Q. It seems that many values carried by NGO are typically modern and Western. What kind of problems this creates in more traditional and culturally different countries?

As you said, NGOs are proponents of modern Western values - democracy, women's lib, human rights, civil rights, the protection of minorities, freedom, equality. Not everyone finds this liberal menu palatable. The arrival of NGOs often provokes social polarization and cultural clashes.

On May 11, 2005, Romania will host a two-day exercise simulating a nuclear accident. It will be conducted at the Cernavoda nuclear power plant. But the real radiological emergency is already at hand and unfolding.

Nuclear waste is both an environmental problem and an economic solution in the countries of east Europe and central Asia. Kazakhstan announced in November 2002 that it plans to import other countries' nuclear waste - and get paid for its shoddy disposal-by-burial, contrary to international conventions.

Ironically, the money thus generated is earmarked for ridding of Kazakhstan of its own pile of fissionable trash. This emulates a similar scheme floated five years ago in Russia. The Atomic Energy Ministry planned to import 20,000 tons of nuclear waste to earn $21 billion in the process.

The collapse of the Warsaw Pact left many countries in the former Soviet block with an ageing and prohibitively expensive to maintain nuclear arsenal. Dismantling the war heads - often with American and European Union Euratom funding - yielded mounds of lethal radioactive materials.

Abandoned nuclear test sites - such as the USSR's central facility in Semipalatinsk, Kazakhstan - contain thousands of tons of radioactive leftovers. Add to this the network of decrepit, Chernobyl-like, reactors strewn throughout the region and their refuse and the gargantuan dimensions of the threat emerge.

Take, again, Kazakhstan. According to Mukhtar Dzakishev, then president of Kazatomprom, the country's national nuclear agency, the country is immersed in 230,000 tons of waste. It would cost more than $1 billion to clean. The country should earn this amount in a single year of imports of nuclear litter.

The going rate in Europe is c. $3-5000 per 200-liter barrel, only a fifth of which is spent on its burial in old mines or specially constructed depositories. This translates to a profit of $80-140 per cubic meter of uranium buried - compared to less than $10 per cubic meter of uranium extracted. The countries of east Europe have entered the fray with relish. In 2001, president Putin rushed through the Duma a much-debated law that allows for the importation and disposal of nuclear waste.

Getting rid of nuclear waste and dismantling nuclear facilities - both military and peacetime - do not come cheap.

According to the ELTA news agency, Lithuania's decommissioning of the Ignalina Nuclear Power Plant would require 30 years and should cost $90 million in 2008 alone. In October 2002, Russia's Atomic Energy Minister Yevgeny Adamov pegged the cost of a USA-Russian agreement to dispose of 34 tons of weapons-grade plutonium at $750 million. Russia plans to resell the end product, mixed oxide (MOX), to various countries in Europe and to Japan. MOX can be used to fuel specially-fitted power plants.

The European Commissions, alarmed by these developments in its backyard, announced, according to EUObserver.com, that it "gives priority to geological burial of dangerous material as the safest disposal method to date. Member states will be required to establish national burial sites for the disposal of radioactive waste by 2018. Research for waste management will also be stepped up."

Even private NGO's got into the act. In August 2002, Russia reclaimed from the Vinca Institute of Nuclear Sciences in Belgrade, Yugoslavia 45 kilograms of highly enriched uranium. The Nuclear Threat Initiative (NTI), a Washington-based NGO established by Ted Turner of CNN fame and former Senator Sam Nunn, was instrumental in arranging the air transport of the sensitive substance. According to Radio Free Europe/Radio Liberty, the Vinca Institute conditioned its surrender of the uranium rods on financial aid to dispose of 2.5 tons of spent nuclear fuel. NTI provided the $5 million needed to accomplish the cleanup.

A donor conference, in the framework of the Northern Dimension Environmental partnership (NDEP) pledged in November 2002 c. $110 million to tackle environmental and nuclear waste in northwest Russia. This fund will supplement loans from international financial institutions. Yet, according to the BBC, of the twelve priority projects worth $1.3 billion that have been agreed - not one concerns atomic trash.

The NDEP, set up in 1997, is a partnership of the European Commission, Russia, the European Regional Development Bank, the European Investment Bank, the Nordic Bank and the World Bank. But it is predicated on a crucial document - the Multilateral Nuclear Environment Programme in Russia (MNEPR) - which Russia for long evaded signing.

The sorry state of underfunded efforts to cope with the aftermath of nuclear power and weaponry and the blatant venality that often accompanies shady waste deals provoked a green backlash throughout the otherwise docile region. The Guardian quoted courageous Kazakh environmental activists as saying:

"The same is repeated again and again. It is just another money-making venture ... The World Bank is worried about corruption in Kazakhstan. In our current situation there is no guarantee of public safety, no system for compensation, no confidence in the ability of customs to deal with these cargoes. Everyone has a human right to a safe environment - but apparently not here."

