimbabweans. Supporters of all kinds of the ZANU PF can’t sustain their political zeal when they can’t buy a quart of milk for anything less than 500 Billion dollars.

The only remaining thread of hope for the elite in power is the stolen proceeds that can sustain them. If economic sanctions close off this last source of revenue and the regime is allowed to exit somewhat intact, then there is some hope for a post-Mugabe era in Zimbabwe.

Afghanistan, touted by the Bush Administration as a country in transit from a totalitarian religio-fascist regime to a U.S. styled democracy, remains dramaticly behind the curve in its human rights record as well as with regard to its measures of governance.

Background

Afghanistan is an Islamic republic with a population of approximately 30 million. Citizens elected Hamid Karzai president in October 2004 in the country’s first presidential election under its January 2004 constitution. The September 2005 parliamentary elections–the first in more than three decades–did not fully meet international standards for free and fair elections, but citizens perceived the outcomes as acceptable, and the elections established the basis for democratic development at the federal and local levels.[1. U.S. State Department Human Rights Report - Afghanistan 2008]

Political History

Ahmad Shah Durrani unified the Pashtun tribes and founded Afghanistan in 1747. The country served as a buffer between the British and Russian empires until it won independence from notional British control in 1919. A brief experiment in democracy ended in a 1973 coup and a 1978 Communist counter-coup.

The Soviet Union invaded in 1979 to support the tottering Afghan Communist regime, touching off a long and destructive war. The USSR withdrew in 1989 under relentless pressure by internationally supported anti-Communist mujahedin rebels. Subsequently, a series of civil wars saw Kabul finally fall in 1996 to the Taliban, a hardline Pakistani-sponsored movement that emerged in 1994 to end the country’s civil war and anarchy.

Following the 11 September 2001 terrorist attacks in New York City, a US, Allied, and anti-Taliban Northern Alliance military action toppled the Taliban for sheltering Osama BIN LADIN. The UN-sponsored Bonn Conference in 2001 established a process for political reconstruction that included the adoption of a new constitution and a presidential election in 2004, and National Assembly elections in 2005. On 7 December 2004, Hamid KARZAI became the first democratically elected president of Afghanistan. The National Assembly was inaugurated on 19 December 2005.

Governance Measures

Perhaps the most notable measure contained in the World Bank Institute’s Global Governance Indicators is the measure of Afghanistan’s rule of law. Approaching a -2.5, the country rates as one of the lowest xcountries on this measure in the world. Despite $billions spent in the country since 2002 to remove the Taliban and to create a “democracy,” it is obvious, at least by this measure, that the country seriously lags in this respect.

In addition, control of corruption in Afghanistan remains a huge problem. A reange of factors contribute to this problem, including the pernicious opium trafficing, U.S. military incompetence and global economic aid misapplication.

In a part of the world where governance is hugely problematic, it is tragic that Afghanistan lags so badly.

Human Rights

The country’s human rights record remained poor due to a deadly insurgency, weak governmental and traditional institutions, corruption, drug trafficking, and the country’s legacy of two-and-a-half decades of conflict. Human rights problems continued, including extrajudicial killings; torture; poor prison conditions; official impunity; prolonged pretrial detention; increased restrictions on freedom of press; restrictions on freedoms of religion, movement, and association; violence and societal discrimination against women, religious converts, and minorities; trafficking in persons; abuse of worker rights; and child labor. While civilian authorities generally maintained effective control of the security forces, there were instances in which members of the security forces acted independently of government authority.

While the government deepened its authority in provincial centers, the Taliban or factions operating outside government authority controlled some areas. During the year more than 6,500 persons died as a result of the insurgency, including by suicide attacks, roadside bombs, and gun assassinations, in contrast to 2006, when more than 1,400 individuals died. The overwhelming majority of the casualties were insurgent fighters killed in combat. The Taliban and antigovernment elements continued to threaten, rob, attack, and kill villagers, government officials, foreigners, and nongovernmental organization (NGO) workers. The Taliban increasingly attacked civilian and international targets using the tools of terrorism, including targeted suicide bombings, automatically and remotely detonated bombs and landmines, and the use of civilians as shields. Also during the year, the number of NGO representatives who were threatened and kidnapped increased significantly. The instability caused by the continuing insurgency and the difficult operating environment caused by the Taliban’s strategy of targeting government offices and workers contributed to weaknesses in government institutions.

