Spotlight on Delhi

Corruption at the 2010 Commonwealth Games is being investigated

At roughly the same time as the head of the Delhi Commonwealth Games organising committee, Suresh Kalmadi, was patting himself on the back for conducting the event “really well,” prime minister Manmohan Singh was appointing a high-level committee to investigate a string of allegations of corruption into the way it was all handled.

The government was so concerned that it set up the investigation on October 15, the day after the games ended. In fact just as “very satisfied” officials and athletes, in Kalmadi’s words, were on their way back home.

By then, India’s corruption watchdog, the Central Vigilance Committee, was already hard at work on some 20 serious allegations of bribery, false invoicing, skimming of contracts, illegal tendering, use of sub-standard materials (as in the pedestrian bridge that collapsed before the games started), fraudulently extended contracts and various other abuses.

At this stage it seems that “misappropriations” of up 8,000 crore ($1.35bn) could be involved. “A truly alarming amount,” noted a member of the corruption watchdog.

And while Kalmadi continued to enthuse that “the people of Delhi and India have done themselves proud” by “overcoming all challenges” in a way that “demonstrated to the world they have the capacity and commitment to host major international events,” the opposition BJP party was saying exactly the opposite. “Is the whole cabinet not responsible for the chaos and corruption,” party chief Nitin Gadkari asked an embarrassed prime minister.

Although it’s true that the actual competitions went off reasonably smoothly, albeit to largely or nearly empty stadiums, the official comments completely ignore the problems that bedevilled the run-up to the event, intended as a showcase befitting an emerging economic superpower. Officially, a frighteningly late construction programme, filthy toilets in the athletes’ village, last-minute repairs, the use of sub-standard materials, the collapsed bridge: none of them happened.

The glaring discrepancy between the line maintained by the games organising committee and the reality says much about how India’s ingrained corruption work. The responsible bodies, whether sports organisations or provincial governments, typically bury their heads in the sand and pretend nothing’s amiss while the irregularities go on all around them.

The looming issue now is whether the investigators will be allowed to find the skeletons in the cupboard. It’s not as though the problems were discovered just before the games started – chapter and verse on allegations of misappropriations first surfaced last year. The organising committee’s treasurer, pleading innocence, resigned in August over the awarding of the contract for the tennis courts. And gradually a whole web of government departments, games officials and ministers got drawn into numerous investigations, mostly over construction projects.

At present, investigations focus on a number of Delhi government authorities including the development agency, sports ministry and the games organising committee. Even the meteorological department is reportedly being “looked into.”

As the probes deepen, a war of words has erupted between Kalmadi and Delhi’s chief minister Shiela Dikshit, with both accusing the other of corruption. In defending himself, the games chief makes a valid point that the chief minister controlled a budget for the games that was roughly 10 times the one for which he was responsible.

The prime minister’s committee is due to report early next year when, the sports minister promises, any officials found to be corrupt will be sacked. “We will look into every single charge and the truth shall be brought before the nation.”

Possibly. We’ve heard this before. It’s unlikely however that any medals will be handed out.

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The May – June 2013 Issue

Highest corporate tax
rates in Europe

European countries are scrambling to raise every last penny of funds through taxes. But some countries may have gone too far...

Belgium

Though all business taxes in Belgium can be paid online with little effort and preparation, the rates are still sky-high at 57.7 percent, including a staggering 50.8 percent total rate on profits only in social security contributions.

Belarus

In Belarus, a company spends up to 338 hours annually preparing for and paying ten different taxes and duties. The total tax rate has incredibly been lowered to 60.7 percent, from 117.5 percent in 2008.

France

A company in France pays seven different taxes and duties, the sum of which can amount to 65.7 percent of profits; though President François Hollande has announced a wave of business tax rate cuts coming up.

Estonia

A business in Estonia pays 67.3 percent of profits in tax, 37.2 percent exclusively in social security contributions. The country has gone against the grain in Europe by raising businesses taxes from 48.6 percent in 2008 to the current rates.

