The "Basics" Debates

[Eja]

Originally Posted by charles4u

....OK, so under this same room (The "Basics" Debates) or a new different room ?

....Kindly give the guidelines on how the debate should be presented also with how the presentations should be followed if any.

I just want things to be accurate with no contradictions, to be smooth and pointful.

Good query Charles4u.

We will be following the usual Crucible Procedure.

There will be main debate threads (4 all together) where participants who have indicated an interest will present contrasting views. There will also be Parallel threads where supporters of each point-of-view can share their thoughts.

These are only proposals mind you, other ideas on how to proceed are welcome. By the morning of Saturday (the 18th), we should know for sure how we will be going.

[charles4u]

...OK, so atleast if people come here and read the posts...they will know how and what to expect b4 or on saturday the main debate day.

....Is there anything else we need to know b4 saturday or what to expect on saturday so as so not to miss something(s).

[Enforcer]

Originally Posted by Eja

Latest revised grouping follows below.

ONE
1. Health Care
2. Urban and City Development

• Housing
• Transportation

3. Education

TWO
1. Agriculture
2. Energy
3. Industry

THREE
1. Economics
2. Finance

FOUR
1. Civic Organisation
2. Foreign Policy
3. Immigration
4. Information
5. Security

Eja,

All the subjects in group 1 to 4 appeal to me, particularly health care, industry, economics, finance, foreign policy, information and security. If I have to limit myself for any reason I will devote more time to group 3.

I am ready.

[Multioption]

Eja,

Thanks a heap for creating this thread.

The only problem I see confronting Nigeria is not lack of ideas on how to move the nation forward, but unwillingness of the citizenry to do the right thing. The value system in our not so great country is non-existent.

Let me give you an instance:

A family friend told me a story about one of his in-laws who visited his family some months ago. It so happened that the guy took the in-law (a lady) out for shopping, and the following conversation ensued:

In-law: "na wa o, everybody drives nice cars in this country"

Friend: "Oh yes, that's America for you. Hardworking Americans live comfortably"

In-law: "Well, I can't live here"

Friend: "Why?"

In-law: "Nobody will respect me here"

My friend was rather puzzled, so he asked:

Friend: "What do you mean by that?"

In-law: "A country where you can't tell the difference between the rich and the poor; how do you know who is who?

At that juncture, my friend went on hibernation for the rest of the day. He did not mince words telling his wife that her cousin (the visiting in law) had overstayed her welcome.

The scenario above aptly captures the mindset of the average Nigerian. Both the rich and the poor have a terrible proclivity for adulation, hence Nigerians' unbridled desire for material acquisition!

So, corruption fueled by perverted value system is the root of all our problems. Something is wrong with the psyche of the average Nigerian, especially those who have never stepped outside the shores of the country.

The only antidote to our problem is to find a way to ENFORCE the law and due process.

Nigeria is a lawless country!

Will copy and post an article written by a Chicago based Nigerian!

[Multioption]

Source
Malcolm E. Fabiyi, PhD Tuesday, October 28, 2008

mef22@yahoo.com
Chicago, IL, USA

A RATIONAL DECISIONS THEORY EXPLANATION FOR WHY CORRUPTION THRIVES IN NIGERIA

Rational Decision Theory is a standard approach used by economists and other social scientists to explain why individuals make the decisions that they do. The field of decision theory has spawned several Nobel Laureates, and a healthy body of experience has developed to support its fundamental premise. The behavior of stockholders, economic cycles of boom and bust, criminal behavior, and a host of other behaviors have been explained by this theory. In this article, I apply simple rational decision theoretic rules to explain why corruption thrives in Nigeria. I also apply the theory to identify some critical areas where public policy efforts should be focused if corruption is to be tamed.

At its core, decision theory is based on simple and intuitive concepts. It assumes fundamentally that given an option, W, which has a likelihood or probability of occurrence, P, the expected benefit from taking that choice is given by the multiplication of the option, W and the probability P. In simple mathematical terms, we would say that:

Expected Benefit = W x P.

Of course any choice options naturally carry corresponding costs. Therefore, given a Cost, C with a probability of occurrence P', the expected cost of the option is given as:

Expected Cost = C x P'.

