Carnegie, corruption and social enterprise

It was back in 2008 when our late founder describing his work on a 'Marshall Plan' for Ukraine wrote:

"Central to the project was a center for social enterprise, the purpose of which was to provide education on principles of developing enterprises whose aims were to be self-sustaining and to address specific social problems systemically.  That was and is the only way to even begin to address and resolve the widespread problems left in the wake of Ukraine's prior government.  The entire nation, the whole system, was badly damaged.  Repair and relief in any one area, such as childcare reform -- a horrific mess -- could only happen by dealing with the entire social, economic and political system as a whole. Dealing only with the various discrete elements would not work.  There had to be a wide-scale reformation of the whole system in order to fix any one part of it."

It was interesting to read more recently of Sarah Chayes and how corruption kills the promise of social enterprise. Sarah had been working in Afghanistan for the Carnegie International Endowment for Peace.

"In her role as special advisor to a series of ISAF military commanders, Chayes did her best to drive home the link between corruption and violence, with limited success. Meanwhile, she watched the hopes that drove her to establish her social enterprise—the promise of a better life for Afghans—slip away as Afghan society became crippled by violence.

Chayes’ experience makes a powerful case for re-evaluating the way international development agencies, businesses and governments interact with countries like Afghanistan—and this has deep implications for the social investing sector."

Corruption, perhaps is in the eye of the beholder. For many, only a problem when it undermines a neoliberal agenda.    

In Ukraine a decade ago it was the same Carnegie Endowment and their head Anders Aslund to whom the author of the 'Marshall Plan' directed 'Really Betraying a Revolution'

'According to Mr. Aslund, who enjoys a respectable bully pulpit due to his job title, most of the ills in new Ukraine’s economy are directed related to Prime Minister Tymoshenko’s management.  He states, as an article of faith but without any corroborating evidence to demonstrate cause and effect versus mere correlation, that “economic growth is screeching to a halt as a result.”  Peppering his criticism are words like “populist”, “socialist”, and “state capitalism” – suggesting, again as articles of faith and nothing more, that these are necessarily bad things that can only contribute to economic problems.  Increasing pensions and salaries, to move workers and retirees a little further out of poverty-level income, were condemned as budget busters that Ukraine’s new government cannot afford – despite the fact that not doing so essentially guarantees perpetuation of graft and corruption.  Elimination of graft and corruption, and raising the overall standard of living for ALL Ukrainians rather than a few insanely greedy oligarch clans, was the main underlying and implied reason for the Orange Revolution – at least from hundreds of people, activists and otherwise, I talked with on the ground during and after the Revolution.  Further, as director for any sort of peace institute, Mr. Aslund is obliged to review the connection between poverty and peace.  Peace does not and cannot exist for people in poverty, unless they are harshly suppressed by government or other forces.  Poverty is a horrible existence and lifestyle, and is bound to breed violence, not peace.'

As we now know, that violence erupted just over a year ago and is now an international crisis.  

Notably Anders Aslund has become one of the more recent advocates for a 'Marshall Plan' Strategy in Ukraine. 

"Others advocating a Marshall Plan-style bailout include Anders Aslund, an economist with the Peterson Institute in Washington, and Lithuanian Prime Minister Andrius Kubilius. 

Aslund argues that Ukraine needs a "Marshall Plan" in the form of both credits and "ample grants," while Kubilius has proposed that the EU devote 3 percent of its budget over the next six years -- $30 billion -- to Ukraine grants."

As one might guess, they're not talking about the 'Marshall Plan' we delivered to Ukraine's government in February 2007 with the help of locals.

So far, what I've described has more to do with the neoliberal influence of wealthy foundations than actual corruption, There was however a prominent case of corruption on which the 2007 plan had focussed - that which had been exposed in childcare institutions, described as 'Death Camps, For Children'.

