The Dutch Prison System is Worth a Good Look

Last night, I was watching GPS, Fareed Zakaria’s program on CNN about how over the last 10 years, the number of prisoners in the Netherlands had dropped from 20 thousand down to 10 thousand.  I found the story so fascinating that I tried to do a quick search on Google after the show to try to understand WHY the crime rate in the Netherlands is dropping so fast that they need to close prisons down.

Fareed Zakaria’s Global Public Square on CNN

Fareed mentioned that the prison philosophy is not meant to be retributive but rehabilitative. Yes, the Dutch enforce the law strictly and arrest the law breakers. But there tends to be leniency in the sentencing of those found guilty of crimes. First of all instead of judgements of solely consisting of prison sentences, the courts mete out penalties that are a combination of fines, community service, training, and prison sentences. In addition, most prison sentences do not exceed three months. I even read that in some cases, hospital detention for treatment is a sentencing option. The intention is to attempt to re-integrate the criminal back into society.

This doesn’t mean that the Dutch are never tough. It seems that they draw the line on violent crime, which stands to reason.

Readers from the Philippines (where a brutal “Drug War” that has led to the deaths of thousands is currently being waged) may ask: How do the Dutch treat drug offenders? Dutch law defines drug trafficking, cultivation and production and dealing in and possession of drugs as criminal acts. Possession of more than 5 grams of cannabis will be confiscated but drug use as such does not constitute a crime. Further, the use of drugs is prohibited at schools and on public transport or in situations that involve public order, and especially when the health of young people may be at risk. Persistent offenders who have been found guilty of drug-related crime such as theft and burglary are subject to greater penalties but often also to treatment in care institutions.

Some people may view the Dutch approach to be naïve and “pollyannish”. Yet, you cannot argue with the success that they have achieved over the last decade. Also, has the more hawkish approach that countries like US has taken produced better results? Let me quote from Fareed Zakaria again in a GPS blog post that he made last March 30, 2012 entitled “Incarceration Nation”:

Something caught my eye the other day: Pat Robertson, the high priest of the religious right, had some startling things to say about drugs.

“I really believe we should treat marijuana the way we treat beverage alcohol,” Mr. Robertson said in a recent interview. “I’ve never used marijuana and I don’t intend to, but it’s just one of those things that I think. This war on drugs just hasn’t succeeded.”

The reason Robertson is for legalizing marijuana is that it has created a prison problem in America that is well beyond what most Americans imagine.

“It’s completely out of control,” Mr. Robertson said. “Prisons are being overcrowded with juvenile offenders having to do with drugs. And the penalties – the maximums – some of them could get 10 years for possession of a joint of marijuana. It makes no sense at all.”

It is clear that the Dutch prison system has been effective preventing many first-time offenders from falling into a cycle of crime. It is interesting that a criminal record in the Netherlands is expunged after 5 years for a violation and after 20-30 years for a criminal act. That said, there are also other significant contributing factors such as strict gun control and a highly effective social welfare system.

I do not believe that these factors I have cited can fully explain the phenomenon we are seeing in the Netherlands today. Things are always more complex than they appear at first blush. Nevertheless, the Dutch certainly have a good thing going that is worth the attention from the rest of the world.

(p.s. A further area for thought: Do punitive HR policies produce the desired results in companies? Or should companies employ a more nuanced approach that also considers options for re-integration of offenders of company rules into the desired company culture?)

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DID YOU KNOW … about Power Line Communication?

The best part about being a consultant is getting exposed to and appreciating a great variety of ideas, insights, perspectives and views. I realize now that I need to memorialize some of these ideas because they are just THAT important- not just for myself as a professional or my clients but also to society as a whole. (This is going to be the DID YOU KNOW series.)

For instance, I learned today that all across the government-owned power grid that is operated privately co-exists a power line communication network. This is a telecommunications facility embedded in the country’s power distribution network. The grid operator typically uses about a third of the capacity of the communication network in order to monitor the performance of power distribution across the grid. A whopping 2/3 of the communications capability is often left unused simply because the franchise of the grid operator limits its business to power distribution. Wow … really???

