DEVELOPMENT, INVESTMENT AND CORUPTION

As NATO’s commitment to Afghanistan winds down, the Westminster Government is aiming to fund a £10 million pound programme to help Afghanistan exploit its huge natural resources. This may sound too many people like a lot of money but considering that estimates of what lies underground in Afghanistan range from some $1 – 3 trillion dollars (US) worth of gold, gems, iron ore, and oil and gas. Now this has little to do with largess, no doubt hoping for a percentage, David Cameron’s three-year funding programme, to support the Afghan Ministry of Mines was launched at an event at Downing Street (March 6th).

UK Mining Aid in Afghanistan: Throwing Good Money After Bad?

The announcement came as Mr Cameron hosted dozens of UK investors and mining contractors at Downing Street.  He said the UK had already played "a huge and honourable role" in stabilising Afghanistan, but that the country needed "prosperity, growth, jobs, investment and wealth". British mining companies welcomed the announcement. Cameron’s decision could be described as courageous, especially with the claims that the award of mining contracts in Afghanistan after the fall of the Taliban were directly affected by corruption.

Transparency International in 2012 Corruption Index (CPI) currently ranks Afghanistan as one of the (joint) most corrupt country with North Korea and Somalia. President Hamid Karzai in the United State for the NATO Summit in Chicago (in 2012) was asked by CNN’s Wolf Blitzer about this rampant corruption issue in Afghanistan. As usual, President Karzai’s answer was “it is the contractual mechanism that the US applies in Afghanistan” that encourages bribery, fraud, and corruption.

The Afghan President has always blamed the west for the loss of billions of aid dollars and the rise of corruption in Afghanistan. The reality is less simple as on a daily basis, ordinary Afghans are less concerned about the kinds of bribery that is (and does) occur when the US and Western  development agencies hand out big development contracts. Ordinary Afghans are more infuriated by the kinds of bribes that they often have to give to get what they are legally entitled to via “harassment bribes.”

Basically harassment bribes are like when a retired Afghan has to pay some cash to the pension officer to receive his retirement check. Or, when a young man or woman freshly graduated from college has to get his or her paperwork done in order to become a teacher. To accomplish this the prospective teacher will be asked to pay a hefty bribe. Or your Tazkira or national ID card is held up until you pay some cash to the officer in charge. These are all simple illustration of harassment bribes.

Harassment bribery is widespread in Afghanistan, and it plays a large role in breeding inefficiency and has a profoundly destructive effect on civil society. While President Karzai consistently wags the finger at the West for widespread corruption in Afghanistan, yet his administration has failed to take responsibility for banishing bribery on the lower level. The West has for a quiet life has looked the other way as local low level corruption tends to be written off as a fact of life something that indirectly may feed support for the Taliban.

Now it may be a question of scale, the World Bank has regularly appealed for future Afghan mining concessions to be better regulated and more transparent, and the UK’s new financial support is aimed at improving that process. Cameron’s theory is that by improving Afghan technical competence, and ensuring a transparent process, should help to secure that along with the concerns that vast investments made by companies from China and India have reduced  opportunities for others i.e. The UK.

When it comes to mining contracts it certainly appears to be a matter of scale. The award of a 30-year contract to a Chinese consortium to exploit the Mes Aynak copper mine in Logar province is one of the deals that has come in for particular criticism. The exact details of 2007 deal with China Metallurgical Group Corporation have never been made public, something that continues to fuel rumours of bribery and kick-backs along with serious concerns about the potentially massive environmental and cultural impact of the mining project on local communities and local people.

Some years ago, the Taliban blew up Afghanistan's ancient Buddha's of Bamiyan, provoking a degree of international outrage amongst the concerned and amongst the chattering classes. At the time the Taliban's brutal treatment of women and religious minorities oddly enough provoked less public outrage - no doubt because pipeline route deals (to get the oil out of Central Asia) were in the offing. Now, the country's rich archaeological heritage is facing a new and different threat - that of mineral exploitation and development of resources.

