Tuesday, September 29, 2009

Conflict of interests

Dear my country fellows, it is time to make a change that could boost efficiency of public governance, restore the respect towards the state, and increase the living standard of the citizens without much a cost.

This is to remove the conflict of interests that crawls like fungus on the walls of our governance, spreads throughout the society and rots our normal daily life.
Conflict of interest, at the present, is leading the state governance to bankruptcy, throwing off balance its normal operations, and making the governance almost dysfunctional.

The Mongolian society has not paid proper attention to this growing problem from the beginning and has not eliminated it on time. The Mongolian state itself has not held responsible any of the perpetrators, and this threat has dug deeper into the roots of the society.

Conflict of interests is a disagreement between personal and public benefits where the state and local administration officers abuse their public positions for their personal profit, both material and non material.

The major reason why there are relatively fewer occurrences of conflicting interests in other democratic societies is that they can take preventive measures before such instances occur. If it does occur, it is cut off immediately and the society is getting better immunized. That is why it never reaches there the level of crisis like in Mongolia.

Recently the German Health Minister took the official car to a beach in Spain for her own leisure and caused a huge media buzz. On the next round of parliamentary election two months later, German voters did not support her and her Social Democratic Party as a punishment for vacationing with the tax payers money. Thus otherwise the leading political party had lost the election.

When such a rich country resigns its minister for such a small stuff, how about our nation? What nonsense is the use of a government car for private pleasure! What about those public officials who make the whole ministry, agency and industry a part of his own business. It is a common phenomenon in Mongolian governance to see a minister, his deputy or other high ranking officials, who own businesses in the same sector, finance the election campaign of their party and run their own political election campaign at the cost of public and recover their cost several times after getting elected then nominated into position aimed. This has become a norm of Mongolian governance. The citizens are accustomed to that, and it looks like the foreign partners accepted it too.

A head of investment department of each ministry must always be replaced if the minister is changed. This position responsible for ministry’s investment package is higher than any political seat in that administration. This person invests public money through so called “tender.” If we consider that one third of everything Mongolians have produced in a year is redistributed through the public procurement, that investment department becomes a large shopping counter. But this is only one of thousands of counters in a “department store” of state and local governments.

The government is the largest employer in the country as the public servants became fifteen percent of the labor force. The dream job of many young people is a tax or a customs inspector, judge and police, or a political party’s, its affiliated organizations’ leader. Working for the government means having a chance to study abroad, getting an apartment or, if lucky, becoming a servant for the next government-born billionaire. These facts indicate that sad fact that the Mongolian society accepts and respects conflict of interests.

The basic condition for removing and preventing the conflict of interests is to make the government transparent and keep it that way. True information must reach the society on time in a country with a transparent government. That is the main role of the media. Only the citizens with true and complete information can join their voices and demand with power for transparency.

The political driver that presses for complete and true information is the opposition power. Since we have lost that opposition power, the true information of government reality has disappeared. Media is dependent on owners, who are in a coalition set up to cover the conflict of interests. Only complete and full information makes the government transparent and only a transparent government takes responsibility.

In order to remove conflict of interests, mature democratic societies aspire to prevent it by all means, openly disclose an existing conflict, do not allow the related officials to participate in the decision of those issues, make evaluation through a third party and enforce the code of ethics. Depending on the circumstance, they take few or all of these measures.

In order to prevent the conditions for conflict of interests, public officers sell their companies or the shares related to him/her. Working for the government means serving the people. In English they say, “to be a public servant.” In Mongolia they pretend to remove their company/share ownership by transferring the title to a family member.
If public officers believe there is a conflict of interests in their position, they disclose the information at the first opportunity, through the media. This has never happened in the history of Mongolia.

If any decision in the industry is related to his/her own company, that public officer does not participate in the decision making process. It is simply not allowed. If this happens in Mongolia, the government officers will just have fewer working hours.

