Categories
Government Finance

UN, G20 and the Dollar

Dollars ! / Photo: pfala, Flickr
Dollars ! / Photo: pfala, Flickr

In the August 2009 ISN Special Issue entitled “Redesigning Global Finances- The End of Dollar Dominance?“, I asked whether the window of opportunity to redesign the global financial architecture has already passed with no real progress having been made. This week, the UN Trade and Development report was published, calling for a “new approach to multilateral exchange-rate management to complement stricter financial regulation.” Their critique of the dollar system contains the usual arguments: it is prone to fluctuations, creates current account disequilibria and requires poor countries to create huge reserves better used elsewhere. To mend this, they suggest nothing less than a new Bretton Woods system. Accordingly, it would be based on managed flexible exchange rates at sustainable levels, thus making great fluctuations and currency crisis a thing of the past and level the playing field for international trade. The report is interesting not because it contains revolutionary new ideas, but because a UN agency officially calls for alternatives to the dollar system.

Categories
Security Business and Finance

Prisons and Profit

Wallens Ridge State Prison /Photo: dombrassey, flickr
Wallens Ridge State Prison /Photo: dombrassey, flickr

Once upon a time, prisoners used spoons stolen at lunch to dig their way to freedom. Today’s prisoners seem to have found more comfortable methods. They prefer private helicopters to fly elegantly to freedom, as did one of Belgium’s most dangerous criminals, Ashraf Sekkaki, together with two other inmates. Apparently the aircraft was in the prison courtyard for five minutes without even encountering a guard.

Since the procedure was not as cheap as old-school methods, the trio was probably in dire need of money: Only a week after their escape, the three were suspected of having robbed a bank, a gas station and two storage facilities – all within two hours.

Their helicopter escape was not an original idea though. It seems to be a general trend in Europe, with 14 cases in the last eight years, mostly in Belgium, France and Greece. The three Belgian fugitives add to 36 others in their country alone – since the beginning of this year.

European prison services blame not only lax controls at tourist chopper rentals, but also their lack of funding at correctional facilities. There’s not even enough money to erect simple iron cables to stop choppers from landing.

Policymakers could be tempted to look across the Atlantic for money-saving, and even profit-making, solutions. With more than 2 million prisoners (more than 1 percent of the adult population) the US has found a way to create a recession-proof multimillion dollar industry out of incarcerations.

Reuters last week reported that the share price of Corrections Corporation of America has more than doubled since March. The company, which provides about half of America’s private ‘corrections solutions’ (or prisons, as they were once called) and has 77,000 beds on offer, cuts a profit of about $22 per inmate per day. Incoming CEO Damon Hininger says he would “love the opportunity” to take some of the 40,000 prisoners that must be transferred from overcrowded California prisons.

In other cases, the industry has taken a more direct approach to increasing its client base:

The Guardian reported that “[T]wo judges in Pennsylvania were convicted of jailing some 2,000 children in exchange for bribes from private prison companies.” Some of the offenses were “so trivial that some of them weren’t even crimes.”

With such worrying prospects, I hope that Belgian prison services will find other ways to deal with their lack of funding.

Categories
Social Media Government Internet

Amend the Constitution from Your Living Room

Screenshot: http://constituicao.wikispaces.com/
Screenshot: http://constituicao.wikispaces.com/

While the Web is upgrading to version 3.0, e-governance seems to be trapped in an eternal beta phase. A seemingly simple step like using electronic voting stations is still considered a great success wherever applied. But even more common are decisions to simply leave elections analog and offline.

But if you cannot bring the government to the people, you might bring the people to the government. An interesting initiative to bring governance and online technology together was launched in Portugal in July. The Institute for Portuguese Democracy (IDP), a Lisbon-based political, nonpartisan think tank has opened a website that allows users to use a wiki to draft the country’s constitution as easy as an article on Wikipedia.