The Peoples Republic of China (currently busy sourcing minerals and foodstuffs from around the world to feed its economy and its people) has its sights on another ancient Buddhist site in pursuit of copper. Mes Aynak ironically is an ex al-Qaeda training camp and home to a 1,400 years old Buddhist monastery. This site is relatively intact with walls, corridors, stupas brightly painted red Buddha's. The monks originally settled here because there was copper in the ground; part of a Buddhist kingdom and a Silk Road way-station, other things carried Buddhism from India to Tibet, and into China.

The China Metallurgical Group (MGC) has a 30-year lease to mine copper to develop a copper mine. The mine alone could give Afghanistan $1.2 billion (£755 million) per year in revenue along with much needed jobs. Chinese miners have set up camp and special armed security guards patrol miles of fencing around the site. Beneath the site lies the world's second-largest untapped copper reserve, and the Chinese have bought the mineral rights to the entire area.

The archaeological site was discovered during excavation of the site for MGC - archaeologists have three years to salvage the site, which could easily take 10 years to properly excavate. Afghan archaeologists are aware of what has been lost in thirty years of war, and have deep concerns that a lot of their cultural heritage has been destroyed, damaged and looted. Their concerns stretch well beyond Afghanistan as they perceive the artefact's as not just belong to their country, but as human treasure which belongs to all of us.

Overwhelmed by both large and small scale corruption what can an endemically corrupt Afghan government do to discourage bribe givers and takers (at all levels of government) even if it wanted to? Endemic corruption aside the security situation is the key, with NATO leaving and the Taliban waiting in the wings things don’t look good.

Yet if things stabilise then there may be new rush to exploit Afghan mining opportunities, but, at what cost to the Afghans themselves, who have seen what has happened in other post-conflict countries. Elsewhere in the world, in Africa and elsewhere, large deposits of mineral resources have often proved to be a curse, often enriching the few (and the mining companies) rather than benefiting local people who have often lost out.

LIVING IN THE NOW?

The 2011 Census results have attracted plenty of interest; one interpretation is the confirmation that Wales is a resource rich country with a poor people. This is something that even unionist opponents of independence would do well to recognise, along with the acknowledgement that we are not predetermined (or doomed) to be poor. Historically our natural resources were largely been exploited by others for the benefit of others. There were scant benefits for the great majority of the Welsh people beyond low pay and dangerous employment in the extractive or manufacturing processes.

Following the almost wilful destruction of the heavier industries, the Welsh Office and then the National Assembly pursued a policy of blindly throwing vast sums of public money towards attracting external industry to Wales by providing relatively cheap labour. This largely short policy known as 'inward investment' by and large failed to secure long term employment or grow small to medium sized indigenous enterprises, which are the key to sustainable prosperity.

I for one am pretty tired of seeing the same old recycled old WDA press release in the Western Mail / Daily Post going on about how this or that development will create 6,000 jobs (again). The Government in Cardiff (even with relatively limited powers and an even more limited imagination) reacted far too slowly to the emerging challenges from Eastern Europe and more distant competitors.

We in Wales have paid the price for that inbuilt smug complacency as between 1998 and 2008, some 171 foreign-owned sites closed, with the loss of 31,000 mostly manufacturing sector jobs. The economic development model as practised by the Westminster Government (and the Welsh Office) before 1997 and by the Welsh Government (save between 2007 and 2011) was fundamentally flawed at a very basic level – focused on the short term and fundamentally dependent upon a combination of relatively cheap labour and other inducements.

Economic development (from the 1950's onwards) was focused on one-off large scale developments (single egg solutions), which promised much and deliver significantly less. The assumption, not entirely incorrect, may have been that other smaller business would develop supply materials, goods and services to the primary larger employer – this happened in part, Llanwern Steel works (before the rundown) being a reasonably good local example.