In effect, the expected net benefit of any option W given a cost C and respective probabilities of occurrence P, and P' is given as:

Expected Net Benefit = Expected Benefit - Expected Cost = W x P - C x P'.

Whenever the Expected Net Benefits are greater than zero, the choice is one which a rational decision maker is expected to make. If the Expected Net Benefits are negative, the rational thing to do is to turn down the option. Now that we have a decent handle on rational decision theory we will apply the concept to two hypothetical corruption cases.

A 45 year old Director General in the Nigerian Civil Service earns N8m annually (including allowances, rent and home ownership subsidies and other emoluments). He has the opportunity to corruptly enrich himself to the tune of N10 m. If caught, he will suffer reputational damage for the rest of his life, spend some time in jail and lose his pension entitlements. He estimates that the losses he will suffer if caught and prosecuted will come to about N5 m annually. These losses can be calculated as a perpetuity, which at an assumed 10% interest rate gives estimated lifetime losses of about N50 m. He knows that there is a 10% chance that he will be caught, and if caught, there is a further 10% chance that he will be prosecuted. He expects that he will be found guilty if prosecuted. Should he corruptly enrich himself?

Answer: Yes. The Expected Net Benefit is positive (+N9.5 m).

Probability of getting embezzled amount (P1)= 100%

Probability of getting caught (P2) = 10%

Probability of getting prosecuted (P3) = 10%

Probability of being found guilty if prosecuted (P4) = 100%

Estimated Lifetime Losses (C) = N50m

Gains from Corrupt enrichment (W) = N10m

Expected Net Benefit = P1 x W - P2 x P3 x P4 x C

Expected Net Benefit = 100% x 10 m - 10% x 10% x 100% x 50 m = 10 - 0.5 = N9.5m.

Case 2: High Enforcement Regime

Consider the case of the same civil servant. Assume that now the enforcement and judicial environment is radically different. The government has instituted a policy that rewards whistleblowers who report corrupt officials with 2.5% of the total embezzled amount. There is also a 2.5% bonus reward that goes to the lawyers who prosecute the cases if there is a successful conviction. These developments have caused the probability of getting caught to increase to 50% and the probability of getting prosecuted to increase to 50%. Should the Civil Servant still corruptly enrich himself in this new scenario?

Answer: No. The Expected Net Benefit is negative (-N2.5 m).

Probability of getting embezzled amount (P1)= 100%

Probability of getting caught (P2) = 50%

Probability of getting prosecuted (P3) = 50%

Probability of being found guilty if prosecuted (P4) = 100%

Estimated Lifetime Losses (C) = N50 m

Gains from Corrupt enrichment (W) = N10 m
Expected Net Benefit = P1 x W - P2 x P3 x P4 x C

Expected Net Benefit = 100% x 10 - 50% x 50% x 100% x 50 m = 10 - 12.5 = -N2.5 m.

Drawings Public Policy Lessons from Rational Decision Theory

While these examples are hypothetical, the implications are clear. The self interest of people and the proven rational basis for much of human behavior can actually be used as tools for cracking down on corruption. Rational decision theory suggests that if corruption is to be tackled effectively public policy must focus on (i) increasing the likelihood of getting caught, (ii) increasing the likelihood of prosecution and (iii) raising the penalties borne by corrupt officials.

(i) Encourage whistleblowers so that the likelihood of catching embezzlers increases: There is always a long line of clerks, messengers, cashiers, accountants, personal bankers and auditors that are privy to every single act of corruption. Right now, these people keep quiet because there is no incentive to make them come forward with the information that they have. Imagine what would happen if a law was enacted that guaranteed a reward of 2.5% of the recovered proceeds of corruption to a whistleblower (the payout should probably be capped at N10m or so, otherwise the incentives become perverse). I am confident that the authorities would be inundated with all types of information about corrupt activities. As a consequence the likelihood that corrupt officials will be reported should increase, thereby increasing the costs to the perpetrators of corrupt activities.

