DAILY NATION 1 NIC CHEESEMAN 1.2 HOW TO RAISE REVENUE WITHOUT UPSETTING VOTERS DAILY NATION 5 NIC CHEESEMAN & DOMINIC BURBIDGE 1.3 HOW TO ACHIEVE EFFECTIVE PUBLIC PARTICIPATION DAILY N
Trang 1D EVOLUTION IN K ENYA
DR DOMINIC BURBIDGE & DR NIC CHEESEMAN
DOMINIC.BURBIDGE@POLITICS.OX.AC.UK
NICHOLAS.CHEESEMAN@POLITICS.OX.AC.UK
1 CHALLENGES TO THE EARLY STAGES OF DEVOLUTION
1.1 WHILE DEVOLUTION MAY WORK, IS IT SUSTAINABLE? (DAILY NATION) 1
NIC CHEESEMAN
1.2 HOW TO RAISE REVENUE WITHOUT UPSETTING VOTERS (DAILY NATION) 5
NIC CHEESEMAN & DOMINIC BURBIDGE
1.3 HOW TO ACHIEVE EFFECTIVE PUBLIC PARTICIPATION (DAILY NATION) 9
NIC CHEESEMAN, DOMINIC BURBIDGE & WILLIAM ATTWELL
3 ACADEMIC REVIEW
(JOURNAL OF MODERN AFRICAN STUDIES)
NIC CHEESEMAN, GABRIELLE LYNCH & JUSTIN WILLIS
3.2 PLUS ÇA CHANGE? COUNTY-LEVEL POLITICS IN KENYA AFTER DEVOLUTION 39
(JOURNAL OF EASTERN AFRICAN STUDIES)
AGNES CORNELL & MICHELLE D’ARCY
3.3 DEMOCRACY VERSUS DIVERSITY: ETHNIC REPRESENTATION IN A DEVOLVED KENYA 41
DOMINIC BURBIDGE
Trang 3
:KLOHGHYROXWLRQPD\ZRUNLVLWVXVWDLQDEOH"
7KLVLVQRWMXVWDTXHVWLRQRIZKHWKHUWKHQDWLRQDOJRYHUQPHQWZLOODOORZWKHFRXQWLHVWR IORXULVK
'HYROXWLRQDQG3ODQQLQJ&DELQHW6HFUHWDU\$QQH:DLJXUX$MXGJHKDVEDUUHG03VIURPGHEDWLQJD 0RWLRQWRLPSHDFKKHU),/(3+272_),/(_1$7,210(',$*5283
,Q6XPPDU\
0DQ\RIWKHSROLFLHVWKDWKDYH³GHFHQWUDOLVHG´SRZHULQ.HQ\DRYHUWKHODVW\HDUVKDYH
SUHWHQGHGWRPRYHSRZHUFORVHUWRWKHSHRSOHZKLOHDFWXDOO\VWUHQJWKHQLQJWKHFRQWURORIFHQWUDO JRYHUQPHQW
%XWLQUHDOLW\KHZDVOHVVLQWHUHVWHGLQGHFHQWUDOLVLQJSRZHUDQGPRUHLQWHUHVWHGLQUHVWUXFWXULQJ WKHVWDWHLQRUGHUWREUHDNXSWKHDGPLQLVWUDWLYHDQGSROLWLFDOQHWZRUNVWKDWKDGJURZQVWURQJ XQGHUWKHSUHVLGHQF\RIKLVSUHGHFHVVRU-RPR.HQ\DWWD
$FFRUGLQJWR'RPLQLF%XUELGJHDQDVWXWHREVHUYHURI.HQ\DEHWZHHQSHUFHQWDQGSHU FHQWRIJRYHUQPHQWUHYHQXHKDVEHHQGLVWULEXWHGWRWKHFRXQWLHVGHSHQGLQJRQZKLFKVHWRI ILJXUHV\RXFKRRVHWREHOLHYHPRUHRQZKLFKODWHU
:HDUHQRZRYHURQH\HDULQWR.HQ\D¶VH[SHULPHQWZLWKGHYROYHGJRYHUQPHQWDQGWKHUHKDVEHHQD ORWRIWDONDERXWZKHWKHURUQRWLWLVZRUNLQJ
+RZHYHUIHZSHRSOHDUHWDONLQJDERXWDGLIIHUHQWEXWMXVWDVLPSRUWDQWLVVXH,VLWVXVWDLQDEOH"
