What Moscow Could Learn from History

After college, a friend of mine, who had studied the Russian language, traveled to Moscow. When she visited again fifty years later, she raved about the changes and couldn't wait to show me photos of modern life there. What seems to be happening in Russia today is a grim throwback to yesteryear from which students who wonder why they should study history, as well as world leaders, can learn.

     Russian President, Vladimir Putin, and his oligarchs, who have accumulated great wealth, are a new monarchy that thrives on corruption. Rather than recognize how corruption undermines public support for a government, as China has by prosecuting officials who use their positions for private gain, Moscow has revived a climate of fear and terror to keep its population in check. Dare to confront government lies, as Anna Politkovskaya and Boris Nemtsov did, and you are assassinated. Run Open Russia, an online video operation that informs scattered dissidents of opposition protests, and you suddenly collapse in your office, possibly from poisoning. Blog criticism of the regime and your younger brother, Oleg Navalny, is sentenced to three and a half years in a Russian penal colony. Return from doing Putin's dirty work fighting in Ukraine, and your weapons are confiscated at the border. How long can Moscow keep a lid on a public upheaval? Nicholas II thought, forever.

     By just looking at a map, a young student would expect the vast expanse of Russia to be an economic power house compared to the islands of Japan. Instead, falling oil prices have exposed Russia's less diversified economy which contracted 3.7% in 2015. Oil prices that were expected to improve after an OPEC meeting failed to materialize and remain below $50 a barrel in 2017. When countries, such as Russia and North Korea, focus exclusively on the military, space, and cyber technology, the rest of the economy suffers. Destroy their military and what would they have left to make them a great power? Once Japan and Germany were defeated in World War II, these countries did not make this mistake.

    With nationalism pinned to advanced military weaponry, Moscow has flexed its non-economic strength and expansionary vision in Georgia, Ukraine and now Syria. TIME magazine in October, 2016 recalled the 2013 manifesto of the chief of the Russian general staff, Valery Gerasimov, who wrote, "A perfectly thriving state can, in a matter of months and even days, be transformed into an arena of fierce armed conflict through political, economic, informational, humanitarian and other nonmilitary measures applied in coordination with the protest potential of the population." Apparently Putin assumes such attacks can be directed only from Russia rather than toward Russia as well. In any case, military demonstrations of power and cyber attacks do nothing to correct Moscow's biggest problem, a failing economy. Sanctions imposed on Russia after its Crimea takeover and low oil prices continue.

     Migrants have fled Syria the way Russians abandoned ground when Napoleon's army marched on Moscow in 1812. To the victor will belong a shell of Syria or the realization that two hundred years later a country's power rests, not only on military strength, but on a strong diversified economy and an ability to negotiate a just and lasting peace in the world.

      To this latter end,  U.S. President Barack Obama and Russian President Putin agreed to meet at the UN on September 28, 2015. Putin expressed a willingness to discuss a joint effort to remove the threat of ISIS in Syria but then sent fighter planes to prop up Syria's regime by bombing rebels attacking a government that has killed, rather than listened to, protesters. However, once Putin determined ISIS had brought down Russian Flight 9268 over the Sinai peninsula in October, 2015, he pivoted to join the US and France to launch a major attack on terrorist forces. However, Moscow again returned to military support for the Syrian government. In August, 2016, Tehran showed its displeasure, when Moscow bragged about using bases in Iran to bomb Syria, by canceling an agreement permitting such raids. After Russia destroyed a convoy carrying supplies to Syrians during a failed ceasefire, the US broke off talks with Moscow regarding Syria.

   

Answers to post about super heroes in certain countries: A-7, B-9, C-1, D-6, E-8, F-2, G-5, H-10, I-3, J-4.

   

Why Is the Pope Going to Philadelphia?

Pope Francis will attend the World Meeting of Families in Philadelphia. He has nothing in common with the aristocratic slave owner who wrote the Declaration of Independence in Philadelphia, but he agrees with the essence of what Thomas Jefferson wrote in 1776. That is, people are entitled to "the separate and equal Station to which the Laws of Nature and of Nature's God entitle them...."

