Wednesday, August 31, 2011

Burden of Compensating Retired Public Officials: Can the Country Afford?

The list of retired or redundant public officials claiming compensation from the public purse grows by the day.  The high profile of these officials led by the former President Daniel arap Moi, Vice President Moody Awour includes judges who opted to retired with full pension after the 2003 judicial radical surgery, former Members of Parliament, and former Kenya Anti-corruption Commission Aroan Ringera and other commissioners. Within the new constitutional dispensation, many judges will be retired, the current KACC director and commissioners have been shown the door, many MPs will lose their seats in the coming election, not to mention the President will retire, and who knows the Prime Minister and the Vice President may too retire or might not be elected back to public office. Then there are judicial officials and judges due to be retired according to the current constitution vetting requirement. The list goes on especially when we include lower profile officials like permanent secretaries. Can the country really afford to foot the monetary compensation bills for all these officers?

If the current trend continues, the country will drown under the bills of compensation. It is, therefore, important to rethink and restate the essence of public service. Does public service entitle the holder of an office unmitigated pecuniary advantage? Can the public afford to pay exaggerated compensation to these officers as the private sector does? Sometimes the money is being paid for services not rendered as in the case of compensating one for the remaining term of contract. Should officers who leave office and subsequently find new employment or are self-employed continue to draw benefits associated with their former employment? Isn't it a case of double payment to compensate such officers? I raise these issues because it is important to have debate on the matter. Just think about the current issue of compensating the MPs so that they can pay taxes due according to the law. Can the country afford this waste of public resources?

In Norway, the practice is that officers who leave their office because of retirement, change of law or government, do not get unmitigated compensation. Those who retire are entitled to retirement benefits just like any other worker during their retirement. The retirement benefits are calculated not according to your office but the number of years you served and the points you accumulated during that period. You do not get anything beyond what you have not earned for your retirement. If you retire and then get a new job elsewhere, you cannot continue to draw your retirement benefits at the same time as you get a salary from your new job.

Where public officials leave office due to change of law or government, such as cabinet ministers or MPs due to new election, they do not get exorbitant compensation. The practice is that they continue to draw their salaries for a limited time period or until they find new employment whichever comes first.

In 2010, the National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økomrim) prosecuted two former MPs, Conservative (H) MP Anders Talleraas and ex Centre Party (Sp) MP Magnus Stangeland for illegally drawing a total of over three million kroner in pensions, because they had well-paid jobs at the same time. It also claimed the two failed to give Parliament’s Pensions Board (Pensjonsstyret) proper information about their incomes, which would have meant losing their right to receive a so-called self-awarded “golden pension”. Gro Harlem Brundtland, a former Prime Minister, was herself part of a group of six who received a higher pension than they were entitled to at the time, however, she paid back what she had received voluntarily several years before the case exploded in the media in 2008. She later testified in the case involving the two. They were found guilty and received custodial sentences of 6 months and 60 days, respectively.

The former Prime Minister was also involved in another controversy after receiving an operation for cancer in 2002 at Ullevål University Hospital. In 2008, it became known that during 2007 she had received two treatments at Ullevål, paid for by Norwegian public expenditures. She had previously notified the Norwegian authorities that she had changed residence to France, and as such she was no longer entitled to benefits of Norwegian social security. Following intense media attention surrounding the matter, Brundtland decided to change residence once more, back to Norway, and she also announced that she would be paying for the treatments herself.

Isn’t it a high time that the public were informed the true figures involved in these compensation schemes? The Treasury through the Minister of Finance should give an official statement to parliament on the matter. The media should too carry out its own investigative research on the matter for public information.

See related view:

Compensation: Since when didpublic office become property of incumbents?

Sunday, August 21, 2011

Kenyans for Kenya: Recapturing the Spirit of Harambee!

The initiative “Kenyans for Kenya” is an effort by ordinary Kenyans and business corporations to aid Kenyans suffering from hunger and malnutrition in Turkana and North Eastern parts of the country.  It is based on a simple concept: “For as little as Ksh 10 you can save a hungry child from death. Together, we can save many lives. Take action today.” It urges Kenyans to - Pick up your phone and send your donation to M-PESA PayBill 111111 or KCB account No. 1133333338.