7KLVLVQRWMXVWDTXHVWLRQRIZKHWKHUWKHQDWLRQDOJRYHUQPHQWZLOODOORZWKHFRXQWLHVWRIORXULVK,WLV DOVRDTXHVWLRQRIWKHFDSDFLW\RIWKHFRXQWLHVWRUDLVHUHYHQXHORFDOO\LQRUGHUWRVXSSOHPHQWWKH FHQWUDOWUDQVIHUVWKH\UHFHLYHWKURXJKWKH&RPPLVVLRQRQ5HYHQXH$OORFDWLRQ
Trang 4,QWKLVFROXPQ,DUJXHWKDWWKHVLJQVDUHPL[HGEHFDXVHGHYROXWLRQDSSHDUVWREHSROLWLFDOO\ VXVWDLQDEOHEXWHFRQRPLFDOO\SUREOHPDWLF
8QIRUWXQDWHO\WKHVHSRLQWVDUHRIWHQPLVVHGEHFDXVHPXFKRIWKHUHSRUWLQJRQGHYROXWLRQKDVEHHQ VHQVDWLRQDOLVWDQGPLVOHDGLQJ7RSXWWKLVULJKW,DOVRWU\WRFRUUHFWVRPHPLVFRQFHSWLRQVDERXWWKH ZD\LQZKLFKGHYROXWLRQLVSOD\LQJRXW
+DVWKHUHUHDOO\EHHQGHFHQWUDOLVDWLRQ"
0DQ\RIWKHSROLFLHVWKDWKDYH³GHFHQWUDOLVHG´SRZHULQ.HQ\DRYHUWKHODVW\HDUVKDYHSUHWHQGHG WRPRYHSRZHUFORVHUWRWKHSHRSOHZKLOHDFWXDOO\VWUHQJWKHQLQJWKHFRQWURORIFHQWUDOJRYHUQPHQW
7KLQNEDFNWRWKH'LVWULFW)RFXVIRU5XUDO'HYHORSPHQWSROLF\LQWURGXFHGE\WKHQ3UHVLGHQW'DQLHO DUDS0RLLQ0U0RLMXVWLILHGLWRQWKHEDVLVWKDWLWZRXOGHQDEOHWKHJRYHUQPHQWWREHPRUH UHVSRQVLYHWRWKHQHHGVRIWKHSHRSOH
%XWLQUHDOLW\KHZDVOHVVLQWHUHVWHGLQGHFHQWUDOLVLQJSRZHUDQGPRUHLQWHUHVWHGLQUHVWUXFWXULQJWKH VWDWHLQRUGHUWREUHDNXSWKHDGPLQLVWUDWLYHDQGSROLWLFDOQHWZRUNVWKDWKDGJURZQVWURQJXQGHUWKH SUHVLGHQF\RIKLVSUHGHFHVVRU-RPR.HQ\DWWD
$VDUHVXOW0U0RLPDQLSXODWHGWKH'LVWULFW)RFXVUHIRUPVLQRUGHUWRFUHDWHQHZSROLWLFDOQHWZRUNV WKDWKHFRXOGWUXVWDQGWRVWUHQJWKHQKLVSROLWLFDOFRQWURO,QWKHSURFHVVKHGLGQRWGHFHQWUDOLVH SRZHUEXW³GHFRQFHQWUDWHG´LW
,QRWKHUZRUGVUDWKHUWKDQFUHDWLQJPRUHDXWRQRP\IRUORFDOOHDGHUVWKHFKDQJHVLQWURGXFHG WKURXJK'LVWULFW)RFXVOHGLQWKHZRUGVRI-RHO%DUNDQDQG0LFKDHO&KHJHWR³WKHSRVWLQJRI JUHDWHUQXPEHUVRIPRUHFHQWUDOSHUVRQQHOWRDQH[SDQGHGQXPEHURIILHOGRIILFHVWRH[HUWJUHDWHU FRQWURORYHUGHYHORSPHQWLQLWLDWLYHVRQWKHSHULSKHU\´
)ROORZLQJWKHLQWURGXFWLRQRIWKH&RQVWLWXWLRQPDQ\FRPPHQWDWRUVH[SHFWHGDVLPLODUVWRU\ ZLWKWKHFRXQWU\¶VODWHVWDWWHPSWDWGHFHQWUDOLVDWLRQ$GPLQLVWUDWLYHFRQWUROZRXOGEHNHSWLQ 1DLURELWKHPRQH\ZRXOGQRWIORZWRWKHFRXQWLHVDQGFRXQW\OHYHOSROLWLFDOOHDGHUVZRXOGEHFR RSWHGE\WKHQDWLRQDOJRYHUQPHQW
'HVSLWHVRPHHIIRUWVE\WKH-XELOHH$OOLDQFHDQGWKHFLYLOVHUYLFHWREULQJWKHVHRXWFRPHVDERXWWKLV KDVQRWRFFXUUHG$FFRUGLQJWR'RPLQLF%XUELGJHDQDVWXWHREVHUYHURI.HQ\DEHWZHHQSHUFHQW DQGSHUFHQWRIJRYHUQPHQWUHYHQXHKDVEHHQGLVWULEXWHGWRWKHFRXQWLHVGHSHQGLQJRQZKLFKVHW RIILJXUHV\RXFKRRVHWREHOLHYHPRUHRQZKLFKODWHU