The problem was that if the larger economy suffered a downturn or caught cold then the smaller firms would suffer with varying degrees of pneumonia. The focus should have been on developing small to medium size local businesses, which are significantly less likely to up sticks and leave for perceived greener pastures and fresh applications of development grants and also tend to trade with each other and other local firms.

The LG development near Newport was a classic example of this flawed economic vision - promising the usual 6,000 jobs – it accrued significant public funding (from the then Welsh Secretary, William Hague) yet never delivered anything like what was promised. Most economists (even Conservative ones) should have had serious concerns about the state of the Korean and the Far Eastern economies and a basic understanding of where technological developments in relation to PC monitor screens were going, enabling them to say hang on a moment.

This combination of fantasy island economic assessments, a fatally flawed business case and a forthcoming Westminster election led to one of the more spectacularly duller decisions of recent years being made, something that ended up costing us millions of pounds worth of public money. The old WDA never delivered anything like long term economic stability and much needed long term job opportunities to our communities – something that it should have done considering the amounts poured into it.

Wales is a recipient of significant quantities of Objective One funding, targeted at the West and the Valleys since New Labour recognised the economic and social affecting those parts of our country. Yet European funding opportunities appears to have been seriously squandered, where are the physical assets, by which I mean the things you can literally put your hand on like improved communications (rail and road), broadband infrastructure, etc - that bring long term real benefits to our communities.

Yes, we have developed a highly profitable training culture (in and around Cardiff) quite exactly what this delivers for the Welsh people is open to question? How much money has been scammed (and scammed may be the key word) into dubious expensive training programmes and questionable educational programmes that fail to deliver the necessary skills that workers and potential workers need to make a decent living in the modern economy?

The Plaid driven One Wales Government (2007 – 2011) made significant efforts to think and act differently when it came to economic development with its focused support for small to medium sized enterprises. The current Labour Party in Wales’s government in Cardiff has simply returned to the failed economic development policies of the past.

Living in the past simply won’t work! The old failed model of going out to attract branch factory operations for a relatively short term period has been rolled out once again. This does little to help develop our economy or equip our people for the twenty first century world of work it merely repeats the costly mistakes of the recent past, but, of course Labour in Wales is far happier living in the past than planning the future for Wales.

DOOMED TO REPEAT THE MISTAKES OF THE PAST?

The Westminster Welsh Affairs Committee is correct when it says that Wales was ‘slow to adapt’ to changes in the international market for overseas investment. There is much truth in the Committee's labelling of the late 1980’s and early 1990’s as a ’golden age’ for attracting foreign business investment thanks to a combination of grants, land and relatively cheap labour costs.

The Committee is also correct to say that successive governments reacted far too slowly to new emerging challenges from Eastern Europe and more distant competitors. Wales paid the price for that complacency as between 1998 and 2008, some 171 foreign-owned sites closed, with the loss of 31,000 jobs, mainly in the manufacturing sector.

The economic development model as practised by the Westminster Government (and the Welsh Office) well before 1997 and by the Welsh Government before 2007) was fundamentally flawed at a very basic level – it was short term and fundamentally dependent upon a combination of relatively cheap labour and other inducements that could never compete on a truly level playing field.

For too many years economic development (from the 1950's onwards) was focused on one-off large scale developments - what can be best described a single egg solutions, which promised much and deliver significantly less. The assumption, not entirely incorrect, may have been that other smaller business would develop supply materials, goods and services to the primary larger employer – this happened in part, Llanwern Steel works being a reasonably good example.

The problem was that if the larger industry suffered a downturn or caught cold then the smaller firms would suffer with varying symptoms of pneumonia. The focus should have been on developing small to medium size local businesses, which are significantly less likely to up sticks and leave for perceived greener pastures and fresh applications of development grants and also trade with each other and other local firms.

The LG development near Newport, was a good example of this - promising the usual total of 6,000 jobs – it accrued significant public funding (committed by the then Welsh Secretary, William Hague) yet never delivered anything like what was promised. Most economists (even Conservative ones) should have had serious concerns about the state of the Korean and the Far Eastern economies and a basic understanding of where technological developments in relation to PC monitor screens were going, enabling them to say hang on a moment.