Similar sentiments are expressed by groups in Russia, Romania, Bulgaria, Yugoslavia, Ukraine, the Czech Republic, Poland and elsewhere. Being "environmentally correct" is so important that Tanjug, the Yugoslav news agency, in its relentless campaign against NATO, implausibly accused Germany of storing its waste in the mines of Kosovo.

A prime example of activism involved a Russian scientific expedition which found a nuclear submarine dumped, with spent radioactive fuel, in the northern Kara Sea. According to news agencies, quoting environmental groups, dumping nuclear waste, hundreds of submarines and decommissioned nuclear reactors into Arctic waters was common practice in the Soviet Union.

In late 2002, the governor of the Murmansk region, bordering on Norway, has announced a 6-year cleansing program of the Kola peninsula, designed to assuage the worried Scandinavians. The Norwegians built a waste recycling facility in the area, constructed a special train to ferry the waste away and invested in renovating a storage dump.

Many east European countries do not store nuclear waste but serve merely as transit routes. The waste the Kazakhs plan to dispose of, for instance, should cross Russian territory. Yet, the Russians are the easy part. In 1998, they have agreed to continue to store in east Siberia fission by-products from Bulgaria's controversial Soviet-built Kozloduy nuclear power plant. Russia also stores waste from Slovakia, Hungary, the Czech Republic and Lithuania. Waste disposal was part of the standard construction contracts of Soviet reactors abroad.

But getting the waste to Russia often requires permission from other, a lot less forthcoming, countries such as Moldova, Ukraine and Romania. By the beginning of 2003, according to the Bulgarian reactor's management, the old storage pits were exhausted and the plant had to close down.

According to the Regional Environmental Center, the transit countries cite ill-equipped railways, antiquated containers and other environmental concerns as the reasons for their reluctance. In reality, they are under pressure by the European Union and the USA to collaborate with waste transport and disposal companies in the West, such as British Nuclear Fuels (BNFL), or Cogema. In the wastelands that constitute large swathes of the post-communist world, nuclear waste, it seems, is a growth industry.
O

Offest, Barter, and Countertrade

In December 2002, Poland decided to purchase 48 F-16 Falcons from Lockheed Martin Corporation - an American defense contractor. Pegged at $3.5 billion, this is the biggest defense order ever issued by an east or central European country. The financial package includes soft loans and a massive offset program - purchases from Polish manufacturers that more than erase the costs of the deal in foreign exchange.

Offset in all its forms - including co-production, licensing, subcontracting, and joint ventures - is not uncommon in the defense industry. It is being offered even to far richer clients such as Israel. But in central and east Europe it is more prevalent than the West realizes.

According to numerous studies, barter-like arrangements (known throughout the region as "compensation") constitute between 20 and 40 percent of all transactions in the economies of the former Soviet bloc. Corporate debts to suppliers, payments for goods and services, even taxes - all have a non-cash component or are entirely demonetized.

The implosion of communism led to a rapid shrinking of the manufacturing base and the evaporation of the agricultural and mining sectors in many countries in transition. Export-derived earnings in hard currency collapsed even as millions lost their jobs and their purchasing power. Unemployment affects one fifth of the population in Poland, one third in Macedonia and three fifths in Kosovo, for instance.

Rather than remonetize these cash-bleeding economies, the IMF imposed strict austerity programs on the entire area, further eroding disposable incomes and intra-regional trade. Countertrade, barter, buyback, offset, clearing, technology transfer and other non-cash dealings flourished.

Moreover, the clearing system of the now defunct eastern trade bloc, COMECON - the Council of Mutual Economic Assistance (CMEA), was based on effective barter and the use of a fictitious "wooden" ruble. From Hungary to Cuba, communist countries were coerced into outlandish terms of trade, often beneficial to the Soviet Union or to a member in need. Mounting debts led to the disintegration of the entire edifice and Russia was reduced to giving east European countries aircraft and other weapons systems in lieu of cash disbursements.

Russia reimburses Kazakhstan with (shoddy) goods for leasing the Baikonur Cosmodrome. Until 2000, it was common practice in the Russian Federation to pay wage arrears, inter-enterprise debt and back taxes in kind. Russia and Turkmenistan accept food and other commodities, semi-finished products and construction services from Ukraine, Armenia and Belarus in exchange for their gas debts and, in Russia's case, for disposing of Ukraine's nuclear waste.

