An example of red tape

I’ve written previously about tangible expenditures in the world of development – expenditures that may be sub-optimal. Today I want to talk about intangible costs, particularly those that arise as a result of bureaucracy and red tape. We’re all anecdotally and/or theoretically familiar with these problems in the development context. I’d like to highlight a specific example garnered from a primary source.

In the interests of disguise, let’s consider the following actors:

• A country in Africa: Africania
• A most-well known development bank: RFDI (really famous development institution)
• A leading global accountancy: LGA

Background:

• Ministry of Agriculture (MoA) in Africania decides it needs some funding from RFDI for a project
• Project divided into multiple components, each with a different implementing agency (IA)
• Leading global accountancy (LGA) hired to manage a project

Here is the process:

• Step 1: IAs report budget projections to LGA
• Step 2: LGA consolidates and corrects and sends projections to MoA
• Step 3: MoA approves projections (after possibly altering) and sends to Ministry of Finance (MoF)
• Step 4: MoF receives request for funding and sends to local disbursement office of RFDI
• Step 5: Local disbursement office of RFDI approves and submits proposal to RFDI headquarters in the US
• Step 6: Money sent from RFDI headquarters in the US to Africinia government account in London
• Step 7: LGA makes a request for withdrawal from that account and sends to MoA
• Step 8: MoA approves/changes withdrawal request and sends to MoF
• Step 9: MoF approves withdrawal request, includes it in budget expenditures and sends it to Central Bank
• Step 10: Central Bank withdraws money and sends it to MoF account
• Step 11: MoF hangs around a bit, delays, and sends it to MoA account
• Step 12: MoA hangs around a bit and sends money to project account
• Step 13: LGA can now disburse to IAs and project beneficiaries

Wow!

Of course, by now the circumstances under which the original projections were reported (step 1) are likely to have changed significantly. So, many times there are mismatches between available funds and expenditures.

I realize many of these steps are in place to avoid corruption and misdirection / misallocation of monies, but surely there are at least some efficiency improvements in the offing!

Development in 5-star

What percentage of the global development community’s budget, I wonder, is spent on 5-star comforts? By this I mean on such items as: business class (or better) air travel; 5-star (or better) hotel accommodation; $30 (or higher) meals per head; conferences / retreats / workshops at 5-star (or better) venues; etc? I would wager: a quite significant proportion.

There is, of course, the argument which follows: to address development problems we need to attract top talent; to attract top talent we need to provide the resources and opportunities to achieve a certain minimum standard of living – or we will lose talent to other sectors.

For many ‘expat’ development practitioners, because they have been brought-up in relatively comfortable western environments, I can see how it would be very difficult to permanently adapt to a considerably tougher living environment. While many are willing to take significant pay cuts, not everyone is willing for (or cut out for) life in a village with no electricity (at least not long-term). For top ‘local’ talent, meanwhile, simply the fact that the opportunity cost of other options – given their skills and qualifications – is quite high, would see them also demand a fairly high salary to work in development.

I would offer that these arguments are reasonable and justify expenditure on good salaries and comfortable travel arrangements in the development sector.

But it is a step-up from paying someone enough (and by this I mean even as high as the 95^th percentile in the local income scale) to be able to live quite comfortably while doing development work in Asia or Africa or Latin America, to spending lavishly on 5-star hotels, business class air travel and annual staff retreats.

The question is: should there be some limits? Are private sector style trappings needed in order to attract and retain talent for the development challenge? Even if not needed, do they have the effect of motivating people enough such that the cost-benefit trade-off is positive? Is it justifiable for NGOs, multilaterals, developing country governments and western government development arms to spend on these additional comforts?

I’m not sure where I stand. I would say that it needs to be evaluated on a case-by-case basis, because I’ve experienced both sides of the spectrum: instances where the value-add outweighs costs as well as instances where the cash could have been more useful had it been left as a tree. An example on the plus side: there was a retreat I once attended at a resort in Southeast Asia, where a small group of NGO managers went through a 2-3 day visioning and strategic planning exercise. While it is impossible to directly attribute cause and effect in such cases, the subsequent successes of this group of NGOs gives me comfort that the retreat was well worth the expense. For an example on the flip side, here is a direct quote from a former World Bank infrastructure finance consultant*: “On a trip to the Middle East – business class, via a rest stop at the Park Lane Sheraton in London, with an automatic upgrade to suite – I spent two weeks at the InterContinental Hotel in Amman, Jordan, ostensibly to help organize a conference on infrastructure finance. I had little to do beyond ensuring that the PowerPoint projector worked correctly. The most pressing task was composing a birthday greeting to King Abdullah on behalf of the World Bank and the senior government officials attending the conference.” Another recent example, though not directly related to development: http://www.nation.co.ke/News/-/1056/606104/-/ujr7c6/-/index.html .

