Brazilian Infrastructure Programme ‘Projeto Crescer’: Another example of a Corruption by Design Policy?

Projeto Crescer

About two years ago I developed a research about PAC, the Brazilian “Big Push” infrastructure policy. Launched in 2007 by President Lula the purpose of PAC was to unlock growth by developing the infrastructure of the country – a clear “infrastructure-led development” approach.

More than tackling the infrastructure gap alone, the theory of change of PAC also included other broad – and ambitious – objectives, such as income and employment generation, reduction of regional and social inequalities and macroeconomic stability.

In 9 years of execution PAC consumed roughly BRL 2.3 trillion in federal funds (according to the reports of SEPAC – the Secretariat of PAC). Massive projects that you may have heard of, such as Belo Monte, Jirau, Santo Antonio, Abreu e Lima Oil Plant, the integration of the São Francisco basin, were executed within PAC. No doubt a colossal policy intended to tackle several infrastructure gaps at the same time and with a decentralised execution of projects spread all over the country.

My research identified policy issues in many areas of the design of PAC. This included (i) a failed monitoring structure that did not allow a proper supervision of the projects; (ii) funding rules that created the incentive for over-spending; and (iii) unclear eligibility criteria which stimulated the political and electoral use of the program. In my analysis the grey areas in the policy design opened opportunities for corruption and would help explain the cyclical pattern of corruption that seems to be installed in infrastructure in Brazil. The full research is public available for consultation.

Recently the research came back to my thoughts. Late September I had the opportunity to discuss the subject with a group of professors from the Pontificia Universidad Católica do Peru and with a wider audience during the XII Conference of State Reform in Lima, which focused on anticorruption policies. One of the topics was corruption by design with a comparative analysis of Brazilian and Peruvian case studies in infrastructure.

This week it happened again. The media headlines about the release of Marcelo Odebrecht from prison forced me to take stock of my research. More than considering how PAC’s incentives may have changed after the government transition and the many budgetary cuts, I was particularly concerned with the cyclical pattern of corruption referred to above. My recurrent thoughts were whether new infrastructure policies implemented after PAC could be under similar perverse incentives for corruption.

It didn’t take me a hard policy mapping exercise to find a bright new and shining infrastructure program started after PAC. The ‘Investment Partnership Program‘ (or in Portuguese ‘Programa de Parcerias de Investimento – PPI’) started in 2016, implemented by the Federal Law No. 13,334. The catchy name used to advertise the program is ‘Projeto Crescer’ – the Growing Project.

According to the information available in the program website, PPI was created by the Federal Government to articulate investments in infrastructure using partnerships with the private sector. The intention is to promote a new influx of investment to be channelled through concessions, PPPs and privatisations.

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Source: http://www.projetocrescer.gov.br/about-the-program  – Access on 8.12.2017

Transparency and efficiency are used as core policy slogans – in a similar manner as employed by the Decree No. 6,025 that implemented PAC in 2007. And the theory of change is also very similar to PAC with a focus on big objectives of employment generation and economic growth.

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Source: http://www.projetocrescer.gov.br/the-10-guidelines1 – Access on 8.12.2017

Based on the available information, it seems that 146 projects were included in the program so far. Projects are as diverse as railways, highways, airports, ports, energy, mining, oil & gas, to be subject of partnerships and concessions all over Brazil.

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Source: http://www.projetocrescer.gov.br/projetos1 – Access on 8.12.2017

Just to give an idea of the volume of investments involved in the PPI, only one of the projects – an integrated highway in the south part of the country – has an estimated budget of BRL 8.5 billion (Rodovia de Integração do Sul – (BR-101/290/386/448/RS).

According to the Law No. 13,334, the Secretariat of the PPI will be in charge of coordinating, monitoring, evaluating and supervising the actions of the Program – a role that seems very familiar to the mandate of SEPAC under PAC.

