The successive revelations about waste of EU funds and occasional malpractice have clearly damaged the public image of the Commission. Most recently the Commission has been accused of misusing funds earmarked for humanitarian aid, emergency reconstruction assistance in the Balkans and other development programs.
To be fair, some media reporting about waste and corruption in the European Union has been grossly exaggerated. But the Commission’s own attempts at self-defense in the face of the media onslaught have been pathetically inept. It has failed to play up the encouraging findings of the EU’s financial watchdog, the European Court of Audit, which found that criminal fraud in EU institutions is minimal–and no greater than in most national member-state administrations. Though the Court of Audit pointed to serious problems of financial waste, notably in agriculture, it did acknowledge that there has been sharp improvement in recent years.
The Commission is not solely to blame for its financial woes. More than 80 percent of the Union’s f80 billion budget is managed not by the Commission but by national member states. It is they who have been responsible for some of the high-profile cases involving subsidies paid on nonexistent olive trees and phantom cattle. Furthermore, the funds earmarked for development and aid programs apparently were misused only after EU governments refused Commission requests for more staff. That forced the Commission to bring in outside consultants to run the programs, leading to management tangles and inadequate financial controls.
Problems of financial management have been exacerbated by differences in national culture and tradition. What the Nordic countries, with a highly developed public-sector ethic, regard as unacceptable behavior by politicians may be seen as normal in other countries. The Commission’s management problems have also been made more complicated by the growing influence of the “cabinets”–the personal political staffs of individual commissioners.
But things are beginning to change. The Commission has already implemented some reforms, including the adoption of a Code of Conduct for Commissioners and officials. The 1997 EU Treaty of Amsterdam, which will shortly come into force, will give the Commission president greater authority. But more needs to be done. To have the political clout to weed out incompetent (and occasionally unethical) fellow commissioners and to stand up to bullying by EU member-state governments, Commission presidents should have a democratic mandate. In the future the Commission president should be elected by members of the European Parliament (who are themselves directly elected by EU voters every five years) and not simply appointed in smoke-filled back rooms by EU heads of government.
Most important, the Commission must rebuild popular support for its linchpin role in a European Union based increasingly on shared sovereignty by member countries. This means that the Commission must not only reform but be seen to reform. It could start by opening up its internal restructuring debate–currently being conducted behind closed doors–to participation by outsiders, not least the very citizens to whom the Commission is ultimately accountable.
title: “Nowhere To Go But Up” ShowToc: true date: “2022-12-09” author: “Jose Ballard”
However one interprets them, the stories emanating from inside the Hermit Kingdom these days suggest that something is definitely up. Optimists hail the deepening of “Vietnamese-style reforms”–a go-slow version of China’s capitalist experiment crafted to preserve Kim Jong Il’s hereditary dictatorship. Pessimists see the death throes of an economy built to embrace juche, or self-reliance, as it crumbles under the twin weights of famine and isolation.
The ongoing nuclear standoff hardly suggests that Pyongyang is poised to embrace the world; the North’s hard-line approach has in fact upped the political risk. On Nov. 3, the ratings agency Standard & Poor’s warned that North Korea’s economy “cannot be sustained in its current state” and “is highly likely to collapse” in the indeterminate future. Yet the Bank of Korea recently released data showing that North Korea’s economy grew for the fourth straight year in 2002, a run economists in Seoul expect will continue in 2003 on the back of a stronger harvest and reviving industrial production.
Nobody with any credibility claims to have a solid handle on Pyongyang’s overall strategy, if one indeed exists. But most observers agree that government “adjustments” made in July 2002 have set in motion unprecedented change. Radical wage, price and currency reforms undertaken to reverse a marathon economic decline are playing out in ways even “Great Leader” Kim can’t forecast with any certainty. Pyongyang’s solutions “entered the realm of mass politics because the reforms impacted everyone,” says Marcus Noland, a senior fellow at the Institute for International Economics in Washington. “The longer-run question is to what extent changes at the mass level prove consistent with the maintenance of Kim’s political regime.”
Visitors to Pyongyang report dynamism unheard of even a year ago. “I was expecting the atmosphere to be more gloomy but was surprised to find it quite the contrary,” says one Japanese businessman who traveled to the capital recently after a 10-month hiatus. “There were a lot more food stands, people looked more lively, there were more [businesses] catering to foreigners and a drastic increase in the number of bicycles on Pyongyang’s streets.” Last summer university students from Japan were pleased to discover a 24-hour hamburger joint. Just last month South Korean tourists encountered haggling hawkers, quality restaurants and clucking sounds emanating from balconies in Pyongyang’s residential blocks, suggesting that even relatively well-heeled city folk have become sideline poultry farmers to earn extra cash. Expatriates accustomed to scarcity and want now celebrate a new delicacy available in one downtown restaurant: frozen food from Japan.
Once untethered in mid-2002, prices predictably shot skyward, leaving residents and tourists alike to pay more for their groceries each week. Slowly, supplies are increasing as entrepreneurial farmers, merchants and importers scramble to reap profits through hard work. But shortages remain common in most things. Grain is a case in point. Even as it hauls in the best harvest in nine years, North Korea looks set to stay on life support indefinitely. On Oct. 30, the World Food Program warned that malnutrition rates remain “alarmingly high” in the country. The United Nations’ food agency estimates that nearly 908,000 tonnes of relief grain will be needed over the next year to prevent more starvation.
North Korea’s economic viability rests increasingly in the hands of others. China, with its shared land border, is now a vital source of food and fuel. South Korea, with its industrial know-how and abundant capital to invest, has the means to jump-start export-oriented light industry in the North, a process that’s already underway. Elcanto, one of the South’s largest footwear makers, will manufacture some 80,000 pairs of leather shoes worth $2.5 million in its Pyongyang plant this year. The conglomerate Hyundai, meanwhile, looks set to go ahead with a planned industrial park just north of the demilitarized zone early next year. Factories from across South Korea could rush in, drawn by memories of their own takeoff in the 1960s. “Yes, it’s really bad [economically] now,” says Daniel Pinkston, a North Korea specialist at the Monterey Institute for International Studies. “But the only way to go is up.”