The recipients often complain of the quality of the products or services they receive - and of recurrent breaches of delivery schedules and quantities. But they have little choice. Ukraine is one of Turkmenistan's major export clients, for instance. Nor are these exchanges post-communist phenomena. Canadian firms, led by AECL - Atomic Energy of Canada Limited - were forced to accept Romanian goods for their nuclear reactors throughout the late 1980s.

There is a general misconception that barter is a thing of the past. Far from it. In the last six months of 2002, payments-in-kind to Gazprom, the Russian energy behemoth, have tripled due to an increase in its tariffs. The use of "veksels" (mostly corporate promissory notes) surged 60 percent. Hence the rise to prominence of barter experts, such as Igor Makarov, who, as general manager of Itera, oversaw Gazprom's sales of gas throughout the Commonwealth of Independent States.

As prices are adjusted to reflect waning state subsidies, consumers' purchasing power diminishes and countertrade transactions burgeon. A global recession coupled with the woes specific to transition from communism to capitalism herald an era of unmanageable inter-corporate debt. In tiny Macedonia, it is thought to have surpassed $600 million in 2001 - close to one fifth of GDP. The bulk of such debt is ultimately settled by barter.

Proponents of barter trade - mainly a proliferation of Western consultancies, financial boutiques and trading companies - count their advantages thus (from the Export911.com Web site):

The US Embassy in Moscow counters by describing the nefarious effects of barter on the Russian economy:

The demonetization of the economy and the distortion of the price signal (which ensures the proper allocation of economic resources) are not the only pernicious effects of non-cash business.

Barter transactions tend to enhance the militarization of the region. No one wants Russian TV sets or Ukrainian stockings. But MiG fighter planes and Kalkan and Grif patrol boats are in great demand. Turkmenistan, for instance, has built an entire Caspian Sea coast guard out of its gas-for-goods agreement with Ukraine signed last year.

Non-cash transactions are an integral part of the informal sector of the economy, estimated to constitute at least one third of the region's total gross domestic product. They are impossible to track, let alone tax. They are conducive to capital flight and offshore stashing of export proceeds. Technically, barter deals are a kind of non-tariff barrier as they interfere with the free market by binding specific buyers to given sellers. Hence the recent Russian-Chinese agreement to ban non-cash transactions in their border areas.

Countertrade deals are complex and multi-phased. If improperly structured, they leave a lot of space for corruption and worse. Radio Free Europe/Radio Liberty reported that the military court of the Moscow garrison sentenced in April 2002 the former head of the Defense Ministry's Main Directorate of Military Budget and Finances, Colonel-General Georgi Oleinik, to three years in prison.

In a typical scam - oft-repeated in Chechnya - Oleinik absconded in 1996-1997 with some $450 million. The money belonged to Ukrainian firms and was paid out in the framework of a multistage barter deal. It was earmarked for the purchase of materiel for the Russian army. Interestingly, in his defense, Oleinik insisted that the deal was authorized by former Finance Minister Andrei Vavilov and other senior officials.

Still, in the long-run, barter is doomed. As more former Soviet satellites either divert their trade towards the European Union or join it as members, countertrade will be restricted to the financially backward economies of the former Soviet Bloc. In time, even these laggards will have to face market realities - especially the use of cash as the foundation of the price mechanism and the optimal allocation of scarce economic resources.

Put vernacularly, the citizens of barter-addicted countries will inevitably grow disenchanted with shoddy and shabby goods delivered late. Imports from and exports to cash paying destinations will surge. "Ghost" factories will close down, releasing capacity to more productive entrants. Cash-starved governments will deepen and widen tax collection. A foreign-owned banking system will do a better job of matching savings to investments. Barter will be reduced to a marginal, last resort, activity.

The Organisation for Economic Cooperation and Development (OECD) tried and failed to find proof or traces of widespread outsourcing and offshoring. “There is little hard evidence of the extent of international outsourcing and offshoring, despite widespread media attention.” - its baffled analysts conclude in a June 2005 report.

Outsourcing is the performance of the business functions and competencies of the firm (call or data processing, software engineering, manufacturing, research and development, customer services, payroll management) by an outside contractor. Offshoring is outsourcing beyond the borders of the firm's domicile, to a foreign supplier abroad or to the firm's overseas or cross-border subsidiaries.

Outsourcing and, even more so, offshoring are perceived as a threat to job security in the West, where wages are much higher and job perks more numerous and expensive to provide. Foreign data processing firms gain access to sensitive data. Facilities in hostile countries or potential geopolitical rivals, such as China and India, may compromise national security.

Even the OECD admits that, in the words of The Economist, "close to 20% of total employment in the 15 pre-expansion EU countries, America, Canada and Australia could 'potentially be affected' by the international sourcing of services activities."