The eligibility for the program seems unclear. Article 1 of Law No. 13,334 adopted a broad wording that pretty much admits to the program any public infrastructure project provided that it is structured as a concession, a PPP or a privatised venture. Looking at the implementation level, the Presidential Decree No. 9.059/2017 only listed the projects that were appointed by the President as eligible to the program but without considering the reasons why such projects qualified.

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The same is seen in some resolutions from the Committee of PPI which submitted projects to the approval of the President. Again there is no consideration of the reasons why they qualify. It is only mentioned in the PPI website that the Committee is composed by a “highly technical staff“.

Since the program is new and the projects are mostly in the bidding and contract design stage, monitoring reports are not available at the moment. It is also yet to be seen how the Secretariat of the PPI will develop its ‘monitoring and supervision‘ attributions.

Of course there are crucial differences between PAC and PPI; the main one is the fact that PPI puts the execution of the projects outside the public arena. But opportunities for corruption can still emerge. In a moment when the country tries to recover from a series of traumatic events involving corruption in the infrastructure sector, it is necessary to avoid the mistakes of the past and create policy designs that stimulate integrity, real (and not only slogan) transparency and embedded citizen accountability. I really don’t want that PPI becomes my next case study about corruption by design.

 

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Resilience in the face of natural disasters

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In the past few weeks the world’s attention turned to natural disasters and the losses they cause. Hurricane Harvey in South Texas; floods in India, Bangladesh and Nepal; Hurricanes José and Katia in the Gulf of Mexico and the destructive power of Irma in the Caribbean and Florida sent a clear statement that the effects of climate change haven’t gone unnoticed.

Although there is still a gap in research to clearly connect climate change to these events, some correlation can be drawn between the rise in global temperature and the violence and intensity of storms and floods. Warmer oceans and warmer air generate extra moist and energy to feed hurricanes – and the elevated sea level is prone to cause inundations.

If addressing the root causes of climate change may require an international collaboration between States in order to secure and enforce cooperation agreements, dealing with the impacts of climate change may be achieved by means of community effort. As put by Dr Katrina Brown, from the University of Exeter:

“People are at risk because of the impacts of climate change. But, actually, how that impacts on people is also dependent on the ways that communities build resilience”.

Resilience is the capacity to react to shocks and crises. More elaborately, it is “the ability of people, households, communities, countries, and systems to mitigate, adapt to and recover from shocks and stresses in a manner that reduces chronic vulnerability and facilitates inclusive growth” (USAID, on page 5).

Humanitarian response is the immediate short-term attempt of resilience that follows a natural disaster. In this case, time is of the essence. A timely prompt response is essential to provide the necessary support to help the victims to bounce back.

On a previous post I mentioned how technology can advance development issues (the ‘tech for good‘ movement) and disaster relief is a clear example. Right after the events, GlobalGiving set up electronic relief funds for Hurricanes Irma and Harvey, for the South Asian flooding and for the Mexican Earthquake and Hurricane. With the power of a mouse click the entire world is now able to support the affected communities. Donations are channeled to vetted local organisations that will help build resilience from the ground-up and even after the disaster is no longer portrayed in the cover page of the news.

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Source: GlobalGiving website

Another form of resilience building is to focus on the long term horizon. There are many strategies that can be followed, but I would like to emphasize one particular experience also related to climate change: the development of innovative climate insurance tools.

This includes parametric insurance products that uses objective indexes (such as the amount of precipitation, for example) to assess losses and to pay indemnity associated with natural disasters. Under these products cover is triggered either by excessive rain (leading to floods, such as in the recent episodes in India and Houston) or excessive drought. The presence of a clear-cut parameter to authorise payments eliminates long and costly adjustment proceedings, two characteristics to run against prompt resilience.

Parametric coverage is reported as being currently used by Spanish olive growers, members of the Agricultural Association of Young Farmers. Through a web-based underwriting and pricing platform, their harvest is protected against weather fluctuation.