(YHQLIZHVWLFNZLWKWKHORZHUQXPEHUWKLVLVDUHPDUNDEOHFKDQJHWR.HQ\D¶VHFRQRPLFODQGVFDSH HVSHFLDOO\ZKHQ\RXDGGLQWKH&RQVWLWXHQF\'HYHORSPHQW)XQG
,WLVWKHUHIRUHFOHDUWKDWFRQVLGHUDEOHILQDQFLDOFORXWKDVEHHQGHYROYHGWRWKHFRXQWLHV:KDWRI SROLWLFDOSRZHU"+HUHWRRFRXQWLHVKDYHGRQHUDWKHUEHWWHUWKDQPDQ\VFHSWLFVLQLWLDOO\SUHGLFWHG
$VZHKDYHVHHQWKHUHDUHIHZ²DQGPDQ\ZRXOGVD\WRRIHZ²FRQVWUDLQWVRQKRZFRXQW\ JRYHUQPHQWVFDQXVHWKHLUEXGJHWV
,WLVWUXHWKDWFRXQWLHVKDYHVSHFLILFVHUYLFHVVXFKDVKHDOWKFDUHWKDWWKH\DUHFRQVWLWXWLRQDOO\REOLJHG WRIXQGDQGUXQEXWEH\RQGWKLVWKHUHLVFRQVLGHUDEOHVFRSHIRUJRYHUQRUVWRSXUVXHWKHLURZQ SULRULWLHV²LIWKH\FDQSHUVXDGHWKH0HPEHUVRIWKH&RXQW\$VVHPEOLHV0&$V WREDFNWKHPXS
&RXQW\&RPPLVVLRQHUVDQGQDWLRQDOFLYLOVHUYDQWVKDYHVRXJKWWROLPLWWKHVFRSHRIDFWLYLWLHVWKDW JRYHUQRUVFDQSXUVXHEXWWKHJUHDWYDULDWLRQLQWKHEXGJHWVWKDWKDYHVRIDUEHHQSUHVHQWHG GHPRQVWUDWHVWKDWFRXQWLHVDUHJHQXLQHO\LQFRQWURORIKRZWRVSHQGWKHLURZQUHYHQXHV
$WWKHVDPHWLPHWKHIDFWWKDWVRPDQ\FRXQWLHVDUHQRZFRQWUROOHGE\RSSRVLWLRQJRYHUQRUV²RUDW OHDVWE\JRYHUQRUVWKDWZHUHQRWHOHFWHGDVPHPEHUVRI-XELOHH²PHDQVWKDW.HQ\DQRZIHDWXUHVD VHWRILQIOXHQWLDOUHJLRQDOOHDGHUVZKRKDYHDYHVWHGLQWHUHVWLQGHIHQGLQJDQGVWUHQJWKHQLQJ GHYROXWLRQ
Trang 5,WLVDOVRVLJQLILFDQWWKDWFRXQWLHVKDYHWKHFDSDFLW\WRUDLVHWKHLURZQUHYHQXHVPRVWQRWDEO\ WKURXJKSURSHUW\WD[HVEXWDOVRWD[HVRQHQWHUWDLQPHQW
7KLVLVVRPHWKLQJWKDWFHQWUDOJRYHUQPHQWVW\SLFDOO\WU\WRSUHYHQWEHFDXVHWKHDELOLW\WRJHQHUDWHDQ LQGHSHQGHQWVRXUFHRILQFRPHJLYHVORFDOJRYHUQPHQWVDQHFRQRPLFIUHHGRPWKDWKDVWKHSRWHQWLDO WROLEHUDWHWKHPIURPFHQWUDOJRYHUQPHQWFRQWURO
7KDW.HQ\DQFRXQWLHVHQMR\WKLVSULYLOHJHLVDFOHDUVLJQWKDW²DWSUHVHQWDWOHDVW²ZHDUHVHHLQJ UHDOGHFHQWUDOLVDWLRQUDWKHUWKDQ³GHFRQFHQWUDWLRQ´
,VGHYROXWLRQILQDQFLDOO\VXVWDLQDEOH"
7KHODVW\HDUKDVVHHQDSLWFKHGEDWWOHEHWZHHQFRXQW\OHDGHUVDQGWKHFHQWUDOJRYHUQPHQWRYHUWKH SURSRUWLRQRIGHYROYHGQDWLRQDOIXQGV$VSDUWRIWKLVZDURIZRUGVGLIIHUHQWILJXUHVIRUWKH
SURSRUWLRQRIVWDWHIXQGVDUHGHYROYHGWRWKHFRXQWLHVKDYHEHHQEDQGLHGDERXW
,WLVLPSRUWDQWWRXQGHUVWDQGZKHUHWKHVHGLIIHUHQWILJXUHVFRPHIURP