The government continued to develop and professionalize its army and police force. Increased oversight of police by internal and external monitors helped to prevent abuses, and human rights training became a regular element for police and army personnel. The Ministry of Interior (MOI) continued rank and pay reform efforts and removed officers involved in human rights violations and high-level corruption. International human rights groups stated that extensive reporting of human rights abuses led to increased arrests and prosecutions of abusers.

Reuters reported Firday that the U.S. Treasury Department moved to freeze assets of 17 business enterprises controlled by the Zimbabwean government. The Treasury Department’s decision was driven by the companies’ support of President Robert Mugabe’s regime.

The Treasury said it is banning Americans from doing business with the entities, which include the Agricultural Development Bank of Zimbabwe and producers of minerals, steel, textiles, chemicals and other services.

The action seeks to freeze any assets that the entities have under U.S. jurisdiction.

BAE Systems Announces New Ethical Standards for Business Conduct

Last Tuesday, BAE Systems announced that it has adopted all 23 recommendations from the Woolf Committee, which was established in the wake of a corruption scandal at the company. As noted by GIW earlier this year, the committee, which was asked to examine the ethical principles and practices underlying the company’s business, identified various areas for further improvement that the Company should address in its business operations.

Dick Olver, Chairman of BAE Systems said, “This programme is of fundamental importance to how we do business now and in the future and it will derive benefits for our shareholders, employees and customers. We believe the Woolf Report provides valuable insight and observations that BAE Systems, the defence industry and all global companies can learn from.”

Commissions or Bribes? The £32M Question

Earlier this year, the Serious Frauds Office (SFO) in the U.K. interviewed several executives about their roles in the payment of commissions to sales agents going back to the 1980s. They pointed to Mike Turner, BAE CEO, as the person who authorised the payments. It is understood the SFO was concerned about a lack of documentation to show where sales commission payments of up to £32m a time actually went.

The company has maintained the commissions paid are legal, legitimate and not bribes and believes Turner is being unfairly targeted.

It has also been reported that BAE kept documents detailing the payment of commissions outside the UK in the city of Zurich. When the SFO asked BAE why they were kept there, the company responded it was because they were worried arms trade activists could seize them if they were on UK soil. The SFO had focused on arms sales in Romania, Czech Republic, South Africa, and Tanzania.

The implementation programme will be managed by a programme director and will focus on several areas:

1. Changes to and the monitoring of application of policies and procedures;
2. Revised training needs and the subsequent delivery of training programmes;
3. A programme to consult and communicate with stakeholders on the Company’s plans;
4. Communication and engagement with 97,500 employees.

The full implementation programme will be rolled out over three years. A Steering Committee, comprising senior executives globally from across the business and reporting to the Executive Committee, has been established with responsibility for providing oversight of the implementation programme. The Committee met earlier this month. In addition, six Working Groups comprising senior managers and functional experts have been established covering specific areas such as the global code of conduct and leadership in business ethics. These Working Groups will address between them all the recommendations contained in the
report said company spokespeople.

CEO Turner’s last few years at Britain’s biggest defence contractor have been blighted by the SFO probe. A leaked SFO document published by a South African newspaper last year named Turner and BAE’s former chairman Sir Dick Evans as suspects in the inquiry. The document, which was a request for assistance from the SFO to the South African authorities, said there was “reasonable cause” to believe Turner, Evans and the company were guilty of corruption.

It has been reported today that Wal-Mart has agreed to contract terms with two “labor unions” in China. This speaks volumes about both the cynical labor relations policies of the largest U.S. based retailer and the status of labor rights in the People’s Republic of China.

It was noted in the Financial Times today “[t]he agreements reached with government-approved unions in Shenyang and Quanzhou come less than two years after the official All China Federation of Trade Unions (ACFTU) launched a high-profile campaign to organise workers and mark a new chapter in the development of the China’s labour movement.”

That’s nice, a real struggle for workers rights. So, what did these unions secure for their employees?

Well, the home run here is an 8% increase in wages this year and next. This sounds good at first glance but note two important facts: (1) Wal-Mart employees (non-union employees) in the U.S. see an average 12% increase in their wages; (2) The average wage for workers based in Shenyang, where these Wal-Mart stores are located, average US$102 per month.

I suppose that any improvement in the lives of workers should be applauded and efforts by unions, regardless of their domination by their government, should be encouraged. But, and this is a big “but,” the fact that any union is controlled by its government is abhorrent. As commentators and trade unionists suggest, this is a step in the right direction for unions in China. However, to what extent will the PRC government allow for such continued success by some entity smelling of a “social movement”? Only time will tell.