Italy

While corporate income tax (IRES) in Italy is limited to 38 percent of taxable profit, a company operating in Italy can expect to pay 14 other taxes and duties, including social security contributions, bringing their total payable tax to 68.7 percent of profits, according to the World Bank.

Norway

Norway taxes motor fuels twice, with a road use tax and a CO2 emissions tax. Combined with strikes in the energy sector that have curbed output, the price of gas at a local pump has soared to $10.12 per gallon.

Turkey

Though Turkey sits on the Suez Canal and neighbours many oil rich countries, the price of a gallon of average gas clocks in at $9.41 in Turkish pumps, because of a 60 percent share of taxes. 

Israel

Like Turkey, Israel is surrounded by oil-rich neighbours, but drills very little itself. Gas prices are controlled by the government, so about half of the $9.28 per gallon goes to taxes.

Hong Kong

There are few gas stations in Hong Kong, but the ones available charge up to 76 percent more per gallon than mainland China, where the government caps the cost of fuel. A gallon at the pumps will cost around $8.61 on the island.

Netherlands

Expensive labour costs make the Dutch petrol prices the dearest in Europe, at $8.26 per gallon; though the 57 percent tax add-ons don’t help.

The credit crisis

8 February 2007
HSBC warns of subprime mortgage losses

2 April 2007
New Century goes bus

14 September 2007
Wholesale markets have dried up

17 March 2008
Rescue of Bear Stearns

7 September 2008
Rescue of Fannie Mae

15 September 2008
Lehman Brothers file for bankruptcy

3 October 2008
US congress approves $700bn bailout

14 February 2009
$787bn stimulus approved by congress

 

The effects of the current financial crisis are global and irrefutable. With the collapse of Lehman Brothers, the domino effect of irresponsible public monetary policies, huge levels of unsustainable debt, and a deregulated financial sector, has escalated to the point where no corner of the globe has been left untouched.

1973 oil crisis

October 1973
Syria and Egypt launch an attack on Israel on Yom Kippur and set off a twenty day war;

1977
US President Carter creates Department of Energy, which develops the US strategic petroleum reserve

 

The Organisation of Petroleum Exporting Countries (OPEC) used their oil reserves as a weapon with the Arab Oil Embargo against those who supported Israel. By January 1974, world oil prices were four times higher than they were at the start of the crisis, especially in the US, and the shock led to a huge drop in the stock market with NYSE losing $97bn in just six weeks.  The embargo lasted five months, and the effects are still seen today.

German hyperinflation

1922-1923

Hyperinflation
1923 – 1924
Stabilisation

 

The trouble began when Germany missed a repatriation payment, worth about one third of the German deficit in this period. Inflation was already high but by 1923 it was raging. Prices doubled within hours, and by late 1923, it cost 200bn marks to buy a single loaf of bread. People burned money as it was cheaper than buying firewood. Germany eventually regained control of its economy when it introduced the Rentenmark into circulation in 1923, and then the Reichmark in 1924.

The Great Depression

1929-1933
The Great Crash
1934-1939
Recovery and Recession

 

After the decadence of the Roaring Twenties, the 1930s saw the biggest economic slump of all time. The stock market crashed on 29 October 1929, and optimism and decadent living tumbled along with the figures. The GDP fell from $103.6bn in 1929, to $66bn in 1934 and the subsequent years of recovery were the most dramatic in US history.

1907 bankers’ panic

1907
Otto Heinze and his brother Augustus Heinze bought shares of United Copper.

 

The stock market was already cautious over the tight money supply, but the US was thrown into a depression after the stock market fell nearly 50 percent from its peak in 1906. The Heinze brothers thought they could influence market shares but ended up bankrupting lenders that provided the financing to buy the stock. A chain reaction left nine institutions bankrupt. By February 1908, the panic was over and the government created the Federal Reserve system, to prevent banks from exercising too much control over the economy.