In a number of countries this excess capacity is used as broadband over power lines capability to augment the national internet network. An avenue to upgrade our woeful internet service across the country has been there all along!

Is it time for the Department of Energy and the Department of Transportation and Communication to SERIOUSLY sit down and resolve this apparent wastage of resources?

When fact is deliciously stranger than fiction

Along B. Gonzales Street near Katipunan Avenue, a cafe is daring to be different. Cafe Xocolat boldly offers an alternative to your routine caffeine fix – a bold cup of hot chocolate. It doesn’t harm that they also offer good great meals and dessert at (almost) student prices. Craving for churros con chocolate? Sure, you can find it there! (Dear readers, I failed to take photos when I was there and it might be some time before I can go back and take my snapshots. I will appreciate if you can post your photos in the comments section in the meantime.)

On the wall at the cafe while waiting for my meal, I read a sign:

Great ideas start with completely unrealistic thoughts.

It just so happened that I just read Harvard Business Professor Teresa Amabile’s article entitled “Creativity and the Role of the Leader”. In the article, Prof. Amabile enjoins organizational leaders to “motivate with intellectual challenge” but also to “accept the inevitability and the utility of failure.” The end goal is to encourage the free flow of ideas – continuously and sustainably. Professor Amabile’s insights almost sound like common sense and promoting good ideas across the ranks in the organization should be as easy as banana toffee pie in Xocolat. Except that the great ideas may appear like absolute nonsense at first glance! Especially to leaders so accustomed to the corner office.

So what does a good and enlightened leader (and Xocoholic) do when fact appears stranger than fiction? Step back and enjoy a good cup of hot chocolate and then ask herself what the eminent Professor Amabile will do in the same situation – which, among other things, is to acknowledge that great ideas can come from across organizational rank, social and educational background, ethnicity, and gender.

Happy ideation!

The Cafe Xocolat Menu

Creativity and the Role of the Leader at Harvard Business Review

creativity

Three Reasons to Travel

At the beginning of the New Year, it is customary for magazines (and now, web blogs) to feature lists – anywhere from the top ten memorable things in the past year to the top ten resolutions for the New Year. In order to come up with a list of my own, I asked my three adult children over dinner what they learned from traveling. This is what they told me:

  1. Chop Suey is American

One child replied that Chinese food is not the same everywhere adding that the way that Chinese cuisine can accommodate local preferences can be surprising. Anecdotally, he mentioned that while the Chinese food in Amsterdam’s Nieuwmarkt was fabulous, it was deeply disappointing in Boston’s Chinatown. Of course, my son’s sample size may have been way too small but the point, I believe, is nevertheless valid. I have no doubt that the ubiquity of Chinese cuisine stems from that impressive ability to absorb external influences. Asking for menu staples such as chop suey or beef and broccoli in a restaurant in China will likely confuse your Chinese waiter because these dishes are more American than they are Chinese. The traveler, like Chinese food, becomes more adaptable absorbing new influences.

  1. There are places that you can drink water from the tap

The second one mentioned that he was blown away by how different cities operated so differently – from spanking modern Singapore to the more tradition-bound London, from the right-hand drive New York to the left-hand drive Adelaide. The pomp of a Queen’s Day parade imprinted on him how the government in the UK was vastly different from our (American-influenced) presidential system. But what he was most surprised about was how in some countries, you can drink water right from the tap! There is indeed more than one way to skin the cat and the traveler becomes more accepting that different ways can work equally well.

  1. Camila Cabello’s “Havana” is not Egyptian-sounding

My daughter was delighted at the sheer variety of art and music, of architecture and history. One of her favorite places is Seam Reap – a place that is relatively close to the Philippines and yet so different. She believes that travel broadens the “right brain” and elevates the traveler’s creativity profoundly. She chides that I need to travel more often (and more thoughtfully) because I once commented that Camila Cabello’s “Havana” sounded Egyptian to me.

I believe that my three children have given examples of a phenomenon that MIT Sloan’s Peter Senge calls a Shift of Mind that comes from seeing the world anew. Travel broadens the traveler’s sense of identity – beyond the family, the community, and the nation. The traveler begins to see one global village. And from there, it becomes easier to envision and advocate world peace, coming together to stem climate change, and finally ending poverty, prejudice and inequality.