In a May 2005 report, titled "The Emerging Global Labor Market", McKinsey Global Institute estimated that in 2003 there were a mere 1.5 million outsourced service jobs. The number is projected to soar to 4.1 million in 2008. But even this is a tiny drop in a massive ocean. In the USA, note the authors, in the year to March 2005, more than 4.6 million people start in new jobs - monthly!

Offshoring is a growth industry not only in India. Export of business services has recently mushroomed in Ireland, Estonia, and Sweden - all European Union members.

Even places such a Jamaica, not exactly a hotbed of innovation and technology, benefit.

OverDrive - an e-commerce, software conversion and e-publishing applications leader - has expanded an e-book technology centre by adding 200 e-book editors. This happened in Montego Bay, Jamaica - one of the less privileged spots on earth. The centre now provides a vertical e-publishing service - from manuscript editing to conversion to Quark (for POD), Adobe, and MS Reader ebook formats. Thus, it is not confined to the classic sweatshop cum production centre so common in Less Developed Countries (LDC's). It is a full fledged operation with access to cutting edge technology.

The Jamaican OverDrive is the harbinger of things to come and the outcome of a confluence of a few trends.

First, there is the insatiable appetite big publishers (such as McGraw-Hill, Random House, and Harper Collins) have developed to converting their hitherto inertial backlists into e-books. Gone are the days when e-books were perceived as merely a novel form of packaging. Publishers understood the cash potential this new distribution channel offers and the value added to stale print tomes in the conversion process. This epiphany is especially manifest in education and textbook publishing.

Then there is the maturation of industry standards, readers and audiences. Both the supply side (title lists) and the demand side (readership) have increased. Giants like Microsoft have successfully entered the fray with new e-book reader applications, clearer fonts, and massive marketing. Retailers - such as Amazon - opened their gates to e-books. A host of independent publishers make good use of the negligible-cost distribution channel that the Internet is. Competition and positioning are already fierce - a good sign.

The Internet used to be an English, affluent middle-class, white collar, male phenomenon. It has long lost these attributes. The digital divides that opened up with the early adoption of the Net by academe and business - are narrowing. Already there are more women than men users and English is the language of less than half of all web sites. The wireless Net grants developing countries the chance to catch up.

Astute entrepreneurs are bound to take advantage of the business-friendly profile of the manpower and investment-hungry governments of some developing countries. It is not uncommon to find a mastery of English, a college degree in the sciences, readiness to work outlandish hours at a fraction of wages in Germany or the USA - all combined in one employee in these deprived countries. India has sprouted a whole industry based on these competitive endowments.

Here is how Steve Potash, OverDrive's CEO, explained his daring move in OverDrive's press release dated May 22, 2001:

"Everyone we are partnering with in the US and worldwide has been very excited and delighted by the tremendous success and quality of eBook production from OverDrive Jamaica. Jamaica has tremendous untapped talent in its young people. Jamaica is the largest English-speaking nation in the Caribbean and their educational and technical programs provide us with a wealth of quality candidates for careers in electronic publishing. We could not have had this success without the support and responsiveness of the Jamaican government and its agencies. At every stage the agencies assisted us in opening our technology centre and staffing it with trained and competent eBook professionals. OverDrive Jamaica will be pioneering many of the advances for extending books, reference materials, textbooks, literature and journals into new digital channels - and will shortly become the foremost centre for eBook automation serving both US and international markets."

Druanne Martin, OverDrive's Director of publishing services elaborated:

Then Jamaican Minister of Industry, Commerce and Technology, the Hon. Phillip Paulwell reciprocated:

There is nothing new in outsourcing back office work (insurance claims processing, air ticket reservations, medical records maintenance) to third world countries, such as (the notable example) India. Research and Development is routinely farmed out to aspiring first world countries such as Israel and Ireland.

But OverDrive's Jamaican facility is an example of something more sophisticated and more durable. Western firms are discovering the immense pools of skills, talent, innovation, and top notch scientific and other education often offered even by the poorest of nations. These multinationals entrust the locals now with more than keyboarding and responding to customer queries using fake names.

The Jamaican venture is a business partnership. In a way, it is a topsy-turvy world. Digital animation is produced in India and consumed in the States. The low compensation of scientists attracts the technology and R&D arms of the likes of General Electric to Asia and Intel to Israel. In other words, there are budding signs of a reversing brain drain - from West to East.

E-publishing is at the forefront of software engineering, e-consumerism, intellectual property technologies, payment systems, conversion applications, the mobile Internet, and, basically, every important trend in network and computing and digital content. Its migration to warmer and cheaper climates may be inevitable. OverDrive sounds happy enough.