I look forward to getting your comments.

* Former WB consultant and current writer, J. Maarten Troost, from his novel “The Sex Lives of Cannibals”.

Did Obama have notes?

This was the most important question during dinner at a client workshop the other night. Did Barack Obama have notes during his much-publicized speech to the Islamic World, from Cairo last week? Obama is, of course, somewhat of a source of pride here in Kenya (given his lineage) and Africa more generally. The idea that he was able (allegedly) to give a 45-minute speech, entirely from memory, just adds to the aura of the man. “It was made in front of a live audience;” it was argued, “no way possible for a teleprompter there. And he never looked down at any notes.”

Really? 45 minutes sans any notes at all? Now, that would be something.

When a menu just gets in the way of food

When you go to a restaurant you expect the menu to give some indication of what might be available in the kitchen. In India this is quite often not the case. On umpteen occasions I’ve gone through the process of perusing the menu, short-listing what I would like and then finding out that what I want is not available. Ok, how about this then? Not in market today. How about this? Only after 4pm. This? Just ran out. What do you have then? X, Y and Z. That’s it? Yep. I see. So why, pray tell, did you give me a menu with 200 different items when all you have available are three things?

Already, in just my first few days in Nairobi, I’ve noticed cultural similarities aplenty between India and Kenya. The prevalence of over-ambitious menus can now be added to that list. I went to dinner with friends to Al Yusra, which experts would have it is the best Somali eatery in town. And, certainly, the menu promised lots of never before sampled goodies. It took some time but eventually I’d figured out what I was going to try. But – you guessed it – it turned out that only the following things were available: fish or beef or chicken; with rice or chapatti. That’s it? Yep, that’s it. The fish and rice was, admittedly, delicious. But I hope to go back and try something more 'exotic'.

Scams around the world

One of the fun aspects of travelling widely is learning about the various creative scams that people try around the world. A popular one in India is where a taxi driver is in cahoots with certain shops or hotels, and so will dissuade you from other options. By taking you to one of his ‘choice’ options – which may not necessarily be what is best for you – he receives his tidy commission. I’m sure everyone can describe their own favorite.

Oftentimes, discovery of a local scam is a result of falling victim to said scam and then, later on, having that “ah ha!” moment – when you realize you’ve been had. Sometimes however, you can be either smart or lucky enough to catch the would-be scam artist red-handed, so making him look the foolish one. This is what happened to me today.

I was sitting, sipping a coffee in one of Nairobi’s upmarket shopping malls – you know, the type where all the well-to-do, tourists and expats hang-out – when my eyes momentarily met with the searching eyes of some guy walking past. Immediately he gives me a nod-smile and starts walking my way. I smile and try going back to my paper, but he’s already in front of me with an outstretched hand. So we shake hands, and he beams, “Hello sir, how are you?”

Hesitant: “I’m fine thank you.”

Very chirpy: “Do you recognize me?”

Now, this was the crucial moment. In such a situation sometimes I’m inclined to go with a “Oh yeah, of course…” and hope that some hint might offer itself before too long as to how exactly I know this person, if at all. This time, however, I must have been in a less tolerant mood, so without a second’s hesitation, I stated, “No, I don’t sorry.”

He seemed a little taken aback, but was nonetheless prepared for this answer. “I am the gateman Sir, remember? I was at the gate and I did…” – and here he made the ‘salute’ gesture – “… to you.” And so I figured out what he was after: a tip for alleged gate-keeping services provided.

“No, I’m sorry, I don’t remember. Where?”

“At the building, Sir, I was the man who was there…” – and again the ‘salute’ gesture – “… when you kept going in and out.”

“Which building?”

Now he was truly taken aback. “Err… you remember, Sir, last week. I was there.”

“Where? Which building?”

“Which building?”

“Yes, which building?”

What came out of his mouth next was not very clear. He rattled off the names of some half-a-dozen buildings, either made-up or genuine I don’t know. But he knew the game was up. I smiled and said, “I’ve never even heard of those buildings. I’m sorry, you’ve got the wrong person.”

He smiled, clearly frustrated his scheme didn’t work, and moved on. I watched him for a bit. Of course, he didn’t try it on anyone near where I was sitting or I would know for sure. But I also wanted to see him try with someone else, just to satisfy myself that it was a scam and that I hadn’t brushed someone off who I was meant to recognize. So I kept watching and, yes, just before he turned the corner, I saw him do the same nod-wave and walk towards some well-dressed businessman.

Do you have a favorite travel scam story? Did you fall victim? Or did you catch the scam artist? Add your stories here.