Happy New Year and happy travels, everyone!

Edinburgh castle

A learning opportunity at Edinburgh Castle

It’s a bubble alright

I’ve heard that the best place to see the most magical sea of tulips is in the Keukenhof flower garden in springtime. Expect to be hypnotized by a blaze of colors stretching several hectares. (Pity that the few times I’ve traveled to Amsterdam is always around Fall.)

Tulips can be so stunningly lovely that it is no surprise that in the 17th century, the Dutch master painter Jan Van Goyen exchanged two of his masterpieces for a handful of the short-lived blooms! And it wasn’t just Van Goyen – a classic example of a speculative bubble leading into a sharp market crash is the Tulip mania of 1634-7. Back then, the demand for tulips became so intense that outside of tulip season, tulip “futures contracts” had to be invented! The interest in tulips reached a frenzied crescendo in the winter of 1636 when the futures contracts were changing hands up to ten times a day.

What happened next came completely out of left field. In February 1637, not a single buyer came for an auction in Haarlem due to reports of an outbreak of the plague. It was a wakeup moment for the multitude of tulip traders. The price of tulips had risen far and beyond the ornamental and the hobby value of the flowers. Overnight, the bullishness turned into panic. Panic sent the price of tulips crashing, leading to economic crisis for  the Dutch middle class that same spring.

Since that time, each and every financial market crash has been referenced to the grand-daddy of market crashes, the Dutch Tulip Mania.

Today, there is a lot of chatter about the phenomenal rise in the value of the Bitcoin as Tulipmania 2.0.

What goes up ….

Don and Alex Tapscott have evangelized through their book  Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World and through articles in Fortune and other business journals about how the underlying technology of Bitcoin – Blockchain –  will completely transform financial services and payment systems. Indeed, the technology is likely to be profoundly disruptive and Bitcoin is merely one of a myriad of use cases.

Bitcoin is a cryptocurrency. It is meant as a substitute for the many fiat currencies of the world such as the US Dollar or the UK Pound. Last week, the value of Bitcoin has reached a record high of US$ 17.5 thousand and the murmurs that Bitcoin is merely the latest irrational exuberance of the financial markets have grown ever louder.

Long Island Ice Tea is a New York based beverage company that has been unprofitable for some time. In a bid to turn its business around, it decided that it will change its focus away from non-alcoholic beverages into blockchain-based opportunities. While it has not taken any concrete action to implement its new vision, the company did quickly manage a change of corporate name into Long Blockchain Corporation.

The name change led to an astonishing 289% rise in the Company’s share price.

Long Island Iced Tea Soars After Changing Its Name to Long Blockchain.

Iced tea

Refreshing iced blockchain with a slice of lemon

The story of this company points strongly to the emergence of yet another financial market bubble. Indeed, is a medium of exchange like the Bitcoin worth US $ 17.5 thousand in the midst of several globally accepted reserve currencies such as the US Dollar, the Euro and the Japanese Yen whose Central Banks are seriously looking into issuing their own cryptocurrencies?

Bitcoin is biggest bubble of them all, and it’s the Fed’s fault, says Ron Paul

Global payments is in a state of flux and will perhaps remain so in the short-term. Until we see the impact of the initiatives of the world’s central banks to integrate cryptocurrencies into the global financial order, the jury is still out for Bitcoin and the other cryptocurrencies seeking to replace the world’s reserve currencies.

That bitcoin speculators exponentially outnumber legitimate users reminds us to never forget that the paper profits of the countless Dutch tulip traders in the 17th century eventually ended in a tragic economic catastrophe. This is one instance where gravity will prevail: what goes up will come down soon enough.

Coming soon: country as a service!

The rush of the US towards backwardness can be breathtaking. First, I read in the news that Donald Trump’s FCC voted to repeal a 2015 regulation that prohibited broadband companies from blocking or slowing access to websites or services.  Then I discover that the State Department’s Office of International Communications and Information Policy does not offer any new material other than what is in the Obama administration archive!