(ii) Provide Incentives to Lawyers so that the likelihood of prosecution increases: Even where corrupt officials are arrested, we have seen situations where trials drag on forever, or the officials are let off the hook because of the ineptitude and sloppiness of the lawyers charged with their prosecution. To get prosecution rates up, it will be prudent to provide an incentive that rewards the successful and timely prosecution of cases. Guaranteeing some portion of the recovered sums to successful prosecutors could help in this regard. In the corporate world, where shareholders are faced with what is called the Principal-Agent problem, the commitment of the CEO and other executives to making sure that their (the executives') focus is on growing shareholder's wealth is secured by making stock options part of the compensation package. If the stock does well, then the executives benefit as well.

(iii) Increase the penalties associated with corruption: As the cases suggest, a critical element that determines the expected net benefit (or loss) of corruption is the magnitude of the lifetime loss suffered. In all the instances considered, if the lifetime losses had been more extreme, the expected net benefits of corrupt activity would have greatly reduced. Some of the steps that could be taken from a public policy perspective to increase the costs to the perpetrators of corrupt activities includes severely restricting the economic opportunities available to people convicted of corruption. For instance professionals like lawyers, doctors, and engineers who have been convicted of corruption could be stripped of their charters and/or licenses. Convicted embezzlers could be excluded from participation in the stock market, or politics, and onerous forfeiture requirements could be imposed to make the lifetime losses large and significant.

Dr Fabiyi is a former President of the University of Lagos Students' Union (ULSU).

[valteena]

Originally Posted by Eja

ONE
1. Health Care
2. Urban and City Development

• Housing
• Transportation

3. Education

TWO
1. Agriculture
2. Energy
3. Industry

THREE
1. Economics
2. Finance

FOUR
1. Civic Organisation
2. Foreign Policy
3. Immigration
4. Information
5. Security

I am cool with 1 & 4 and will settle for 4 if we are restricted to just one group

[molue]

I am in for 2 & 4 but, will be snooping on the remaining groups... Are we allow to switch?

Molue

[charles4u]

Originally Posted by molue

I am in for 2 & 4 but, will be snooping on the remaining groups... Are we allow to switch?

Molue

....Switch bawo ?.....you cant switch if you are assigned to a group, so its better you choose and know were you belong now oo.

... And also we should only be allowed to belong in just 1 group out of the 4 groups.

[nero africanus]

this is a good idea eja ,

i can participate on all the topics from a systems thinking point of view

[Eja]

Thanks to all respondents.

With regards to the groups and which one a person belongs to, there is no restriction to the number of groups one participates in.

I would suggest however (for the purposes of time management) that each person pick only one Group as their main debate.

Remember that each debate will normally have two people offering contrasting views and, any number of supporters/dissenters in the parallel threads.

This means (for example) that Molue could be one of the two debaters going over items in Group 4 on the main debate thread while also contributing on the parallel thread to the debates over items being covered in Groups 1 to 3.

Also, we still need 2 volunteer Moderators.

[Marin]

Originally Posted by Multioption

Eja,

Thanks a heap for creating this thread.

The only problem I see confronting Nigeria is not lack of ideas on how to move the nation forward, but unwillingness of the citizenry to do the right thing. The value system in our not so great country is non-existent.

Let me give you an instance:

A family friend told me a story about one of his in-laws who visited his family some months ago. It so happened that the guy took the in-law (a lady) out for shopping, and the following conversation ensued:

In-law: "na wa o, everybody drives nice cars in this country"

Friend: "Oh yes, that's America for you. Hardworking Americans live comfortably"

In-law: "Well, I can't live here"

Friend: "Why?"

In-law: "Nobody will respect me here"

My friend was rather puzzled, so he asked:

Friend: "What do you mean by that?"

In-law: "A country where you can't tell the difference between the rich and the poor; how do you know who is who?

At that juncture, my friend went on hibernation for the rest of the day. He did not mince words telling his wife that her cousin (the visiting in law) had overstayed her welcome.

The scenario above aptly captures the mindset of the average Nigerian. Both the rich and the poor have a terrible proclivity for adulation, hence Nigerians' unbridled desire for material acquisition!

So, corruption fueled by perverted value system is the root of all our problems. Something is wrong with the psyche of the average Nigerian, especially those who have never stepped outside the shores of the country.

The only antidote to our problem is to find a way to ENFORCE the law and due process.