The Global Index Insurance Facility is another example of a parametric product. It is operated by the IFC and the World Bank and has insured a total of 1.3 million farmers. As described by the IFC: Index insurance is an innovative approach to insurance provision that pays out benefits on the basis of a pre-determined index or loss of assets and investments resulting from weather and catastrophic events, without requiring the traditional services of insurance claims assessors. It also allows for the claims settlement process to be quicker and more objective“.

Climate insurance tools have recently appeared on public policy debate. Last month, the Indian Ministry of Finance and Department of Economic Affairs released an Economic Survey which suggested the adoption of Catastrophe Risk Pools (CRP) to handle climate losses in the country. The idea is to create new forms of financial resilience to complement the immediate humanitarian relief after the disaster: “Innovative products supported by risk models and reinsurance pools can provide huge opportunities to the insurance industry in India. One such model is that of Catastrophe Risk Pools (CRP) that aim to put the focus on proactive financial planning to deal with adverse impacts of natural disasters, instead of relying on fund-raising efforts after disasters, resulting in reduced economic losses as well as lowering the impact of disasters on the national budget. Financial instruments used in creating these could include contingency funds, contingent loans, grants, besides other risk transfer solutions” (on page 133).

The recent events expose the fragility of human beings against the violent forces of nature – something that Freud mentions as one of the causes of constant suffering of humanity. It also evidences the need of building resilience mechanisms to face those disasters. While the root causes of climate change are not tackled by countries, community efforts, as varied as GlobalGiving’s platform and the new insurance products, remain paramount. If the chart below with natural loss events until 2015 is worrying enough, imagine when Harvey, José, Irma and others are included.

Natural Loss Events Worldwide 2015 – Geographical Overview – Harvey, José and Irma yet to be included

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Source:
https://www.ifc.org/wps/wcm/connect/d6407581-5ad1-4144-abe2-df06e5f3168c/Note-9-EMCompass-Innovative-Insurance-to-Manage-Climate-Risks.pdf?MOD=AJPERES

*** If you want to donate to the victims of the hurricanes and floods, here is the link to GlobalGiving relief funds:

After the donation, you will receive continuous follow up informing how your money was used.

 

Third-Sector Fundraising: doing more with less

Third sector organisations are diverse in size, objectives and strategies, but securing funds to carry out the work they do is certainly a common concern that unites the entire sector.

In fairness, even private sector companies face funding concerns. But if private companies have available resources to spend on expensive marketing and business development activities, charitable and social organisations are more limited in the ways to overcome funding challenges.

This doesn’t mean that the third sector is condemned to poor fundraising strategies. Based on my experience in the sector, I outline below some ideas to help organisations to improve their fundraising processes and initiatives.

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First, it is key to get a system in place to list and control the potential sources of grants available to your organisation. This can be as simple as an excel spreadsheet. The purpose is to map the ‘land of opportunities’ and the options that can be explored by your organisation. But building the system is not enough. It is also relevant to currently update it so that no opportunity is missed. A good starting point to build your fundraising source system is the “Funding Central” website: this is a UK platform that offers an easy and user-friendly guide to help funding searches. By providing the characteristics and profile of your organisation, Funding Central matches your organisation with potential sources of grant. There are local, regional, national and overseas funding opportunities available, with contact details and deadline information, so it can be used not only by UK-based organisations. And it is for free.

Be creative in the ways to design your fundraising strategy. Big grants, such as the Big Lottery Fund, the Trust for London or government funding are targeted by a variety of organisations, which difficult the access to them, particularly if your organisation doesn’t rely on a dedicated and experienced team of grant writing. Creative and original approaches are welcome and should be stimulated. Just to give an example, I recently noted that various UK trusts haven’t digitalised their activities yet. They still use paper-based funding applications to support charitable work and their activities are normally carried out through personal contact and postal service. These applications can be more challenging and time-consuming to complete, but they can provide your organisation with a more diverse portfolio of funding sources. Another example of a successful and creative fundraising campaign was the well-known Ice Bucket Challenge which went viral in 2014, resulting in more than USD 100 million raised in 30 days. Thinking outside the box and not being too attached to what has been customarily used by similar organisations may be key to stand out in the crowd.