ICT

The US is very busy advancing the global digital economy

Watch this video explaining net neutrality using beers in a bar

What you need to know about the FCC’s net neutrality repeal

The retrograde developments in the US got me curious and drew me to that universal wellspring of knowledge  – the Google search bar – to find out which  are the most high tech countries in the world.  I came across the Networked Readiness Index rankings as a way to gauge the ability of countries to innovate in a digital economy.  At the top of the list are the usual suspects – the US, Germany, UK, Japan, Singapore, Finland, the Netherlands, etc. However, two names stood out for me – Luxembourg at No. 9 and Estonia at No. 22. The latter, especially since I even had to check a map to be sure where in Eastern Europe it was exactly.

Networked Readiness Index 2016

And what a find Estonia turns out to be!

After the collapse of the Soviet Union, Estonia methodically and purposefully sought to develop a Unique Selling Point (USP) while at the same time upgrading government services to its 1 million or so inhabitants. The government pushed for ICT education for its citizens and issued a ID card with a chip, a pin code and a USB reader that in combination forms the digital identity of the citizen. It is also the primary means to receive online services conveniently following a “once only” policy which dictates that no single piece of information should be encoded twice.

Today, citizens can vote from their laptops, challenge parking tickets from home, buy a house or apply for a loan and have the system pull their data—income, debt, savings—as may be required. There’s nothing to fill out in doctors’ waiting rooms, because physicians can access their patients’ medical histories. This year, the average Estonian takes only three minutes to complete his tax declarations.

Estonia has managed to offer integrated government services with the safest, privacy friendliest system ever. It is no surprise that it is recognized as the Champion of Europe for the online provision of public services. The transparent, no-contact public service has allowed the country to rise to No. 22 out of 176 countries in the 2016 Global Corruption Index of Transparency International.  In comparison, the Philippines is no. 101. The government estimates that it has also saved 2% of GDP in foregone salaries and operations costs.

How Estonia became the most digital country in the world

Forbes: How Estonia became the digital leader of Europe

Be a Virtual Estonian Citizen

In December 2014, Estonia had an idea that not only Estonian inhabitants, but everyone in the world, should be able to use the country’s digital infrastructure. For €100, anybody over 18 years can acquire e-Residency from over 200 locations worldwide. With your card and pin code you’re granted access to Estonia’s user interface and you’ll receive a digital authorization tool. Your e-Residency gives you access to European payment providers, allows you to start your company digitally,  provides you with various financial and technological tools. You can close a deal using a smart contract, for instance.

The day following the launch,  4 thousand persons from 150 countries had already subscribed.  To date, there are 28 thousand e-Residents – secure in the thought that the backbone of Estonia’s digital security is a blockchain technology called K.S.I.

The New Yorker: Estonia, the digital republic

Estonia believes that their e-Residency project will evolve into something significant as more location independent businesses are born. In April 2016, Estonia flippantly launched the website ‘Country OS’. The site describes the country as a service subscription as follows:

Revolutionary cloud-based country management tool for modern tech-based countries. Get your country management efficiency to a whole new level.

I just can’t wait to outsource our government …..

Christmas market in Estonia

Happy Christmas from e-Estonia!

 

 

 

The people’s money still hidden in offshore banks

With the Marcos-Duterte apologists in Congress moving to abolish (or otherwise marginalize) the PCGG, is there any chance that the Marcos’ stolen wealth can be recovered?

No doubt, the purveyors of fake news will be quick to defend this act by saying that there is nothing to recover in the first place. What is the reality? Time for a fact check….