'RPLQLF%XUELGJHUHFHQWO\UHPLQGHGPHWKDWWKH&RQVWLWXWLRQRQO\UHTXLUHVWKHJRYHUQPHQWWR WUDQVIHUQRWOHVVWKDQSHUFHQWRIJRYHUQPHQWUHYHQXHVWRWKHFRXQWLHVEDVHGRQWKHODVW\HDURI DXGLWHGDQGDSSURYHGQDWLRQDODFFRXQWV
$WSUHVHQWWKHODVWVHWRIDFFRXQWVWKDWZHUHDXGLWHGDQGDSSURYHGE\WKH1DWLRQDO$VVHPEO\GDWH IURP7KLVPHDQVWKDWFRQVWLWXWLRQDOO\WKHJRYHUQPHQWLVRQO\UHTXLUHGWRWUDQVIHUSHU FHQWRIUHYHQXHVEDVHGRQWKDW\HDU
7KLVLVVLJQLILFDQWEHFDXVHWKHVHILJXUHVDUHQRZFRQVLGHUDEO\RXWRIGDWH$VWKH.HQ\DQHFRQRP\ JURZVWKHFHQWUDOJRYHUQPHQWFDQPHHWWKHSHUFHQWWKUHVKROGIURPE\DOORFDWLQJD ORZHUSURSRUWLRQRILWVFXUUHQWUHYHQXH
,WLVRQWKLVEDVLVWKDWPHPEHUVRIWKH-XELOHH$OOLDQFHKDYHEHHQDEOHWRFODLPWKDWWKHSURSRUWLRQRI UHYHQXHVGHYROYHGWRWKHFRXQWLHVKDVLQFUHDVHGVLQFHDQGQRZVWDQGVDWPRUHWKDQSHU FHQW
$JDLQVWWKLVHFRQRPLFVOHLJKWRIKDQGRQHFRXOGDUJXHWKDWLWLVLQWKHVSLULWRIWKH&RQVWLWXWLRQWKDW WKHFDOFXODWLRQVKRXOGEHPDGHQRWRQWKHEDVLVRIROGGDWDIURPEXWUDWKHURQXVLQJ ILJXUHVIURPWKHODVWILQDQFLDO\HDU
,QGHHGWKLVLVZKDWWKH&RQVWLWXWLRQDQWLFLSDWHGDVJRYHUQPHQWILQDQFHVDUHVXSSRVHGWREHDXGLWHG DQGDSSURYHGDQQXDOO\,I\RXZHUHWRFDOFXODWHWKHSURSRUWLRQRIIXQGVWKDWDUHGLVWULEXWHGWRWKH FRXQWLHVRQWKHEDVLVRIWKHILQDQFLDO\HDUWKDWJRLQJWRWKHFRXQWLHVZRXOGEHVLJQLILFDQWO\ ORZHUDWSHUFHQW
$OWKRXJKWKLVLVVWLOODERYHWKHFRQVWLWXWLRQDOWKUHVKROGLWLVFRQVLGHUDEO\ORZHUWKDQWKHDPRXQWWKDW WKHFHQWUDOJRYHUQPHQWWHQGVWRFLWH,WLVDOVRSRVVLEOHWKDWWKLVILJXUHZLOOGLSEHORZSHUFHQWLQ WKHIXWXUHXQOHVVPRUHUHFHQWDFFRXQWVDUHDXGLWHGDQGDSSURYHG
7KHPRUHPRGHVWVXPVEHLQJGHYROYHGWRWKHFRXQWLHVUDLVHVHULRXVTXHVWLRQVDERXWWKHILQDQFLDO VXVWDLQDELOLW\RIGHFHQWUDOLVDWLRQ
$VWKH&5$LVZHOODZDUHWKHDELOLW\RIPDQ\FRXQWLHVWROLYHXSWRWKHH[SHFWDWLRQVRIFLWL]HQVZLOO GHSHQGRQWKHLUFDSDFLW\WRJHQHUDWHUHYHQXHORFDOO\
%XWKRZIHDVLEOHLVWKLV"$OOFRXQWLHVFDQOHY\WKHVDPHWD[HVEXWWKLVGRHVQRWPHDQWKDWWKH\ZLOO UDLVHWKHVDPHUHYHQXHV
%XUELGJH¶VGDWDRQWKHIXQGVUDLVHGE\FRXQW\JRYHUQPHQWVUHYHDOWKDWRQO\DVPDOOQXPEHURI FRXQWLHVKDYHJHQHUDWHGVLJQLILFDQWORFDOUHYHQXH
Trang 60RPEDVD7KHUHVWKDYHPDGHOLWWOHLPSUHVVLRQZKDWVRHYHU²GHVSLWHHVWLPDWLQJFRQVLGHUDEOHORFDO UHYHQXHVLQWKHLUEXGJHWV