Fundraising is also a combination of activities. So focus should be divided between searching and filling grant applications, but also on outreach activities that will help to raise awareness of your organisation. This can range from creating ‘Ambassador Programs’ that elect members of the community to represent the “voice” of the organisation, to other forms of community engagement to stimulate peer-to-peer donations that often results in higher donation rates. Social media is also a powerful source to spread content about the work carried out by your organisation. A successful example that I recently saw in practice concerns the charity I volunteer in Brent, named WoRC, dedicated to assisting London’s migrant workers trapped in precarious work. Last May one of WoRC’s employment specialists participated in a live session providing clarification on employment rights to the Romanian community in London. The video was shared on social media and reached almost 20,000 views, which was considered a landmark for a small local charity as WoRC.

Also relevant is to get your data ready as this is the best compelling evidence to support your fundraising activities. If your organisation doesn’t have an appropriate database to collect the information, start one. As much as the fundraising system mentioned above, the data collection system is of key importance and will be relevant for funding and advocacy activities. Use infographics (there are several free platforms online to help you create one) and personal testimonies (if authorised by the beneficiaries) to get your message across and to show the impact your organisation creates in real lives.

Last but not least: transparency is fundamental. A recent piece written by the UK CEO of GlobalGiving, Eleanor Harrison, focuses exactly on the need for radical transparency to regain trust in philanthropy, through sharing our successes and our failures”. Another way of achieving transparency is to treat your donor as your shareholder. It is true that the donors will not receive a monetary return on the investment made, but they do expect to be treated with honesty and be informed on how the donations were used. Implementing continuous feed-back loops to follow up and update donors is essential to create the trust that is fundamental to secure funding.

These are just few ideas I collect from my own experience in the sector. If you want to collaborate with third-sector fundraising and don’t know how, the Network and Researchers and Consultants for International Development offers a platform that connects grassroots and volunteers interested in helping organisations with technical assistance and grant writing. It can be a starting point for volunteers and a huge step to help grassroots to do more with less.

When supply meets demand for volunteering

The first week of June was dedicated to celebrate the work of millions of volunteers across the UK. Similar celebrations are seen in other countries: the National Volunteer Week in Australia, Canada and Scotland; and the Obair Dheonach Éireann in Ireland, for example.

It is impressive how much work is done in the third sector through volunteers. The figures speak for themselves: GlobalGiving UK has a ratio of 10% staff to 90% volunteers. Citizen’s Advice reported that in 2016 “volunteers gave an estimated £114m of worth of time“.

Volunteering can serve many purposes. It can be a stepping stone to enter the development sector. I recently had the opportunity to listen to Bo Sundström, head of EU Programmes & Finance at the UK Department for International Development (DfID). He was a guest speaker at a training event for the GlobalGiving Evaluation Program in June.

He explained that his career started as a financial controller in Sweden, but he managed to volunteer as a ‘side career’. From the controller position, he transitioned to a brilliant path in international development, working for the Grameen Bank in Bangladesh, before joining DfID. He did not say that, but my interpretation of the facts was that his previous work as a volunteer was a key factor to a smooth job transition.

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Photo by Rebecca Rees

Volunteering is also a way to really get to know a country. Tom Ashcroft, a GlobalGiving Evaluation Program alumni, used his blog to share his views on how volunteering afforded him a chance to “really get under the skin of a country” combining travelling with “a greater sense of purpose“. After staying in Kenya and India, Tom has recently arrived in Mongolia to volunteer with a nomadic family.

If you are not intending to join the development world, or to live among the nomads, volunteering is still a valid option and combining your daily job with activities that can make a difference to non-profits is possible.

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It is true that today many companies do have their own volunteering and community ‘outreach’ programs. Law firms normally run pro-bono activities, tech companies tend to support programming courses and financial institutions sometimes provide mentoring to SMEs. However, although there are many people willing to donate their time and skills, my impression is that there is still room for improving the ways volunteering can be more ’embedded’ in our daily careers.