If there is a conflict of interest, a third party is invited to make an evaluation. It is hard to find a third party in Mongolia. In one or another way, one of the two parties merges into the third party anyway. Mongolian judiciary system is exemplary of this fusion.

The enforcement of code of ethics is the most effective tool in a society because reputation becomes most important. In Mongolia, they organize a month or a year of code of ethics campaign, which results in nothing, as usual. Yet honor must be the most important character of any statesman. Remember a Korean leader who was accused of bribery in exchange of making profit for a private company? As soon as inspections started, he committed suicide. Here code of honor works.

Mongolian society needs to create a culture of non tolerance for conflict of interests. The government itself must take responsibility over those public officers who realize such conflict of interests. Only then we can remove this terrible fungus and increase social immunity. Is it that difficult a task?

Friday, September 18, 2009

City Air

After three days of staying in UB City, my European colleague told me bluntly: “Your city’s air is seriously polluted. You almost do not have any trees.

There is too much traffic jam. I have a headache and a sore throat.” Instead of staying for the weekend as planned, she left the country earlier to stay in Beijing, “where the air is better’.

What if she came to Ulaanbaatar in the winter and not at the beginning of September? A visitor will go back; but what about us, who stay here all year round?
As the cold winter comes, we are about to sink again into the thick polluted smog. We will shout and then our city officials will choir with the same old refrain: we are supplying 20 to 30 million dollars worth of smokeless bricketes and chimneyless stoves. But the real holders of this sum escape the winter to tropical beaches overseas. Left behind, we are poisoned, with some even dead, shout then forget as spring comes, and celebrate Naadam in summer just like in the fairy tale of “The Ant and The Grasshopper.”

Actually, we know very well the reasons of air pollution. The prime reason is that two hundred thousand chimneys of more than a half of the city population’s dwellings produce smoke from not fully burned coal, tires and bricks absorbed in used oil. The next reason is two hundred thousand vehicles with “UB” license plates, half of which are banned from use in Korea and China. The last reason is a destructing and plundering governance that pretends to plan and implement.

The main tool for removing these causes in a democratic society is a government itself that represents citizens. The duty of the government is to provide normal conditions for population’s safe life. Everyone knows that the basic condition of life is oxygen. For the city with over one million inhabitants, the normal condition of air is supported by green development that includes parks, flower beds, tree alleys, bushes but not weeds. In order to create healthy air required for human activities green developments absorb carbon dioxide from the air pool and produce oxygen through photosynthesis; and humidify the air, decrease noise, protect from wind and clean the air bacteria. Needless to say that green developments bring joy to the eye and help relieve the stress.

Yet, Mongolian government, in particular Ulaanbaatar city office, is the biggest enemy of this green development. Following are only three cases to prove it.
Construction of two large hotels on both sides of our only park, that we have cultivated for many years and called “The Children’s Park,” is in a full swing behind a tall closed fence, destroying hundreds of trees. There is a wonderful park in the center of New York City where people jog in the morning and picnic in the afternoon. They can preserve the park and we cannot here. Needless to mention London and Paris, lucky them! The difference between us is that they can unite their voices while we cannot. No one is interested in what air people breathe in or whether the children of future generations will be disabled as long as a few city officials and couple of companies get rich. For Mongolian bureaucrats, the illness or death of citizens is only statistics.

While normal countries move power plants out of the city to remote areas, in Mongolia it is on the contrary: they have decided to construct the fifth coal bedded power source in Uliyastai of Bayanzurkh District. They say it is cheaper to transport coal from Baganuur Mines to Bayanzurkh District. Air pollution is not their concern because almost each of them has secured one valley around UB, where smoke does not come and the air is fresh.