2IFRXUVHLWLVVWLOOHDUO\GD\VEXWWKLVVKRXOGVHUYHDVDZDNHXSFDOOWKDWQRWDOOFRXQWLHVZLOOEHDEOH WRJHQHUDWHVLJQLILFDQWLQFRPHORFDOO\
:KLOHVRPHFRXQWLHVDUHVWUXJJOLQJWRUDLVHPRQH\EHFDXVHWKH\KDYHQRW\HWHVWDEOLVKHGHIIHFWLYH V\VWHPVRIWD[DWLRQDQGWD[FROOHFWLRQLQRWKHUVWKHSUREOHPLVWKDWWKHUHLVQRWPXFKWKDWFDQ SURILWDEO\EHWD[HG
,QRWKHUZRUGVIRUFRXQWLHVWKDWGRQRWHQMR\KLJKOHYHOVRIWRXULVPODUJHLQGXVWULDOVHFWRUVRUKLJK SURSHUW\YDOXHVLWPD\FRVWPRUHWRDGPLQLVWHUQHZWD[HV
0RUHRYHUDOWKRXJKLWLVSRVVLEOHWREULQJWKHDJULFXOWXUDODQGLQIRUPDOVHFWRUVLQWRWKHWD[QHWGRLQJ WKLVRYHU]HDORXVO\ULVNVPDNLQJWKHVHDFWLYLWLHVXQSURILWDEOHZLWKDQHJDWLYHLPSDFWRQSRYHUW\DQG HPSOR\PHQW
2QHZD\WRERRVWFRXQW\UHYHQXHVZRXOGEHIRUQDWLRQDODQGFRXQW\JRYHUQPHQWVWRZRUNWRJHWKHUWR FRPHXSZLWKDQHZSURFHVVWKURXJKZKLFKODQGFDQEHUHYDOXHGDQGHIIHFWLYHO\WD[HG
'RLQJWKLVZRXOGLQFUHDVHWKHUHYHQXHJHQHUDWLQJSRWHQWLDORIPDQ\FRXQWLHVEXWDWSUHVHQWWKH FRPELQDWLRQRIDFKDOOHQJLQJOHJDOVLWXDWLRQDQGVWURQJYHVWHGLQWHUHVWVDUHSUHYHQWLQJLWIURPWDNLQJ SODFH±VRPHWKLQJWKDW,ZLOOWDONDERXWDWJUHDWHUOHQJWKLQP\QH[WFROXPQ
7KHZD\IRUZDUG
,WLVWKHUHIRUHLPSRUWDQWWRWDNHVHULRXVO\WKHSURVSHFWWKDWVRPHFRXQWLHVPD\UHPDLQGHSHQGHQW RQFHQWUDOJRYHUQPHQWWUDQVIHUVIRUPRUHWKDQSHUFHQWRIWKHLUIXQGV,IWKLVRFFXUVWKUHHWKLQJV ZLOOQHHGWRKDSSHQ
)LUVWFRXQWLHVZLWKOLPLWHGFDSDFLW\WRUDLVHIXQGVZLOOQHHGWRIDFHUHDOLW\DQGVWRSLQFOXGLQJRYHUO\ RSWLPLVWLFHVWLPDWHVIRUORFDOO\JHQHUDWHGUHYHQXHLQWKHLUEXGJHWV8QOHVVWKLVLVGRQHWKHEXGJHW SURFHVVZLOOEHDIDUFHDQGFRXQWLHVZLOOQRWEHDEOHWRHIIHFWLYHO\SODQWKHLUGHYHORSPHQWH[SHQGLWXUH
6HFRQGDQGUHODWHGO\FRXQWLHVZLWKORZUHYHQXHJHQHUDWLQJFDSDFLW\ZLOOQHHGWRFXWWKHLUFORWK DFFRUGLQJO\ZKLFKZLOOPHDQDGRSWLQJPRUHPRGHVWHFRQRPLFSODQV
7KHWKLUGWKLQJLVPRUHIDUUHDFKLQJEHFDXVHLWZRXOGFKDQJHWKHZD\.HQ\DQVWKLQNDERXW
GHFHQWUDOLVDWLRQ,ISRRUHUFRXQWLHVZLWKORZHUVHOIJHQHUDWHGIXQGVWXUQRXWWREHXQDEOHWRSURYLGH WKHFRUHIXQFWLRQVWKDWWKH\KDYHEHHQHQWUXVWHGZLWKWKHFHQWUDOJRYHUQPHQWGRQRUVFLYLOVRFLHW\ DQGWKH.HQ\DQSHRSOHZLOOQHHGWRUHFRJQLVHWKDWWKHV\VWHPPD\KDYHWREHPRGLILHG
0RUHVSHFLILFDOO\WKHUHGLVWULEXWLYHHOHPHQWRIWKHIRUPXODXVHGE\WKH&5$WRGHWHUPLQHDOORFDWLRQV ZRXOGQHHGWREHUHYLVHGWRWDNHLQWRDFFRXQWQRWRQO\SRYHUW\SRSXODWLRQDQGODQGEXWDOVRWKH GHHSLQHTXDOLWLHVOLNHO\WRHPHUJHLQWHUPVRIORFDOO\JHQHUDWHGUHYHQXH