Nigeria is a lawless country!

Will copy and post an article written by a Chicago based Nigerian!

The highlighted part of you post reminds me of a book I was reading, where an English aristocrat in the 19th century expressed his disaproval of a plan for the mass production of soap arguing that if soap was available to every woman, how would one be able to tell a lady apart from a working class woman.

[charles4u]

....Am sorry to say this but shouldnt we just belong to one group and then debate on it with the other groups instead of being in 2 groups were there will be complications.

....being in one group will make it easier and we will all know were to stand, who is who and what he or she is representing. Lastly...there will be chance for others to participate just incase they want to instead of filling up the space with just one or two guys. (it will become a lecture not a debate).

[Eja]

We have no members volunteering to moderate yet. No matter, we can still carry on meanwhile. Can four from those who wish to participate each please start up a thread under the one of the following headings :

1. Urban and City Development
2. Agriculture, Energy and Industry
3. Economics and Finance
4. Civic Organisation and Foreign Policy

The subjects remain the same as when we had Groups ONE to FOUR. Just that for clarity, I have selected the headings used above.

[nero africanus]

Agriculture , energy and industry


agriculture
The ability to feed itself has always formed the bulwark of human endeavour from the earliest times. For this reason it must be given priority.
I am of the opinion that the government should pay an active regulatory role in the agricultural productivity of any nation.

The reasons for this is this
The farmers needs to be protected from the vagaries of the market
The govt needs to ensure that a minimum required to feed the people is produced
Nigeria can solve the agricultural problem one and for all by capitalising a food and agricultural bank with sufficient finance to fix the price of food produce.
This can be done with the price of cassava being fixed per tonne, this would be the price that the food and agricultural bank will purchase cassava that the farmers produce in this way the farmers are insulated from falling prices and consumers are insulated from rising prices. The FAO will also ensure that Nigeria produces 5 million tonnes of cassava a year at least. This quantity of cassava is what we require to feed Nigerians for a year. . To ensure that this target is met, the FAO will sign contracts with small companies who will go ahead to operate cassava plantations whose produce will be sold to the FAO. In this manner the nation ensures that it produces at least 5million tonnes of cassava. This will be extended to other food produce.

If we succeed in doing this for every food produce Nigeria will once again become a food exporting nation, it will mop up unemployment as there will be a significant amount of labour required in producing 50 million tonnes of food. We shall establish plantations for cash crops which will be run on the same model as that for food crops, the processing of oil palm and cocoa takes up a significant amount of labour.
Energy
The government owes the citizens a duty to provide them with jobs. for this reason; it must ensure there is enough power to drive industrial processes,
In the case of Nigeria, it is essential that power is decentralised and left for local companies to run. However it is necessarily that the government provides power substations in every state, as soon as this power stations are up and running, they are sold in an IPO on the stock market. This model is necessary to prevent the PHCN debacle. This model will have the nation building a power generating station in every state of at least 150MW or 40 watts per person in the state whichever is higher. This will enable factories to function. With this kind of decentralised power generation, economic competition and rivalry will ensure as some power companies will perform while others will not. It is important that after the resource mobilisation that control of these companies is transferred to the private sector. In the short term, it is necessary to deploy bio fuel /fossil fired power stations while other sources of energy like hydro which takes time to build is implemented.

The beauty of this model that whatever the state spends on deploying these systems it will get it back once it is sold and this can happen within 6 months, the government also needs to privatise the national grid, but not before huge cash injections to fix distribution short falls in terms of overloaded transformers, faulty transformers and news areas of human settlement. As soon as this is done and an effective grid is up and running the grid should be sold to private investors where the owners of the national grid will charge the power generators a premium to distribute their power to the consumer. In this way the government assumes the traditional role of regulation. It can also maintain a minority stake as a source of revenue for the state.

Industry,

I am a firm believer in management by objective, for this reason, the Nigerian state should set a target for itself to create 35 million new jobs in the country. It must be said at this point that if Nigeria grows enough food to feed itself, a large part of this target will already be met. Nigeria can create new jobs by control of importation. It can create a national industrial development board. This board will determine what we can realistically produce and award contracts to bidding companies to produce these things. Importation will be restricted to public companies that are held accountable for imports. As soon as the production companies produce toothpicks for instance, it will be transferred to the company in charge of the importation of that product. The whole idea is that at any point the company in charge of importation should be in a position to buy and distribute what is produced locally, no matter the quantity, at any point that is it not able to pay for the local produce and subsequent distribution then it is time for the foreign importation of the particular product to end.