They have decided to erect a new parliament palace replacing the garden north of the current Government House. Each esteemed member of the parliament would have a working and a resting rooms, assistant office and meeting lounge. The 18 storey tower would have a gym, swimming pool, sauna, restaurant, barber shop and even a television repair shop taking a total space of 33 thousand square meters. The government cost of a democratic country should be proportional to the capacity of its economy and level of citizens’ living standard. As Mongolians say, “whistle according to the size of your herd of horses.” When the form does not reflect the content, it becomes funny. So, how about moving the parliament to its proper location as it cannot make its government, the main party at fault, to solve the air pollution problem. It will be much cheaper than 20 million dollars, which is planned for the new construction, to move the 76 clowns to the Blue Circus. Give us fresh air to breathe! Clean the polluted air! Or get us a gas-mask! One and a half million gas masks are nothing compared to billions of togrogs wasted.
Dear guests of Ulaanbaatar City, if you have a strong reason to visit us in the winter, please make sure to bring with you a gas-mask.

Friday, September 11, 2009

City roads

City like a human is a living system. Just as vessels carry life sustaining blood throughout the human body, so must city roads freely transport humans and goods. If the artery gets blocked at any point, the city life, like the heart, loses its rhythm failing to function normally.

If humans and goods could drift with order and without interruption the inhabitants would be less stressed, calmer and friendlier towards each other and the city’s productivity per hour would increase accordingly. The minimum requirement for a normal traffic condition in a city is readable street signs and clear traffic rules.
Every city that has a normal life constantly works at creating this free flow and therefore has mutually supporting streets and avenues where traffic of pedestrians and vehicles are consistently in sync.

There are plans of cities that have remarkably coordinated the daily traffic of millions of people. While Paris and Washington’s are similar with the roads, radiate from rings spread around the city, almost all other American cities follow a grid system. Horizontal roads are called streets and vertical roads are called avenues. It is a simple logic that the magisterial of heating, drinking and sewage waters run underneath these streets along with the auxiliary lines. All horizontal highways are even numbered while the vertical ones are odd numbered. This whole plan is a big contribution to making the business of the city residents more productive and competitive.
Yet, how does our Ulaanbaatar city look? Saying the truth of the matter feels like poring salt on the wound. City residents’ patience is running out. Our transportation does not move forward even though it has a wheel and if it does, it jumps like a grasshopper. Reaching any destination in Ulaanbaatar city is like participating in an off road rally. After a certain time of joggling and shaking, we jump out of our car as if electrocuted with disheveled hair and half a mind. Feeling lucky that another car skimming by has not run us over, we head toward our intended direction.

Ulaanbaatar’s residents will never be able to live properly without finding out and removing the reasons behind this situation. Absence of a city plan, disastrous scales of land corruption and irresponsibility of the governing authorities are especially prominent reasons among many.
There is no planning of Ulaanbaatar city. There are only some top officials who say that there is, by looking at some false, dummy drawings on their office walls. There is no one who knows where the major roads go, when we need to check the conditions and allow maintenance. These exterminators wake up only when the road cannot be used any more, and the bridge has cracked. Their first measure is to block the road and stop all traffic and to show the mighty power of the state. They have been asking for money abroad to construct a road connecting Asia and Europe across Mongolia. Yet, in order to repair the only bridge, BayanZurkh, on this road in Ulaanbaatar city, they have diverted the traffic off road across the skirts of the Bogd Mountain. They have not prepared accordingly. The resulting traffic makes such a huge cloud of dust that it is impossible to see the front of the car. Soon this dust cloud combined with the traditional winter smog curtains will make it hard to find the city, let alone our homes.
Land corruption has really overindulged. Children’s playgrounds, city parks and other public spaces including so called protected areas have been all basically “sold out.” Now our officials have moved on to giving out the city roads. Out of thousands of cases, the road west of the Central Post Office which used to connect the Stock Exchange side road with the main avenue has now become a construction site, blocking the traffic like in “Zelter’s Trap,” from a popular Mongolian movie “Ugluu.”
In spite of many years’ strong protests of citizens against the situations described above, none of the city top executives is held responsible for these corrupt actions. As we say “goat horns never reach the sky.” Instead they keep climbing to higher positions as if worst performance gets highest award. Because the mayor of the city is not elected by Ulaanbaatar’s residents, instead nominated by a political party, he and his employees’ main purpose is to bring revenue and make donations to their own party, not necessarily to serve the citizens.
Dear Mayor,

We, the citizens of this city would like to walk and drive peacefully on our roads at anytime we need and reach our homes alive in one piece. We know and understand well that Ulaanbaatar will not be like Paris overnight. But please do perform, at least sometimes, like a real Mayor of a city should.