7KLVZRXOGEHDVLJQLILFDQWFKDQJHHVSHFLDOO\LQDFRXQWU\ZKHUHWKHLGHDRISURJUHVVLYHWD[DWLRQ GRHVQRWKDYHDORQJKLVWRU\EXWLWPD\EHQHFHVVDU\WRHQVXUHWKHILQDQFLDOVXVWDLQDELOLW\RI.HQ\D¶V QHZSROLWLFDOV\VWHP
1LF&KHHVHPDQWHDFKHV$IULFDQ3ROLWLFVDW2[IRUG8QLYHUVLW\
KWWSVZZZIDFHERRNFRPQLFFKHHVHPDQ
Trang 77KHODVWFROXPQ,GLGUHYHDOHGWKDWRQO\DVPDOOQXPEHURIFRXQWLHV²1DURN0DFKDNRV0RPEDVD 1DLURELDQG1DNXUX²KDYHUHSRUWHGVLJQLILFDQWDPRXQWVRIORFDOO\JHQHUDWHGUHYHQXH
2QHRIWKHPDLQUHDVRQVIRUWKLVLVWKDWDQXPEHURIFRXQWLHVGRQRWHQMR\WKHNLQGRIHFRQRPLF DFWLYLW\WKDWLVHDV\WRSURILWDEO\WD[$QRWKHUUHDVRQLVWKDWFRXQWLHVKDYHQRW\HWZRQWKHWUXVWDQG UHVSHFWRIWKHLUYRWHUV²LQVRPHFDVHVEHFDXVHWKH\KDYHQRWHYHQWULHG
6RIDUWKHFRXQWLHVKDYHPDGHDQXPEHURIPLVWDNHVLQWKHLUDWWHPSWVWRWD[7RRPDQ\FRXQW\ JRYHUQPHQWVKDYHUDLVHGWD[HVEHIRUHSHUVXDGLQJSHRSOHWKHWD[HVDUHQHHGHG$OPRVWHYHU\GD\ WKHUHLVWDONRIDQRWKHUFRXQW\WKLQNLQJXSZD\VWRLPSRVHDQHZWD[RULQFUHDVLQJDQHVWDEOLVKHG RQHIURPFKLFNHQUHDULQJWRSODQWLQJWUHHVDQGEDFNDJDLQ
Trang 8.HQ\DQYRWHUVDUHXQGHUVWDQGDEO\VXVSLFLRXVDWWKHQHZUDQJHRIOHYLHV$IWHUDOOORFDOJRYHUQPHQWV LQ.HQ\DKDYHDKLVWRU\RIFRUUXSWLRQLQHIILFLHQF\DQGLQFRPSHWHQFH
:HKDYHWKHUHIRUHVHHQSURWHVWVIURPWKHSXEOLFDQGEXVLQHVVFRPPXQLW\DJDLQVW³GRXEOHWD[DWLRQ´ LQFDVHVZKHUHFRXQW\OHYHOWD[HVDSSHDUWRGXSOLFDWHQDWLRQDOOHYHORQHVVXFKDVWKHSODQVE\WKH 0RPEDVD&RXQW\$VVHPEO\WRLQWURGXFHDQHZFKDUJHRQSRUWFDUJR
&RXQWLHVRIWHQFRPSODLQWKDWWKHSXEOLFGRHVQRWDSSUHFLDWHKRZPDQ\VHUYLFHVWKH\DUHUHVSRQVLEOH IRUSURYLGLQJZLWKWKHLPSOLFDWLRQEHLQJWKDWLIWKHUHZHUHKLJKHUDZDUHQHVVSHRSOHZRXOGEHPRUH ZLOOLQJWRSD\WD[7KLVLVDIDLUSRLQWDQGRQHWKDWKDVEHHQGHPRQVWUDWHVE\UHVHDUFKRQWKH/DJRV 6WDWH*RYHUQPHQWZKLFKKDVPDQDJHGWRVLPXOWDQHRXVO\LQFUHDVHUHYHQXHVDQGSRSXODUVXSSRUW RYHUWKHODVWGHFDGH
+RZHYHURQHRIWKHUHDVRQVIRUWKHORZOHYHORISXEOLFDZDUHQHVVLVWKDWFRXQW\JRYHUQPHQWVKDYH QRWWROGWKHP7RGDWHUHPDUNDEO\OLWWOHSXEOLFUHODWLRQVZRUNKDVEHHQFDUULHGRXWE\WKHFRXQWLHVWR H[SODLQWRYRWHUVZKDWWKHLUMREVDUHDQGWRPDNHWKHFDVHIRUKLJKHUUHYHQXHFROOHFWLRQ