     Specifically, to what rights are people entitled? Life, Liberty, and the Pursuit of Happiness. For Pope Francis, the pursuit of happiness goes beyond searching for gratification or escape with sex, drugs, or alcohol. The pursuit extends all the way to the eternal happiness of heaven. And what is heaven? No one knows for sure, but I believe it was St. Frances of Assisi, Pope Frances's namesake, who posited heaven could be like the Garden of Eden before Adam and Eve gave into Satan's temptation. Could be. When I lived in Hawaii, I often heard people refer to the natural beauty of the islands as "a little piece of Paradise." When, in the Pope's recent encyclical, Laudato Si, he asks individuals and countries to make changes needed to protect the environment, perhaps he is inviting us to find a bit of heaven on earth.

     In any case, Philadelphia will be for the Pope, as it has been for the many who have visited the city since 1776, a reminder that governments are instituted to secure the rights God has endowed on all people. After the Declaration of Independence listed the ways government by the King of Great Britain failed to secure basic human rights, delegates again met in Philadelphia in 1787 to write the Constitution. Not satisfied that the Constitution sufficiently safeguarded individual rights, a Bill of Rights, the first ten Amendments to the Constitution, was added in 1791. When the United Nations, which Pope Francis addresses September 25, 2015, was founded after World War II, it adopted a similar Declaration of Human Rights to promote respect for human rights and basic freedoms for people all over the world.

     Does God see countries with secure borders? It seems He sees people with secure rights, the way Thomas Jefferson did in 1776 and the way Pope Frances does in 2015.

   

   

   

 

Falling Commodity Prices Spur Diversification in Emerging Markets

Commodity exporting countries that have depended on the Chinese market have been hard hit by the slide in China's economy. Zambia, for example, relies on copper exports to China, which consumes 40% of the mineral's global output, for 70% of its foreign exchange earnings and 25 to 30% of its government revenue. Like Nigeria, which has depended on petroleum exports that are declining in value, Zambia sees a new need for economic diversification.

Check out countries heavily dependent on commodity exports:

• Bauxite: Indonesia, Jamaica, Brazil
• Chromite: South Africa, Zimbabwe, Albania
• Coal: Indonesia
• Cobalt: Democratic Republic of the Congo
• Copper: Chile, Kazakhstan, Zambia, Democratic Republic of the Congo, Peru
• Iron Ore: Brazil
• Lithium: Argentina, Chile, Bolivia
• Manganese: South Africa, Gabon, Brazil, Ghana
• Molybenum: Romania, Chile
• Nickel: (Indonesia banned exports to China), New Caledonia, Madagascar
• Petroleum: Saudi Arabia, Algeria, United Arab Emirates, Venezuela, Nigeria
• Platinum: South Africa
• Tin: Indonesia, Myanmar
• Tungsten: Myanmar, Bolivia
• Uranium: South Africa, Namibia, Niger, Kazakhstan
• Vanadium: South Africa
• Zinc: Peru, like Australia, has cut production and jobs 

Can Small Farms End Poverty?

Before performers, men, women and young people gather, at the Global Citizen Festival in New York City's Central Park on September 26, for the purpose of ending extreme poverty, let's look at a few of the factors contributing to world hunger. Silo thinking, where everyone focuses on their own problems and solutions, is undermining the need to feed and employ people, provide export revenue from agriculture, and protect the environment.

     Small farms provide employment that prevents a country's rural population from flocking to urban areas that are not ready to provide sufficient jobs, sanitation, housing, transportation, and education. David Hoyle, deputy director of ProForest has pointed out how small farms would benefit from governments willing to engage in land-use planning. What governments need to do is designate specific areas where: 1) villagers can farm and live, 2) concessions are leased to large scale export producers of, for example, palm oil and timber, and 3) forested areas needed to sop up greenhouse gases are protected. Water use planning to prevent pollution and supply sufficient water for sanitation, cooking, and crops is also necessary.

     Without land-use planning, plantations governments are counting on to provide agricultural export revenue are in constant competition and conflict with local farmers. Moreover, plantation owners need government help to provide the housing and sanitation facilities, schools, and clinics that are a constant source of complaints by the laborers they employ.