Grand Corruption

Professor David A.Chaikin of the University of Sydney explains the daunting challenges in recovering the stolen money in the book entitled Corruption and Anti-Corruption edited by Peter Larmour and Nick Wolanin:

A major obstacle in the recovery of the hidden wealth of the Marcos family is that the former President was a master manipulator of financial transactions and used an extensive and complex system of laundering monies through Swiss and offshore banks. Marcos did not generally use his own name in illegal transactions; instead he used nominees such as friends, cronies and layers of foundations and companies to conceal his activities. The Marcos family thrived on the idea of secret names. For example, in a letter dated 18 October 1968, Marcos informed his Swiss bank that the ‘word John Lewis will have the same value as our own personal signatures’… The Marcoses used every laundering scheme available to conceal their investments. At the same time his Swiss banks offered him various instruments of bank secrecy to protect his interests, such as numbered accounts, Liechtenstein Foundations and attorney with professional secrecy obligations. (p.102)

William Saunders

Despite all the difficulty, the PCGG has had some modest successes, recovering about ₱ 170 billion by December 2015. The following Inquirer article lists some of these assets in detail.

Where Marcos stashed multibillion loot

The following article from The Guardian narrates the history of the recovery effort describing it as a story of the PCGG “dragging victories out of the swamp”. Since it was written around the May 2016 elections, it also expresses alarm at the prospect of Bongbong Marcos becoming Vice-president.

The $10bn question: what happened to the Marcos millions?

The Birth of Leaktivism

Without an investigative agency like the PCGG, is there any hope to recover the rest of the Marcos loot? This is where perhaps we can look to the International Consortium of Investigative Journalists (ICIJ), an unstinting collaboration of hundreds of highly credible investigative journalists across the globe aiming to uncover the attempts of some of the world’s wealthiest politicians, businessmen, and sports and art personalities to misuse the global offshore banking system for fraud, tax evasion, evading international sanctions and other illegal acts. In the absence of a properly functioning Freedom of Information Law in all the different countries, this courageous band of journalists have taken it upon themselves to leak offshore financial dealings in an attempt to keep the world’s wealthiest individuals and corporations honest. (That said, the leaking of private information can be vastly controversial because not everyone with offshore deposits can be assumed to have committed a crime – a fact that ICIJ acknowledges.)

In 2015, 11.5 million documents that detail financial and attorney–client information for more than 214,488 offshore entities were leaked by an anonymous source. These documents – since called the Panama Papers – named 12 (then) current and former world leaders, 128 other public officials and politicians, and hundreds of other members of the elites of over 200 countries. Some of the names mentioned included Malcolm Turnbull, Silvio Berlusconi, Benazir Bhutto, Ronald Reagan, Stanley Kubrick, and officials from FIFA.

Irene Marcos Araneta, the youngest child of the dictator Marcos, along with her husband Gregorio Ma. Araneta III was named in the Panama papers. Both are listed as shareholders of Orient Wind Development Limited, registered in the British Virgin Islands.

Before the Panama Papers, there was the 2013 Offshore Leaks based on a cache of 2.5 million files containing information on more than 120,000 offshore companies and trusts worldwide, also revealed by the ICIJ. The ICIJ said that 86 journalists from 46 countries sifted through the data during their 15-month collaborative investigation. In the Philippines, the Philippine Center for Investigative Journalism (PCIJ) was the partner organization.

In the Offshore Leaks probe Ilocos Norte Governor Maria Imelda “Imee” Marcos Manotoc is revealed as one of the beneficiaries of the Sintra Trust, a company based in the British Virgin Islands. Named with Imee are her three sons—Ferdinand Richard Michael Manotoc, Fernando Martin “Borgy” Manotoc and Matthew Joseph Manotoc.

The Philippine references in the ICIJ Offshore Leaks Database

Just last November 2017, the Paradise Papers comprising of 13.4 million confidential electronic documents relating to offshore investments were leaked to the German reporters Frederik Obermaier and Bastian Obermayer from the newspaper Süddeutsche Zeitung. The newspaper shared them with the ICIJ’s network of more than 380 journalists. The papers contain the names of more than 120,000 people and companies. At 1.4 terabytes in size, this is second only to the Panama Papers in 2016 as the biggest data leak in history.

The Paradise Papers Explained in a Video

The database of the Paradise Papers has been recently catalogued and made public but there appears to be no early references to the Marcoses, although many wealthy Filipinos do appear.

Micah White, co-founder of Occupy calls this recent phenomenon as “leaktivism “.  If this can evolve into a widely accepted ethical and professional counterbalance, then we may just be waiting for Imelda’s other shoe to drop.

Imelda's shoes