Addis Fortune-Content Matters:View point

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JOSEPH STIGLITZ, Nobel laureate in economics, argues that the recent scandal involving Paul Wolfowitz, president of the world Bank the reflects deeper structural and procedural problems the Bank has faced since its inception. While his term began promisingly, the politicisation of the institution’s appointments has brought harm to himself, the institution and its ability to perform its functions properly.

Good Governance Begins at Home


	The whole sorry "Wolfowitz-Affair" looks like it is finally drawing to a close. It is hard to believe that he will stay on much longer at the World Bank (WB), and it is time to start thinking more closely about the future of that institution. From the start, I was critical of the way he was chosen because I have long opposed the "old boy" agreement between the United States (US) and Europe, by which the US always appoints the head of WB and Europe the head of the International Monetary Fund (IMF). This unspoken arrangement dates from the founding of the Bretton Woods institution at a time when colonialism was still alive, and makes no sense in the 21st century. There are reports that European leaders have told the US that if they get Wolfowitz to step down quickly and quietly, they will be allowed to choose Wolfowitz's successor. It is easy to see why the US and Europe want to stick to business as usual, but such a deal would amount to a wasted opportunity. I can think of no better way to restore confidence in these two venerable institutions than to finally open the way their presidents are selected. One of the lessons of the Wolfowitz debacle is that it does actually matter how stakeholders and employees feel about the Bank's leadership. The world was prejudiced against him from the start because of his involvement in the Iraq War. But people were willing to give him a chance. Some said that perhaps he would be another Robert McNamara, the US defence secretary who helped mire America in the Vietnam War, but used his service to the Bank as penance. At first, there was reason for hope: Wolfowitz was forceful in arguing for debt forgiveness and an end to agricultural subsidies. But he also hired old friends and political allies "many of whom did not have experience in development" and sealed himself off from his staff, alienating the very people whose support he needed. As we learned from the case of Larry Summers at Harvard, relationships inside institutions (not just with donors and funders) matter. In this respect, Wolfowitz, while by all accounts an intelligent and pleasant person, did not do himself any favours. Worse, Wolfowitz did not seem to have a grand vision for the Bank. Instead of a development strategy, there was simply an expansion of the anticorruption agenda initiated by his predecessor, James Wolfensohn. As the WB's Chief Economist under Wolfensohn, I had argued that failing to deal with corruption risked undermining growth and poverty alleviation. By the time I left the Bank, these ideas were widely accepted, and I was pleased that Wolfowitz supported continuing the Bank's efforts. But the fight against corruption was always to be only one part of a more comprehensive development agenda that was required. Indeed, aid effectiveness could be undermined just as much by incompetence as by corruption. Sadly, the anticorruption agenda of the Bank became politicised. There was a push to give money to Iraq "a country rife with corruption" while other countries were accused of corruption without adequate hard evidence or specific details. And here, too, an opportunity was lost. The aims of the campaign were laudable, but it generated hostility and ill will, undermining its effectiveness. WB, in its efforts to support democracy and good governance, must insist on the highest standards of due process: charges of corruption should be treated seriously, and the evidence turned over to national authorities for use in open, transparent, and independent proceedings. This is something for Wolfowitz's successor to bear in mind. If anticorruption campaigns are to be seen as effective, they must be fair and transparent. The same is true of the selection of the WB President. There is still a chance to snatch victory from the jaws of defeat. What has been a sad and sorry saga could have a happy ending if Wolfowitz's successor is chosen in an open, transparent process. This, one hopes, is the silver lining in the cloud now hanging over the Bank.
	GETACHEW BIRU (PhD), from the Electrical and Computer Engineering Department, Faculty of Technology, at Addis Abeba University (AAU), breaks down the economics and science behind the choices of conventional and newly popular electric cars. As environmental consciousness becomes more prevalent, so to do investments in making one of the most universally used and biggest contributors to pollution, automobiles, more environmentally friendly. Not only do the costs to the environment reduce, but the economics may also make sense for the consumer to switch technologies.
	Economic, Environmental Assessment of Electric Cars On duty in January 2007 in the town of Dire Dawa (555Km west of the capital) for the first time, I happened to see an electric car as I walked through the streets. The small yellow car was standing unnoticed. As I came nearer to the car, I saw a small paper, written on it "an electric car". I had been very much excited by this electric car. I asked a friend of mine who accompanied me, "Is this car really an electric car?" He told me that it was assembled in Dire Dawa and the company which assembled the car in cooperation with a Chinese partner is Techno-Link Ethiopia Engineering PLC. I have been one of the many people who often complain about the price of petrol and the emission produced by petrol cars. Since one third of my salary goes to buy fuel, I have good reasons to complain about gasoline driven cars. The exhaust pollutants I usually observe during