In fact, it is almost funny to note that there is ‘supply’ and ‘demand’ for volunteering, but they seem not to fully meet. A report produced by the research and creative agency ‘Achieve’ in 2015 measured the volunteering potential of millennials – which comprise the age group born between 1980 and 2000 – and concluded that they are not only open to volunteering (something like 70% of millennials volunteer their time each year), but they would do so particularly if they could leverage their skills during the experience:

“Most Millennial employees volunteer between 1 and 10 hours a year. These are employees who will get the most from programs like company-wide days of service. Since we also found that Millennial employees are more likely to volunteer if they can leverage their skills or expertise, companies should incorporate skills-based volunteering to increase participation and maximize the value of the volunteer experience”

There are many ways that your ‘career skills‘ can help to match supply and demand for volunteering. Take the private sector for example. An auditing company could support charities with organising and providing them with independent financials. Considering that most funding applications require at least independent audit reports, this is a real need for many non-profits. Bankers could use their knowledge to help designing microfinance programs or to give valuable insights to social business concerning long-term sustainability. Insurers could help building resilience to non-profits and their recipients by developing new products, such as micro-insurance for example, that are more tailored to the reality of the third-sector. Lawyers are crucial to secure access to justice and, in today’s digital world, marketers and communications professionals are essential for social media impact and online brand awareness.

Doing fundraising for a charity, I soon learned that we should always be on the look out for potential partners for the charity. It is something I referred to in my previous blog: mapping your network so you can identify potential donors or partners that your organisation can benefit from. But why not reverse the reasoning? Why not expect from private companies (and universities as well) to do the same and identify local organisations that need support and research? There are many ‘transferrable skills’ used in our daily careers that can transform the realities of small charities and organisations. Making this strategy consistent, not promotional and part of the ‘business as usual‘ would really embody the purposes of corporate social responsibility.

If you want to kick-start yourself, there are plenty of opportunities to volunteer remotely. The UN keeps an online platform with various opportunities, ranging from translation services, research, art & design, strategy, technology development and marketing, just to name a few. It is just a matter of applying. By doing so you will help ensure that supply meets demand for volunteering.

Network mapping and a brave new world

To say that everybody is connected seems almost commonplace in today’s global and integrated world. Internet, social media and smart devices created a level of connectivity never seen before. It is a ‘global village’ of 7.5 billion people wirelessly linked.

But, if it is true that we stay on-line virtually all the time, it appears that we may not be using communications technology to their fullest potential. One thing is to use the internet to stay in touch with friends, to follow your favourite celebrity, or to advertise and buy on-line. A different thing is to use technology and communications tools to enhance the power of human networking.

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It was Eleanor Harrison, CEO of GlobalGiving UK, which opened my eyes to this potential. During last training event for GlobalGiving Evaluation Program, she explained how charities and small organisations face major challenges to raise funds and to stand out in the crowd. It is to overcome these challenges that our field visits to grassroots NGOs will include the application of a tool called the ‘Network Mapping’.

The name is pretty self-explanatory: it consists of mapping all the contacts of your network. The idea is to identify all possible interactions that a person or organisation can have, starting from immediate names (1st level networking) and growing into contacts of contacts, and so on (2nd and 3rd-degree contacts). The purpose is to see ‘beyond the surface’, being able to pinpoint new contacts and to connect them with areas of shortage within the organisation.

The impact for fundraising is obvious as the mapping identifies new potential donors. But it also allows the organisation to develop different strategies for growth based on opportunities uncovered and new sources of skills, expertise and influence identified in the network.

With technology, creating a network map is much facilitated. Facebook and LinkedIn offer a starting point to identify valuable contacts, not to mention that online platforms even provide the structure for drawing the map. The website Bubbl, for example, helps to brainstorm, using bubbles and arrows that help the mapping process.