Friday, September 4, 2009

Property rights

In his famous book “Mystery of Capital,” Peruvian economist Hernando de Soto explained that the key difference between a developing and developed nations lies in its ability or inability to create capital with property.

A certificate of property rights or entitlement is a necessary basic factor for creating a capital from a property. A title represents a property and circulates like money because this piece of paper confirms a property’s value and its current owner, whose rights are certified and guaranteed by the government. Any financial and banking institution recognizes the certificate exactly as the property itself and gives loans and even raises money solely based on the title. As a result, circulation of properties increases and the nation’s amount of accumulated capital grows exponentially. While the property remains on its location without movement, its representation can wander anywhere in the world and makes money while the owner sleeps.

Depending on the character, property divides into three types: intellectual, material and land. Unfortunately, classic understanding regarding owner’s rights of an intellectual property is almost nonexistent in Mongolia and this subject will be discussed separately. This time, let’s look more closely at problems regarding material and land property.
Mongolian government‘s current operations intentionally create barriers and obstacles, instead of opportunities for building capital from properties. It is pitiful that because government authorized organizations reciprocally negate each other, two ministries of the same government have to sign an agreement to coordinate their business. Let’s look at concrete examples of the capital city.

In Ulaanbaatar, boundary distinctions between a private and a public land property do not exist. As a result, it is up to some political party official, who may separate or unite the building owner’s rights from the land owner’s rights, to give or not give a property title and rights to one or the other individual. Where authorities change in the party’s name in however way the property rights and title owners, a group of few people have become accustomed to plunder a long time ago.
The capital city’s many buildings are constructed and keep being constructed by the dozen on public land including children’s playground space, pedestrian roads and flood dams. As a result, another public authority refuses to give permission for operation of those properties. In addition, once the construction has started, citizens who believe in public governance prepay to reserve a residence in the new building. When the construction is complete, they move in but cannot get title on their property.
At the moment, a whole district with a large shopping center and an apartment complex for thousands of families that is constructed on the source of drinking water for the city, is awaiting its sales on the market. Its future residents will clearly not be able to receive their title on their properties.
Furthermore, residents of apartment buildings which were constructed and sold under the so called “tourism development purpose” in Zaisan valley of Bogd Mountain’s supposedly national protected area, have still not received their titles of property although they have been living there for already a few years.
Political election is the only hope for residents in any similar situation dispersed throughout the city. If any incumbent boss with a strong political power campaigns for parliament election, as an accepted standard, s/he makes sure that their political party gets those titles signed by related authorities. “In general you cannot, but if you prove that you really want, than it is possible,” is the principle of Mongolian public governance.
Because citizens cannot get titles on those properties they paid for with their lifelong savings, so much property is blocked and cannot circulate in the economy to get a “life” of its own.

Since there is no title on properties, there is less chance to get a proper market assessment; the owners cannot exercise their property rights and even receive insurance services. Since they cannot insure against fire and flood, the costs of risk management soar. Just recently during the flood, basements of Zaisan valley’s newly constructed residential houses overflowed with water and permanently damaged many expensive cars. Residents of the new apartments with leaking roofs, walls grown with fungus, and no heating system also share the same luck. Because there is no legal basis to make assessment and it is not clear who owns the property, the government is not able to collect property taxes up to 2 per cent of its market evaluation. When there is no such tax on that property, its maintenance and related services are barely done with the money collected from residents and not by the city administration.
Because the government does not guarantee the citizens’ creation of capital with their own properties, the people are poor and the government continues to ask for assistance from foreign countries every year trying to meet ends.
The main gateway to development is by making sure that every property has a title and an owner who is responsible for that title.