Already, the initiative has received over Ksh 650 million in cash, kind and pledges. The target,which originally was Ksh 500 million was extended to Ksh 1 billion. The initiative has been hailed as the most successful Kenyan humanitarian movement by Kenyans for helping fellow Kenyans in need. And, indeed it is. Since independence Kenyans have never shown so much generosity. Nevertheless, the spirit of giving and being my brother’s keeper is not new to Kenyans. The free “Harambee Spirit” emerged immediately after independence and was based on the same simple concept of communities joining hands to solve their local individual and common problems: such as providing a shelter for a needy neighbor, education for needy neighbor’s child, to providing education and health to communities through Harambee schools and Harambee dispensaries and health care centres. The spirit extended to other aspects of daily lives of the people through Harambee projects addressing different problems such as food, water, roads, land purchases and infrastructure.

From its inception, Harambee was free and voluntary. Such was the beauty of the Harambee Spirit before it was high jacked and made compulsory by the political class in the 80s and 90s. The political class, which was now competing against each other, measured ones generosity by how much you coughed out during Harambee fund raising rallies. This completely alienated common Kenyans from the Harambee as they felt intimidated by the volumes of cash contributed by the politicians.  To involve the public, the administrative authorities – chiefs, district officers (Dos), district commissioners (DCs), provincial officers (PCs), heads of departments and even Permanent Secretaries – compulsorily collected money from government employees and members of public who sort services from these officers. The free and voluntary spirit of Harambee was hence dangerously violated.

In my opinion, the novelty of the initiative “Kenyans for Kenya” is the recapturing of the Free and Voluntary Spirit of Harambee and restoring it back to its owners – the public. The technological solution of Mpesa is Godsend as it has enabled Kenyans to contribute freely and voluntarily the amount they have and wish to give. Indigenous corporations such as Safaricom, KCB, Kenya Airways, Equity bank, media houses, etc and humanitarian organizations such as Red Cross need our support as they are true partners for our social and economic development. I don’t mean by this to discriminate against foreign corporations that too play an important role in our social and economic development but I am only re-emphasizing the saying that “charity begins at home”. By taking charge of our affairs, foreigners can only join us to help us achieve our goals at our own terms and they will not set the agenda for us.

Together we can change the face of Kenya from one of poverty to one of prosperity. Take Action Now and donate to  M-PESA PayBill 111111 or KCB account No. 1133333338.

Tuesday, August 02, 2011

Scenes of Hunger, Scenes of Plenty! - What Solution?

Extreme Hunger in Turkana
What a contrast? While some parts of Kenya, particularly Turkana and Northern Eastern province, people are dying of hunger, in some areas in the country farmers do not know what to do with bumper harvest that is rotting in the farms and fed to livestock. Why should a Kenyan die of hunger while food is in plenty in other parts of the country? Well, the weather cannot be blamed this time round. Distribution logistics seems to be the culprit. The current hunger problem could easily be solved with the movement of food from areas with plenty to those that are in need. However, the big question is how to achieve that? In a normal situation, the market should be able to facilitate the movement of food to areas with high demand. However, from two perspectives - the Market and Humanitarian perspectives - this is not happening seen.

Rotting Cabbages and Potatoes in Central Kenya
The market operates on demand and supply principles. In the areas with high supply, the demand is low. That is why the food is left to rot or is given to overfed livestock. On the other hand, in the areas with high demand, the supply is lacking. That is why people are dying every day. From an economic and market perspective this is not a problem because the food should be able to flow from the areas of high supply to the areas of high demand. So what is the missing link?

In my opinion, the missing link is what I call lack of "distribution stimuli". A stimulus is something that rouses or accelerates action, feeling, or thought. It’s also something that provokes response. For the market to respond, hunger and death is not enough. The market is roused by the opportunity for monetary and economic gains. This is absent in a situation where the people dying of hunger lack purchasing power. Hence, from an economic and market perspective the problem of distribution is basically the lack of purchasing power. Of course, other factors such as insecurity and lack of infrastructure may play a role in hindering distribution but these are secondary and not primary. The purchasing power of the people living in the regions afflicted by hunger should be boosted in order to stimulate distribution. If there was money to make, merchants would quickly find a way to take food into these areas.

Lack of purchasing power condemns the people of Turkana and North Eastern of Kenya to the vagaries of humanitarian aid. It is a character of humanitarian aid not to move into an area before a catastrophe has happened. Before pictures of malnutrition and dying children and women flash around in the media, humanitarian aid will not mobilize. At the same time, the government will deny any presence of a crisis and the scale of humanitarian organizations’ response remains low. When humanitarian aid moves in, at last, the situation is usually out of hand. This is what is happening in country today. Humanitarian mobilization is in high gear but for many it comes too late.

When a crisis occurs, immediate humanitarian action is necessary to avert a serious catastrophe in the short-term. However, a long-term solution should be economic empowering for those affected so as to increase their purchasing power and stimulate distribution.