A combination of fantasy island economic assessments, a fatally flawed business case and a forthcoming Westminster election led to one of the spectacularly duller decisions of recent years being made, something that ended up costing us millions of pounds worth of public money. The old WDA has in truth not really consistently delivered anything like long term economic stability and much needed long term job opportunities to our communities that it should have done considering the amounts poured into it..

European funding opportunities has been seriously squandered, where are the physical assets, by which I mean the things you can literally put your hand on like improved communications (rail and road), broadband infrastructure, etc - that bring long term benefits to our communities. How much money has been scammed (and scammed may be the key word) into dubious training programmes and questionable educations programmes that fail to deliver the necessary skills that workers and potential workers need to make a decent living in the modern economy?

What was called in some circles the Plaid driven One Wales Government (2007 – 2011) at least made significant efforts to think and act differently when it comes to economic development and support for small to medium sized enterprises. Simply going out to attract branch factory operations for a relatively short term period does not help develop our economy it merely seeks to repeat the mistakes of the recent past, but, of course Labour (New or Old) is far happier living in the past than in Wales.

WORKING FOR WALES?

Planning permission can be a touchy subject, especially when a development (whether for commercial, housing or energy development) is controversial or the final decision is made against the wishes of local people by a fairly distant and indifferent authority. It's pretty obvious that we lack a coherent national strategic development plan for Wales judging by the half-baked way local unitary development plans have been put together over the years, doing some pretty serious damage to our environment in the process.

News that the developers are set to appeal against a decision by Torfaen council to reject controversial plans for 1,200 homes in Sebastopol, should come as no surprise to most dispassionate observers. The original application was made by a consortium of developers (including Asbri Panning Ltd, Barratt Homes and the Welsh Development Agency) for the housing to be built on farm and woodland near Cwmbran Drive.

Torfaen County Council (wisely in my opinion) rejected the application on a number of different grounds including highways, transport, access and circulation and threat to surrounding green wedges of land. The development consortium has decided to skip negotiations with Torfaen County Council and go straight to an appeal against the planning decision. Back in July, Torfaen County Councillors refused the planning application, but, have until next week to formalise the exact wording of the reasons for refusal of planning consent.

You do have to ask yourself why the Welsh Development Agency, now an arm of the Welsh Government is working against the best interests of the people of Torfaen and seeking to develop the few surviving green wedges between Cwmbran and Pontypool. For the record, our county only has one notional green belt, and that lies between Cardiff and Newport, Scotland has 7 and Northern Ireland has 30 - each has its own policy guidance.

The idea of Green belt worked and worked well, as of 2007, Green belt covered something like 13% of England (around one-and-a-half million hectares) which despite the best efforts of previous Conservative and New Labour Governments it is still relatively well protected both by normal planning controls and against "inappropriate development" within its boundaries. It's worth noting that 'Green belt' is a useful planning tool, which was introduced for London in 1938 but then ended up being rolled out to England as a whole by a government circular in 1955.

We have seen in the south east, especially along the coastal belt and in and around Torfaen, over the last twenty years a spectacular growth in the amount of housing. The fact that a significant percentage of which was never aimed to fulfil pressing local housing needs may be of note, along with the fact that Newport City Council (and no doubt others) have encouraged a growth in housing to fill predicted anticipated gaps in demand for housing in and around a large city across the bridge.

As a result the infrastructure along the coastal belt between Chepstow, Caldicot, Rogiet and Magor is struggling to cope with existing developments and this is well before the projected expansion of housing on and around the former Llanwern site. The north of Newport has now been linked effectively to the south Cwmbran - something that has brought little material benefit or improved quality of life to either urban area.

We often seem to fail to note that once the Green belt or Green wedge is gone it's gone forever, we cannot restore it. The Con Dems in England (in Westminster) are seeking to free up green belt and agricultural land for housing (and other) development. There is a real need for a Welsh equivalent to Green belt, to fringe our urban areas, to help focus out of town and fringe of town developments, not to mention helping to protect rural green spaces between and within some of our urban areas for current and future generations.