my drive from home to work or back, always irritates me. The exhaust coming from some cars even makes the streets dark with black fumes making driving behind such polluter cars difficult. Road transport accounts for 25pc of total emissions of carbon dioxide (CO2) - the major contributor to climate pollution - in the United Kingdom (UK). In Addis Abeba, we lack precise information about the air quality; however, it is known that the air is far from clean. The vehicles running in all directions have a very severe effect on the air quality. In Addis Abeba, the traffic is very much congested with a mix of pedestrians and a wide variety of traffic modes. Most of the cars imported to the country are old and have no antipollution devices, if not inefficient in their fuel use with high emission levels. This increases further fuel consumption, thus vehicle emissions, which further exacerbates air pollution. This country relies wholly on imported fossil fuel for driving all forms of cars; it has to expend its limited hard currency to cover the cost. Even though the cost of fuel is subsidised by the government, for many of us, it is almost beyond our individual financial capacity and puts a huge pressure on our monthly budget. The price of petrol is increasing from day to day at an alarming rate; many of us do not know how to cover the cost. Beyond my excitement for new technology, it is for these practical issues that I would like to promote the use of electric cars I this city. A car propelled by a motor powered by electric energy from rechargeable batteries or other source onboard the vehicle, or from an external source, is called an electric car or vehicle (EV). There are four main advantages of EVs: They produce no exhaust gas and hence their use could reduce air pollution; they do not use petroleum resources which are much expensive than the cost of electric power produced by rechargeable batteries; EVs are quiet and produce little sound; and most importantly, the batteries can be charged while at home or work with a simple charger circuit. However, it does not mean that EVs are free from limitations. Unfortunately, pure EVs have one main limitation because they cannot go more than 150Km before needing to be charged, even less when in extreme weather like heat or cold. Devices like a radio would bring down the battery faster, too. Charging stations are needed on the high ways to recharge the batteries and could take as long as three hours to get a full charge. Thus long distance travel in an EV is difficult. Nonetheless, the majority of small car owners in Addis or in other towns use their car mainly to travel a distance between their home and workplace, which is hardly longer than 100Km a day. Therefore, for such people, these cars are very much appropriate. The car can be recharged every night at home for use the next day. An EV has relatively low speed compared to the conventional cars. In order to accelerate the car and run at high speed, the battery should have enough capacity. Increasing the capacity of the battery cannot be realised without increasing the weight of the batteries. This makes the battery large and bulky, which adversely affects the performance of the car. There is a lot of research going on to produce new battery types which offer more capacity with less weight, though. New batteries with new features are not the only solution to the EVs, perhaps the most promising solution to the energy storage is to carry around the power station with the vehicle and recharge batteries when needed. It is this concept that led to development of the Hybrid Electric Vehicle (HEV). HEVs combine an internal combustion (IC) engines with an electric motor powered by battery. The electric motor assists the gas engine in starting up and accelerating. This decreases the use of fuel and reduces emissions from the IC engine. The engine charges the battery, extending the range and providing extra power. The motor can be used to recharge the batteries in regenerative braking when the car is powered by the engine and takes power from the batteries when the engine is not working. The disadvantage of HEVs is the additional initial cost, which includes the cost of the engine and battery. Due to the heavy mass of the engine and battery, such cars do not also accelerate as fast as the conventional cars. HEVs do produce emissions, but such emissions are far less than those from conventional gasoline vehicles. The positive impact of electric car use on the climate is beyond any doubt. Assuming the same initial cost for both gasoline-driven and electric car of similar rating, the economic impacts for individuals can be assessed by comparing the running costs of the conventional car and electric vehicles. The energy cost is one of the major running costs of a car and a simple comparison of this gives us good information about the running costs of the cars. As I have been informed by the manager of the company and from other sources, the batteries used to drive the car costs around 3,000 Br and lasts from two to three years, depending on the frequency of use of the car and the style of driving. The electric energy used to charge the battery costs around 50 Br a month. Assuming that the battery's life expectancy is only two years, the total energy cost in two years is 4,200 Br. Compare this to may small 1,300 CC Toyota. I daily drive around 50Km on the average, which cost me a monthly fuel of 800 Br on the average. This makes my fuel cost in two years around 19,200 Br. Most people consider that the cost of car ownership is only the initial purchase, fuel and maintenance. But the costs to society that arise from the environmental, health and social problems caused by emission from the use of fossil fuel must also be considered. Emissions have been rising steadily with the increasing number of cars on the streets. Pollution of air is causing health, social and economic problems. I believe the electric car assembled in Dire Dawa offers us much in this respect.