)RUH[DPSOHYHU\IHZFRXQWLHVKDYHWDUJHWHG³HDV\ZLQV´WKDWFRXOGEHDFKLHYHGUHODWLYHO\TXLFNO\WR GHPRQVWUDWHZKDWFRXQW\JRYHUQPHQWVFDQGRIRUWKHLUFRPPXQLWLHV6LPLODUO\DOPRVWQRFRXQWLHV KDYHGHYHORSHGDFOHDUDQGHIIHFWLYHEUDQGVRWKDWZDQDQFKLFDQVHHZKLFKVHUYLFHVDUHEHLQJ SURYLGHGDWWKHFRXQW\OHYHO,WLVWKHUHIRUHKDUGO\XQVXUSULVLQJWKDW.HQ\DQVDUHUHOXFWDQWWRSDUW ZLWKWKHLUKDUGHDUQHGFDVK
+$5$0%((
$OWKRXJKFRXQWLHVKDYHPDGHDVORZVWDUWDOOLVQRWORVW:HDUHRQO\RQH\HDULQWRWKHGHYROXWLRQ H[SHULPHQWDQGWKHUHLVDPSOHWLPHWRWXUQWKLQJVDURXQG²EXWWKLVFKDQJHKDVWREHJLQQRZ
7KHJRRGQHZVLVWKDW.HQ\DKDVDORQJKLVWRU\RIORFDOFRRSHUDWLRQWRSURYLGHGHYHORSPHQW,QGHHG 3UHVLGHQW-RPR.HQ\DWWD¶VWLPHLQRIILFHZDVHSLWRPLVHGE\KLVFDOOWRKDUDPEHH²IRU.HQ\DQVWR SXOOWRJHWKHULQRUGHUWREXLOGEULGJHVZHOOVDQGVFKRROV8QGHU.HQ\DWWD¶VJRYHUQPHQWDV\VWHP HPHUJHGLQZKLFKWKHVWDWHSOHGJHGWRSURYLGHDQXUVHLIDORFDOFRPPXQLW\ZRUNHGWRJHWKHUWREXLOG DKHDOWKFOLQLF
,QPDQ\ZD\VKDUDPEHHZDVSUREOHPDWLFEHFDXVHLWH[DFHUEDWHGLQHTXDOLWLHVEHWZHHQDUHDVZLWK PRUHVNLOOVDQGUHVRXUFHV²ZKLFKZHUHWKHUHIRUHDEOHWRIXQGDQGRUJDQLVHPRUHSURMHFWV²DQG WKRVHZLWKRXW%XWKDUDPEHHZDVDOVRUHPDUNDEOHEHFDXVHLWKDUQHVVHGORFDOWDOHQWVDQGVSLULWVWR PHHWGHYHORSPHQWFKDOOHQJHV
,QGHHGVRPDQ\VFKRROVDQGFOLQLFVZHUHEXLOWWKDWWKHJRYHUQPHQWZDVXQDEOHWRNHHSXS$OWKRXJK WKHLQVWLWXWLRQZDVPDQLSXODWHGDQGWRVRPHH[WHQWGHOHJLWLPLVHGXQGHU3UHVLGHQW'DQLHO0RLWKH VSLULWRIKDUDPEHHOLYHVRQ,WLVSDUWO\IRUWKLVUHDVRQWKDWGHYROXWLRQLVVRSRSXODU
:KDW.HQ\DQFRXQWLHVQHHGWRGRLVWRKDUQHVVWKHRULJLQDOVHQWLPHQWWKDWXQGHUSLQQHGKDUDPEHH 7REULQJSHRSOHIURPWKHFRPPXQLW\WRJHWKHUWRLGHQWLI\ORFDOSULRULWLHVDQGWRZRUNWRJHWKHUWR GHFLGHKRZWKH\VKRXOGEHILQDQFHG'RLQJWKLVZLOOUHTXLUHFRXQWLHVWRHQJDJHLQIDUPRUHSXEOLF SDUWLFLSDWLRQDQGFRPPXQLFDWLRQ²DWRSLFIRUDIXWXUHFROXPQ
3523(57<7$;(6
3URSHUW\WD[HVDUHRQHRIWKHPDLQVRXUFHVRIUHYHQXHDYDLODEOHWRWKHJRYHUQPHQW%XWLWLVHDV\WR VHHZK\QRWHYHU\RQHXQGHUVWDQGVWKLVSRLQW
7KHIRXUWKVFKHGXOHRIWKH&RQVWLWXWLRQSURYLGHVIRUWKHµJHQHUDOSULQFLSOHVRIODQGSODQQLQJ¶WREH RUJDQLVHGDWWKHQDWLRQDOOHYHO,QGHHGVHFWLRQH[SODLQVWKLVSRZHUXQHTXLYRFDOO\µ7KH6WDWHPD\ UHJXODWHWKHXVHRIDQ\ODQGRUDQ\LQWHUHVWLQRUULJKWRYHUDQ\ODQG¶
Trang 9$OLWWOHDFNQRZOHGJHGFDYHDWKRZHYHULVWKDWWKH&RQVWLWXWLRQ¶VIRXUWKVFKHGXOHDOVRDOORZVFRXQWLHV WRHQJDJHLQµODQGVXUYH\DQGPDSSLQJ¶DQGVHFWLRQ D H[SOLFLWO\JLYHVGHYROYHG