HOMEGROWN SME'S V BRANCH OFFICE DEVELOPMENTS

Small businesses play a significant role at the heart of our communities; they create wealth and sustainable employment opportunities for local people. Profits and investments made by them tend to stay within the communities where they are based. For too many years economic development in Wales has been focused on large scale development of what can be best described a single egg solutions, which promise much and deliver significantly less, the focus should be on developing small to medium size local businesses, which are significantly less likely to up sticks and leave for perceived greener pastures and fresh applications of development grants.

This focus on attracting large scale single enterprises, which promise much but deliver significantly less than anticipated. The LG development near Newport, is a good example of an expensive disaster / fiasco [please take your pick] which promised the usual total of 6,000 jobs - accrued significant public funding - which was committed by the then Welsh Secretary, William Hague, yet never delivered anything like what was promised. While anyone (even a Tory) with half a brain or even half an understanding of the state of the Korean and the Far Eastern economies at the time that and a basic understanding of where technological developments in relation to PC monitor screens were going, would have put their hands up and said hang on a moment.

A combination of what can best be described as fantasy island economic assessments, a fatally flawed business case and a forthcoming Westminster election led to one of the spectacularly duller decisions of recent years being made, something that ended up costing us millions of pounds worth of public money. The WDA has in truth not really consistently delivered anything like long term economic stability and much needed long term job opportunities to our communities that it should have done.

European funding opportunities have been seriously wasted, where are the physical assets, by which I mean the things you can literally put your hand on like improved communications (rail and road), broadband infrastructure, etc - that bring long term benefits to our communities. How much money has been scammed (and scammed may be the key word) into dubious training programmes and questionable educations programmes that fail to deliver the necessary skills that workers and potential workers need to make a decent living in the modern economy?

The Plaid driven One Wales Government has made significant efforts and attempts to think and act differently when it comes to economic development and support for small to medium sized enterprises, which are the only real thing that will put wealth into our communities, and develop and sustain longer term employment possibilities. Attracting branch factory operations of a relative short term duration does not help develop our economy - we really do need to think differently and focus economic development priorities on smaller local businesses who will be rooted in our communities and offer more flexible employment opportunities.

The Federation of Small Businesses (FSB) has noted that the UK is losing 2,000 local shops every year and that of this rate of loss continues then by 2015, less than 5 years hence, there will be no independent retailers left in business, something that will badly hit both consumers and our communities hard as they lose any real choice in the marketplace and lose potential job opportunities. Over the last twenty years the commercial hearts of many of our communities have been seriously damaged as a result of a combination of aggressive policies pursued by the larger retail chains and exceptionally poor decision making on the part of local government and central government indifference.

When combined with the rapid growth of unsustainable, ill-thought out and more than questionable out of town and edge of town retail developments which leave next to no place for the smaller local businesses and retailers and deprive consumers of real choice. When you factor in parking charges, business rates and the effect of the closure of high street banks and post offices in many of our communities and you begin to see why many of our smaller businesses and local shopping centres are up against it. Local small businesses as well as trading with us the consumers, also trade with each other - so the community gets twice the benefit. Money spent by and in local businesses spends on average three times longer in the local economy than that spent with chain stores which is instantly lost to the local economy which in times of recession our communities can ill afford.

The Welsh Assembly Government's Green jobs Strategy is a welcome step in the right direction but clearly more needs to be done. The National Assembly needs to have the power to vary business taxes in order to help boost our businesses, as well as encourage investment in skills and the tools of their businesses and their workers. If we are going to make Wales a nation of aspiring entrepreneurs and to encourage and enable them, our communities and our economy to flourish we need to encourage the development of community owned social enterprises.

The Rowlands review into the provision of growth capital was most welcome; it recognised that an economical vibrant SME sector is vital for economic growth. There has been a lack of provision for companies in Wales who are looking for between £2 and £10 million pounds in capital, this has to change if we are to encourage sustainable economic growth and development.