Working in the private sector for so long, I used to think of networking always in terms of potential new clients. But in actual fact, after the map is done, the networking potential is much greater, uncovering new opportunities and resources that were apparently non-existent. The process of doing your map even leads to a ‘self-discovery route’, where it is possible to create interactions between people and organisations that would never encounter, opening new networking circles. Quoting a recent article that I read on career networking, you can introduce people who would typically never meet and unlock value for everyone“.

The network mapping also contributes for development policies. The International Food Policy Research (IFPR) uses a similar tool – the ‘Net-Map Method’ – to design participatory policies, ranging from nutrition-related programs to climate change. According to the Eva Schiffer, who developed the tool for the IFPR: “Net-Map helps people understand, visualize, discuss, and improve situations in which many different actors influence outcomes. By creating maps, individuals and groups can clarify their own view of a situation, foster discussion, and develop a strategic approach to their networking activities“.

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Source: Eva Schiffer blog “Net-Map Toolbox – Influence Mapping of Social Networks” 

So, whatever the purpose you have in mind – fundraising for your charity, assembling contacts to raise your personal profile, identifying new opportunities for growth, or designing a participatory policy if you are a policy-maker – the true is that it all starts with exploring your human network.

I am currently preparing my own map, making the most of Facebook, LinkedIn and social media. So, thank you Eleanor for showing me this new form of ‘networking capital’. It is a new world indeed.

A Green Light

I don’t see myself as a tech-geek. In the ‘technology adoption lifecycle’ curve, I would probably be within the 68% majority, sometimes in the ‘early majority’, sometimes in the ‘late majority’. But, I would rarely be in the 16% of innovators or ‘early adopters’. Not because I don’t like technology or that I resist change and evolution. I just need assurance that the new technology doesn’t arise to cause more harm than good. And assurance comes with time and the knowledge gained from the experience of the 16% in the front-end.

Being in the majority does not make me less appreciative of technology. On the contrary; I really enjoy seeing how technology changes (and shapes) people’s habits and behaviours. I believe that technology holds an immense potential to be an unprecedented driving force of institutional change. 

Say for example the digitalisation of courts and how it has improved values of openness and transparency. In Brazil, for example, the average citizen can watch the depositions being taken in criminal lawsuits under the Lava Jato operation.

This is part of the ‘tech for good’ movement that intends to use technology to tackle social and economic challenges. Or, in sum, ‘to do some good‘. I remember an LSE Professor, Silvia Masiero, now at the Loughborough University, telling us successful experiences of using information and communication technologies (ICTs) to manage humanitarian emergencies. Or other cases of how mobile phones were used to reach financial inclusion.  

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Recently I started looking into crowdfunding experiences and how it changes old development concepts. This is how GlobalGiving came to my attention. Working as a global crowdfunding platform, GlobalGiving makes possible for grassroots organisations to be seen and, as a result, to gain an additional source of finance.

I really like the idea of using crowdfunding for development purposes. The reason for that, I believe, is because it challenges the idea of aid. Yes, with crowdfunding initiatives ‘aid’ is no longer only achieved by means of big multilateral organisations which nobody (or almost nobody) can access or participate. 

Please don’t get me wrong: the World Bank and other multilaterals are still important international players in terms of aid, development and policy research. But what I consider a game-changer in GlobalGiving model is that it puts the individuals in the ‘driving seat of development’.

I will explain: looking into the GlobalGiving website, I could see the real stories and needs behind the projects available for funding. And seeing the power and the positive impact that crowdfunding can have for such projects, I felt empowered. I realised how you and I can make a real difference for local development projects and for individual trajectories. It is technology changing the traditional concept of aid. 

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This blog was created to follow my participation in GlobalGiving’s Evaluation Program, which started in March and will finish in October with an in situ placement with GlobalGiving’s partners in Cambodia. 

I couldn’t be more excited with the whole experience. As a ‘majority’ in the technology cycle, I am assured that crowdfunding has real benefits. It is technology linking people and causes for development. 

Well, the light is green. Let’s move!