JRYHUQPHQWVWKHSRZHUWRLPSRVHSURSHUW\WD[HV
:KDWWKH&RQVWLWXWLRQSXWLQSODFHZDVWKHUHIRUHDVXEWOHGLIIHUHQFHEHWZHHQSROLWLFDOODQG
PDQDJHPHQWSDUWRIWKHQDWLRQDOGHEDWH DQGHFRQRPLFTXHVWLRQVRIWKHVHWWLQJDQGFROOHFWLQJRI SURSHUW\WD[HVDOHJDOULJKWRIFRXQW\JRYHUQPHQWV
:K\KDYHFRXQWLHVQRWPDGHEHWWHUXVHRIWKLVSURYLVLRQWRUDLVHUHYHQXH")LUVWLWLVLPSRUWDQWWR UHFRJQLVHWKDWZHODFNJRRGGDWDRQWKLVTXHVWLRQ²WKH2IILFHRIWKH&RQWUROOHURI%XGJHW¶VUHSRUW IRUWKHILUVWIXOO\HDURIGHYROYHGJRYHUQPHQWV¶ SURYLGHGQRLQIRUPDWLRQRQKRZPXFK SURSHUW\WD[ZDVFROOHFWHGE\FRXQWLHV
7KLVPHDQVZHDUHQRWLQDSRVLWLRQWRLGHQWLI\EDGFDVHVWKDWFDQEHXVHGWRXQGHUVWDQGZKHUH WKLQJVDUHJRLQJZURQJRUJRRGFDVHVWKDWFDQEHXVHGWRVHHKRZWKH\FDQEHSXWULJKW
2QHWKLQJZHGRNQRZIURPWKH2IILFHRIWKH&RQWUROOHURI%XGJHW¶VUHSRUWRI)HEUXDU\LVWKDW
%DULQJR.LVXPXDQG1DQGLDUHWKUHHFRXQWLHVWKDWKDYHFROOHFWHGYHU\OLWWOHIURPUHQWDQGSURSHUW\ UDWHV
3HUKDSVWKHPRVWLPSRUWDQWUHDVRQIRUWKLVLVWKHODFNRIUHFHQWSURSHUW\YDOXDWLRQVVRWKDWODQGLV UHFRUGHGDVEHLQJZRUWKDWLQ\SURSRUWLRQRILWVWUXHYDOXH,QGHHGVXFFHVVIXOSURSHUW\WD[FROOHFWLRQ LVDOODERXWFOHDUDQGWUDQVSDUHQWYDOXDWLRQV²WKLVLVWKHRQO\ZD\WKDWFRXQWLHVZLOOJHWWKHUHYHQXH WKH\DUHGXHZLWKRXWORVLQJSXEOLFVXSSRUW
)RUH[DPSOHSURSHUW\WD[LQ1DLURELLVSDLGRQO\DFFRUGLQJWRWKHODQGKHOGDQGWKHODVWYDOXDWLRQ RIWKHODQGZDVFRQGXFWHGLQ$VDUHVXOWWKH1DLUREL&RXQW\*RYHUQPHQWKDVKDGWROHY\D SHUFHQWWD[UDWHDVDZD\RIJHQHUDWLQJUHYHQXHIURPODQGWKDWLVLQVRPHFDVHVYDOXHGDWOHVVWKDQ
SHUFHQWRILWVZRUWK
,QWXUQWKLVDSSHDUVWREHLOOHJLWLPDWHWRYRWHUV²EXWWKHFRXQW\ZRXOGEHDEOHWRFKDUJHDPXFK ORZHUWD[LILWZDVDEOHWRFRQGXFWDQHIIHFWLYHUHYDOXDWLRQ$VLWVWDQGVWKHFRXQW\ZLOOKDYHWRUDLVH WKHWD[UDWHHYHU\\HDUWRFRPSHQVDWHIRUWKHIDFWWKDWHYHULQFUHDVLQJSURSHUW\YDOXHVDUHQRW UHIOHFWHGLQRIILFLDOFDOFXODWLRQV
7KHSUREOHPRIHYHUORZHULQJSURSHUW\WD[UHYHQXHZDVQRWHGDVHDUO\DVLQDUHSRUWSUHSDUHG E\5R\.HOO\DW'XNH8QLYHUVLW\7DNLQJLQWRDFFRXQWLQIODWLRQDU\FKDQJHV.HQ\DKDVVHHQSURSHUW\ UDWHUHYHQXHVGHFOLQHVLQFH%HWZHHQWKHWHQILQDQFLDO\HDUVVSDQQLQJWRORFDO DXWKRULWLHV¶SURSHUW\WD[HVZHQWIURPSHUFHQWRI*'3WRSHUFHQW.HOO\¶VUHSRUWFRQFOXGHV WKDWSURSHUW\UDWHVLQ.HQ\DDUHµ GHFOLQLQJLQUHDOWHUPVRYHUWLPH