     Countries have tried to coordinate local production and crop exports by providing villagers with fertilizer, seeds, technical assistance, and credit. In exchange, under contract state-owned enterprises buy, at fixed prices, what the farmers produce. As earlier posts for Nigeria, coffee, and cocoa reveal, this process has been financially unsuccessful to both governments and small growers. Modifications have led governments to provide farmers with vouchers they can use to buy their own supplies, and private companies or coops have taken over the task of buying commodities from farmers.

     Chemical companies in a position to perform research for the precision farming that provides seeds, fertilizer, herbicides, and pesticides adapted to local soil and climate conditions in global areas of extreme poverty now concentrate their efforts on profitable corn, soybean, and cotton crops important to American agriculture, not, for example, cassava, which feeds the poor in sub-Saharan Africa.

     Instead of engineering crops to provide added vitamins and minerals to first world consumers, in areas of extreme poverty the same objective could be achieved by introducing small farmers to new crops they could plant and bring to their local markets. Not only would a greater variety of produce improve nutrition, but crop rotation could improve soils and increase a farmer's income. Farmers might save money by controlling weeds with mulch rather than chemicals, and they may even be able to make additional money by using weeds to weave baskets (see baskets for sale at serrv.org) or make bio-fuel.

(Farming topics also are covered in the earlier posts, "World (Food) Expo, Hybrid Crops & New Farming Practices" and "Back to the Land.")

New Uses for Mobile Apps

It's been awhile since I visited trendwatching.com, but, as always, this website is full of new ideas from around the world. This time, I found tech-fueled, mobile app ideas from the Asia Pacific that are worth imitating.

Using the LINE app in real time Burberry brought its fall fashion runway show to Japan. But brands aren't just using apps to sell things, they also use them to offer lifestyle, social issue, and financial solutions to their customers.

Directory apps are responding to the need to help app users find the categories they want amid game, shopping, travel, and a million other options. Indonesia-based Oiffel, Shopious, and Kleora are among the providers of directories that assist consumers by compiling lists of online shops. For businesses that use its iPads, Apple is bundling apps for specific industries. GottaGo in India provides a very useful list of nearby, clean restrooms. Other apps locate parking spaces.

Governments are discovering new ways to use mobile apps to assist citizens. The Delhi Police Department receives complaints about police officers seeking bribes and harassing citizens in India on WhatsApp. Partnered with the Shanghai government, the WeChat City Service app enables smartphone users to locate hospitals, make medical appointments, find visa services, check driving records, and browse library books.

Rural areas in BOP countries at the socalled Bottom of the (Smart) Pyramid have apps to locate rickshaws and the best fishing areas. All in all, more than half of the world's smart phones are in the Asia Pacific.

Warning to Students: Don't Cheat

Children who are motivated to cheat by copying another student's work, paying someone to write their papers, or hiring another student to take a standardized test for them could learn a few lessons from those who have avoided corruption or engaged in it around the world.

Even if the current business culture in a country sanctions corruption, the honesty espoused by Bulent Celebi's AirTies firm in Turkey offers a promising example. When Celebi established his WiFi company, which does not rely on phone lines or fiber optic cables to transmit data, he had six founding values. Besides customer satisfaction and engaged employees, he stated AirTies would be ethical. Therefore, he did not rely on bribes but, according to Elmira Bayrasli's book, From the Other Side of the World, he launched his business by working through the laborious process of dealing with Turkey's bureaucracy and paperwork. Shortcuts, he felt, would start AirTies off in the wrong direction.

     While on a visit to Nairobi, Kenya, in November, 2015, Pope Francis told a cheering crowd that corruption was easy and sweet but in the end it makes politics, even in the Vatican, and a country sick. He urged the crowd to keep corruption out of its lives, because corruption takes away joy and robs people of peace in their lives.

     Major European auto and truck maker, VW, will pay at least $15 billion for developing a cheating way to pass emissions tests.

     As a result of bribing doctors and hospitals by giving them kickbacks, the Japanese-based manufacturer, Olympus, paid a $646 million fine.

     By pretending subprime mortgages were sound, Goldman Sachs, one of the US firms that helped bring on the 2008 recession, is expected to pay about $5 billion to resolve state and federal investigations.