It’s pretty clear that the present financial market and its institutions have failed over recent years to supply sufficient venture capital for the SME sector in Wales. We need a venture capital fund for Wales, which should be established by, but independent of the Welsh Assembly Government. Such an independent venture capital fund could raise capital and deliver investment through a co-investment model, with approved private sector partners to our SME sector, where such investment would make a real difference.

More of the same old twaddle from Whitehall and Cathays won't do at all, vastly expensive one egg, one basket schemes to generate the seemingly standard 6,000 jobs, just won't do. And speaking of twaddle, which was all that we were offered by the London based political parties, what we need is fresh thinking and action from the new government - more than just talk, we need some concrete steps to encourage growth, boost manufacturing industry, support our small to medium sized enterprises and an end to the business rates and that's just to start with... otherwise it will just be a case of same old, same old with ill thought out out public sector cuts which will do nothing to boost our communities and our economy.

GOOD FOR BUSINESS, GOOD FOR US

Small businesses are a vital part of our communities; they create wealth and sustainable employment opportunities for local people within our communities. For far too long economic development in Wales has been focused on large scale development of what can be best described a single egg solutions, which promise much and deliver significantly less, the focus should be on developing small to medium size local businesses, which are significantly less likely to up sticks and leave for perceived greener pastures and fresh applications of development grants.

There has been far too much focus on attracting large scale single enterprises, which promise much but deliver significantly less, the expensive disaster / fiasco [take your pick] promised a spectacular total of 6,000 jobs - significant public funding was committed by the then Welsh Secretary, William Hague, it never delivered. Anyone with half a brain or even half an understanding of the state of the Korean and the Far Eastern economies at the time that and a basic understanding of where technological developments in relation to PC monitor screens were going, would have put their hand up.

A combination fantasy island economic assessments, a fatally flawed business case and a forthcoming Westminster election led to one of the duller decisions of recent years being made, something that ended up costing us millions of pounds worth of public money. The WDA has in truth not really delivered anything like long term economic stability and Long term job opportunities to our communities.

European funding opportunities have been wasted, where are the physical assets, by which I mean the things you can literally put your hand on like improved communications (rail and road), broadband infrastructure, etc that bring long term benefits to our communities. How much money has been scammed into dubious training programmes and questionable educations programmes that fail to deliver the skills out workers and potential workers need to make a decent living in the modern economy?

The Plaid driven One Wales Government has attempted to think and act differently when it comes to economic development and support for small to medium sized enterprises, which are the only real thing that will put wealth into our communities, and develop and sustain longer term employment possibilities. Attracting branch factory operations of a relative short term duration does not help develop our economy - we really do need to think differently and focus economic development priorities on smaller local businesses who will be rooted in our communities and offer more flexible employment opportunities.

The Federation of Small Businesses (FSB) noted that the UK is losing 2,000 local shops every year and that of this rate of loss continues then by 2015, less than 5 years hence, there will be no independent retailers left in business, something that will badly hit both consumers and our communities hard as they lose any real choice in the marketplace and lose potential job opportunities. Over the last twenty years the commercial hearts of many of our communities have been seriously damaged as a result of a combination of aggressive policies pursued by the larger retail chains and exceptionally poor decision making on the part of local government and central government indifference.

When combined with the rapid growth of unsustainable, ill-thought out and more than questionable out of town and edge of town retail developments which leave next to no place for the smaller local businesses and retailers and deprive consumers of real choice. When you factor in parking charges, business rates and the effect of the closure of high street banks and post offices in many of our communities and you begin to see why many of our smaller businesses and local shopping centres are up against it.

Local small businesses as well as trading with us the consumers, also trade with each other - so the community gets twice the benefit. Money spent by and in local businesses spends on average three times longer in the local economy than that spent with chain stores which is instantly lost to the local economy which in times of recession our communities can ill afford.