In this manner, the NIDB will contract production at a fixed price out to companies and transfer the finished products to the importers to sell. In this way, foreign goods will be gradually phased out, while the risk of the producers is born by the importers.

As long as we continue this manner of import substitution there will be an increased industrial activity as high as the production contracts that the NIDB is able to sign with producers.

The whole underlying point is that Nigeria has been left to the market since the Abacha years but the market as refused to function or indeed allocate resources, the Nigerian state will create a frame work that reduces the risk inherent in the system which only it can. At some point , Nigeria will contract away all that is imported today and a new age will be ushered in a Nigeria in need of immigrants.

[charles4u]

Economics and Finance

Economics:

Economics aims to explain how economies work and how economic agents interact. Economic analysis is applied throughout society, in business and finance, education, health, law, politics, social institutions. An economy is the business of one place to another, Activities related to the production and distribution of goods and services in a particular geographic region (In this case Nigeria).

Here are the things involved in a perfect and growing economy:

1. The government prints notes at a regular rate and maintain a balance sustainable annual budget with a positive use (If no corruption).
2. The government (If no corruption) create infrastructures which will lead to development and increase in employment.
3. People put their money into shops and businesses, by playing the stock market.
4. The infrastructures and growing businesses make more jobs, and that makes a better employment rate in the region or country.


Here are the things involved in a bad economy:

1. The government prints too much money with increase in annual budget without economy growth, which means interest rates and inflation will go up. Those rates go up because money won't have as much value anymore when there's too many Naira bills around. For example, if everyone had 10,000 Notes, no one would care about having 200 Notes anymore -- they wouldn't be worth much and prices will increase.
2. Because of vast amount in budget with corruption and no positive impact in the economy, fewer companies would be able to manage the economic ups and downs. They would have to shut down, which would mean fewer jobs.
3. More people would be poor or even homeless, and fewer people would have money to buy things and play the stock market.
4. Thus, more companies would shut down and employment rates would drop.


An economy is a lot like the enviroment, Everything depends on each other. That is why economies country like China goes high, because more people are bringing and creating businesses there, and more jobs and more money is coming to their market which is leading to a constant and systainable growth in their economy.


Finance:

finance refers to the concepts of time, money and risk and how they are interrelated. Banks are the main facilitators of funding through the provision of credit, although private equity, mutual funds, hedge funds, and other organizations have become important. Finance is used by individuals (personal finance), by governments (public finance), by businesses (corporate finance), as well as by a wide variety of organizations including schools and non-profit organizations.

In this case I will choose from public finance (government), The proper role of government provides a starting point for the analysis of public finance. In theory, Sponsoring/Assisting/Supporting/Contributing to the private and public sectors or markets. But in a case were there is no assistance or support from the government then there wont be increase in growth for the private sectors or market.

The case of Nigeria is related to poor financial system and a high rate of corruption, Good governance is an essential part of a framework for economic and financial management which also includes: macroeconomic stability; commitment to social and economic equity; and the promotion of efficient institutions through structural reforms such as trade liberalization and domestic deregulation.
Poor governance may result from factors such as incompetence, ignorance, lack of efficient institutions, the pursuit of economically inefficient ideologies, or misguided economic models.

NOTE : Poor governance often leads to corruption and corruption is an important element of poor governance.

Corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. Most importantly, the increase in corruption via higher uncertainty exerts adverse effects on capital accumulation, thus leading to lower growth rates.

In a country were there is no transparency in governance and a high rate of corruption, surely the economy and the financial system will deteriorate..if not collapse. A better country needs a better government and a better government needs a better positive people to handle it which will lead to a positively growing economy with a strong financial system that will sustain the country in all aspect of development.

Thank you.

[Toku.A]

What do we hope to achieve thru this debate. Are we writing the NVS party manifesto, or we are helping out a future 'honorable'