     In Brazil, President Dilma Rousseff and House Speaker Eduardo Cunha have been implicated in a corruption scandal involving construction firms that paid bribes to Petrobras, the state energy firm. Marcelo Odebrecht, former head of Brazil's giant construction company, designed the scheme that paid kickbacks to win contracts from senior Petrobras officials and that funded political campaigns. In March, 2016, Odebrecht was sentenced to 19 years in prison. Although Rousseff thus far has been found blameless in the Petrobras scandal, the charge of her involvement has led to a call for her impeachment and hurt the country's economy by stopping building and energy projects. Petrobras has had to stop paying dividends, and the company has cut $32 billion from its 5-year $130 billion investment plan. Now that the Federal Accounts Court has ruled that Rousseff's administration used illegal accounting practices, the prospect of impeachment is even greater. Eventually, Rousseff was out, but in June, 2017, new President Michel Temer was charged with taking $11.5 million in bribes for helping a meatpacker who had tax and loan problems.

     Sigmundur David Gunnlaugsson, Iceland's Prime Minister, was the first victim of a leak of papers from the Panamanian law firm, Mossack Fonseca. In April, 2016, he stepped down, when it was disclosed that he and his wife owned an undeclared off shore account where he concealed millions of dollars from taxes. The papers reveal Mossack Fonseca also has formed off shore shell companies to help other clients launder money, dodge sanctions, and evade taxes.

     Nigerian authorities fined the South African-based MTN multinational mobile telecommunications company $5.2 billion, later reduced to $3.4 billion. Of MTN's 62 million subscribers, the company failed to disconnect 5.1 million unregistered, and therefore unidentified, Sim card accounts. Kidnappers had used an unregistered Sim card from MTN to demand a ransom for Nigeria's former finance minister, Chief Olu Falae.

     A November, 2015 report from the World Anti Doping Agency alleging State-sponsored doping of Russia's Olympic athletes could result in banning the country from competing in 2016's Summer Olympics. And the head of the agency that selects the countries that hold World Cup soccer matches had to resign, when winning host countries were found to have bribed their way into the honor.

     In Indonesia, the government's failure to keep an up-to-date land registry results in an inability to assign blame for the devastating forest fires on the islands of Sumatra and Borneo that also have spread a thick haze of smoke to Malaysia, Singapore, and southern Thailand. All together, the smoke has caused an estimated 500,000 respiratory tract infections, and 100,000 premature deaths are a possibility. Fires are set by cheap slash and burn methods used to clear for new planting by both small scale farmers and corporate palm oil, timber (used for paper), and other agricultural corporations. Standards for the hiring and working conditions of migrant labor in the palm oil industry have failed to remedy abuses. When an investigation by the Roundtable on Sustainable Palm Oil found the Malaysian palm oil company, IOI, failed to correct deforestation violations in its concessions, Unilever and 9 other major companies cancelled their contracts with IOI.

     You can read about charges of corruption Russia faces in the earlier blog post, "Hearing Voices." And Communist Party officials throughout China have been severely punished as reported in the earlier blog post, "China's Corruption Crackdown, New Bank Backing, and Release of PR Activists."

Look Beyond Africa's Current Woes

Falling commodity prices and a terrorist attack in Tunisia haven't prevented the private equity Abraaj Group's institutional investors, pension funds, and development finance institutions from making a total $1.37 billion investment, mainly in Algeria, Egypt, Morocco, and Tunisia.

Arif Naqvi, Abraaj's founder, sees middle class consumption doubling in the region between 2014 and 2024. Consequently, what the fund looks for is well-managed, mid-market businesses where the fund can influence strategy and growth in fields that benefit from the growing middle class. These fields include: healthcare, education, consumer goods and services, business services, materials, and logistics.

Remember when Lucy in the "Peanuts" cartoon said what she wanted as a gift was real estate. Grandparents might look beyond the latest toys and video games advertised on TV and give their grandchildren a stake in a fund with emerging market investments. It won't be a favorite gift now, but when the high costs of college and grad school come around, kids (and their parents) will be very grateful.