"There will be people who disagree with childcare reform in particular, and who need Ukraine’s present orphanage system to remain as it is, with little regard to the well-being of the children. They are not only in Ukraine, but also in the US and possibly other countries. Many people are making very good income from Ukraine’s existing orphanage system, and therefore will almost certainly fight and try to undermine and sabotage any change. Unfortunately, I’m embarrassed to say, some of those people are in the US, calling themselves “charity” organizations. Ukraine’s orphanages supply them with a commodity they need to make money, and quite a bit of money. It is absolutely to Yushchenko’s credit, and one thing he has done absolutely correctly, in stopping foreign adoptions. It isn’t because he doesn’t care about the children, in my opinion, but because he has a very good understanding that many so-called charities are concerned with nothing more than their own bank accounts. The children in orphanages are their market commodity, and they want to keep it that way. Watch for them to appear. I'm sure they will. "

Our call for support to USAID and the Senate had declared the need of a national anti-corruption network in which NGO Maidan, KHPG and others would be members. The response had been that there was insufficent funds for "this group of handicapped and mentally retarded children".   

In 2010 we found ourselves needing to defend our social enterprise project from an initiative led by USAID and the British Council who had both been recipients of our proposal. The British Council were soliticiting partners in social enterprise, so we applied again describing our work.

The British Council is an organisation funded directly by government. A government with a policy of seeking social value in procurement but as far as I know not in partnership  They chose not to respond to our application and so I asked my MP to extract a reason. The reply from Martin Davidson stated that they had not "nicked" our work and had not responded to our application because partners were expected to make a financial contibution.

Think about it. A government sponsored agency expects payment for the privllege of dong what we'd been doing in Ukraine since 2004 or being pushed aside, along with the unwanrted children.

it would be closer to the truth to say that other partners which included Ukraine's most wealthy oligarchs wouldn't join a club which would have us as members. The entire point of their exercise seemed to be avoiding the most intractable problems for a corporate whitewash. One of these had been dropping donations into the foundations of Tony Blair and Bill Clinton another playing host to Lord Mandelson.

Another of these oligarchs is being held in Austria fighting extradotion to the US over alleged corruption issues. Would it surprise you to learn that he too supports the idea of a 'Marshall Plan' for Ukraine? The projected cost of which is 300 billion dollars. 

"In March 2015, it was reported that the Agency for the Modernisation of Ukraine (AMU), a body devoted to speedy reform in Ukraine, had been registered in Vienna. While founding members include French philosopher Bernard-Henri Lévy, British Conservative Lord Risby, and the German member of the Bundestag (CDU) Karl-Georg Wellman, the AMU also draws an advisory board of eight senior figures (Włodzimierz Cimoszewicz, Laurence Parisot, Bernard Kouchner, Lord Mandelson, Lord Macdonald, Peer Steinbrück, Günter Verheugen, and Rupert Scholz)"

As UK business secretary Lord Mandelson had declared that  they were "helping firms who help others" . Now he's helping those who help themselves.

Reading an article about social enterprise and corrution one might be seduced by the idea that there's a ready medium for rasing the alarm. it might be the case for employees of an influential foundation, but not the like of our grassroots efforts.

A particularly resistent medium is that of the Guardian who maintain a variety of hubs on social innovation.  

What chance do we stand when the hub on International Social Enterprise is sponsored by The British Council?

The argument made in the 'Marshall Plan, of applying capitalism for social benefit would later be reiterated under the brand of 'Creating Shared Value'  This came up in discussion on the Guardian where I shared our argument of applying profit for the purpose of childcare reform. Not for the first time, my contribution as a practitioner would be censored.  

5 years after Terry Hallman put his life on the line to speak out, the story of Torez finally broke into mainstream news throught the Sunday Times

"We are all guilty of inaction. The violation of human rights in Ukraine is one of the pressing issues of our day. The suppression of freedom of speech, the control of the right of assembly, the oppressive use of the tax police and the blatant banditry of the road police however all pale into insignificance when compared to the wanton starvation of disabled children by those whom the state has empowered to protect them"  

The Guardian's executive editor Jo Confino offers us advice on compassion, giving an insight into the thinking that seeks to protect one's own interests at the expense of the common good..

From his death bed, Terry Hallman spoke of his hopes that his work to place children in homes full of care and love would be continued. Of compassion, he'd said: 

"Allowing that some people do not matter, as things are turning out, allows that other people do not matter and those cracks are widening to swallow up more and more people. Social enterprise is the first concerted effort in the Information Age to at least attempt to rectify that problem, if only because letting it get worse and worse threatens more and more of us. Growing numbers of people are coming to understand that “them” might equal “me.” Call it compassion, or call it enlightened and increasingly impassioned self-interest. Either way, we are all in this together, and we will each have to decide for ourselves what it means to ignore someone to death, or not."

        

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