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Development Channel

Issues and innovations in global economic development

This Week in Markets and Democracy: Walmart Bribery Case, Myanmar Sanctions, Kleptocracy Archive

by Shannon K. O'Neil Friday, May 20, 2016
Myanmar's National League for Democracy leader Aung San Suu Kyi leaves after she attended as an observer for opening of the new upper house of parliament in Naypyitaw February 3, 2016. After decades of struggle, hundreds of lawmakers from Aung San Suu Kyi's camp will form Myanmar's ruling party on Monday, with enough seats in parliament to choose the first democratically elected government since the military took power in 1962 (Reuters/Soe Zeya Tun). Myanmar's National League for Democracy leader Aung San Suu Kyi leaves after she attended as an observer for opening of the new upper house of parliament in Naypyitaw February 3, 2016. After decades of struggle, hundreds of lawmakers from Aung San Suu Kyi's camp will form Myanmar's ruling party on Monday, with enough seats in parliament to choose the first democratically elected government since the military took power in 1962 (Reuters/Soe Zeya Tun).

Setback in Walmart Mexico Bribery Case
Four years after a New York Times investigation alleged that Walmart’s board knew about and covered up bribes paid in Mexico, the chances of a civil or criminal conviction are fading. Last week shareholders—including the California teachers’ and New York City pension funds—lost their case against Walmart’s board, with a Delaware judge ruling their complaint was too similar to another dismissed last year. The Department of Justice (DOJ) and Securities and Exchange Commission (SEC) probe seems to have stalled as well, uncovering less than expected as the five-year statute of limitations for Foreign Corrupt Practices Act (FCPA) charges runs out this year. Many expect Walmart to just pay a fine, in addition to over $700 million already spent on compliance and legal fees.

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This Week in Markets and Democracy: UK Anticorruption Summit

by Shannon K. O'Neil Friday, May 13, 2016
British Prime Minister Cameron is joined by Jim Yong Kim, President of the World Bank Group, (left) Sarah Chayes, a senior associate in the Democracy and Rule of Law Program, (second left) US Secretary of State John Kerry, (third from left) and Nigerian President Muhammadu Buhari, (right), as he opens the international anti-corruption summit on May 12, 2016 in London, England. Leaders from many of the worlds nations are gathering in London for the summit, which is aimed at stepping up action to tackle the problem of corruption (Reuters/Dan Kitwood/Pool). British Prime Minister Cameron is joined by Jim Yong Kim, President of the World Bank Group, (left) Sarah Chayes, a senior associate in the Democracy and Rule of Law Program, (second left) US Secretary of State John Kerry, (third from left) and Nigerian President Muhammadu Buhari, (right), as he opens the international anti-corruption summit on May 12, 2016 in London, England. Leaders from many of the worlds nations are gathering in London for the summit, which is aimed at stepping up action to tackle the problem of corruption (Reuters/Dan Kitwood/Pool).

British Prime Minister David Cameron gathered government officials, civil society advocates, and business leaders in London for a one-day summit on corruption, a global “cancer” hindering economic development and growth. Forty countries signed a Global Declaration Against Corruption, promising to prevent, uncover, and punish corruption “wherever it exists.” Many countries followed up the lofty rhetoric with concrete commitments: twenty-one pledged stronger legislation for returning stolen assets, fourteen will open public contracts to scrutiny for the first time, and the UK and five other countries will jointly launch a new anticorruption center to help investigate and prosecute cross-border cases.

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This Week in Markets and Democracy: Protectionism Rises, Mexico Anticorruption Bill Delayed, How Corruption Affects Business

by Shannon K. O'Neil Friday, May 6, 2016
Protesters demonstrate against Transatlantic Trade and Investment Partnership (TTIP) free trade agreement ahead of U.S. President Barack Obama's visit in Hannover, Germany April 23, 2016 (Reuters/Kai Pfaffenbach). Protesters demonstrate against Transatlantic Trade and Investment Partnership (TTIP) free trade agreement ahead of U.S. President Barack Obama's visit in Hannover, Germany April 23, 2016 (Reuters/Kai Pfaffenbach).

Protectionism by the Numbers
It is not just anti-trade rhetoric spreading on both sides of the Atlantic; it is also policies. The Global Trade Alert, an online index that monitors trade policy, reports a rapid rise in protectionist measures worldwide since 2008. The database documents over 5,000 new barriers to trade, including import quotas, stricter rules for migrant workers, and local content requirements. The United States leads this turn toward protectionism, creating more than eighty new rules in the last year alone. These measures are one of the main causes slowing global trade.

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This Week in Markets and Democracy: Rana Plaza Anniversary, Press Freedom Declines, Haiti Election Troubles

by Shannon K. O'Neil Friday, April 29, 2016
A relative holds up a picture of a garment worker in front of the rubble of the collapsed Rana Plaza building (Reuters/Andrew Biraj). A relative holds up a picture of a garment worker in front of the rubble of the collapsed Rana Plaza building (Reuters/Andrew Biraj).

Labor Standards Three Years After Rana Plaza
Three years after Bangladesh’s Rana Plaza garment factory collapse killed or injured over 3,000 people, labor rights remain tenuous. In the wake of the disaster apparel brands, suppliers, and the Bangladeshi government created the Alliance for Bangladesh Worker Safety, a partnership to improve conditions by setting standards and increasing inspections. The Alliance has worked with factories to build emergency exits, install fire hydrants, and rewire electrical systems. It has also blacklisted the worst offenders. Yet it only encompasses those operating under formal contracts. Over half of the nation’s 7,000 factories work in the informal economy. Here, the Bangladeshi government doesn’t enforce Alliance standards, leaving these workers vulnerable.

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This Week in Markets and Democracy: Honduras’ Anticorruption Fight, Freedom House Report, Conflict Minerals Setback

by Shannon K. O'Neil Friday, April 22, 2016
A demonstrator holds a sign that reads "Out JOH", in a reference to Honduras' President Juan Orlando Hernandez, during a march to demand the resignation of Hernandez in Tegucigalpa, August 21, 2015. Thousands of protesters have been continuing demonstrations in Tegucigalpa, calling for the resignation of Hernandez over a $200 million corruption scandal at the Honduran Institute of Social Security (Reuters/Jorge Cabrera). A demonstrator holds a sign that reads "Out JOH", in a reference to Honduras' President Juan Orlando Hernandez, during a march to demand the resignation of Hernandez in Tegucigalpa, August 21, 2015. Thousands of protesters have been continuing demonstrations in Tegucigalpa, calling for the resignation of Hernandez over a $200 million corruption scandal at the Honduran Institute of Social Security (Reuters/Jorge Cabrera).

Honduras’ New Anticorruption Fighter Takes on the President
Last summer allegations that Honduran officials stole more than $200 million dollars from the social security system led to widespread public protests and calls for President Juan Orlando Hernández’s resignation. The scandal spurred the creation of the Mission Against Corruption and Impunity in Honduras (MACCIH), an anticorruption body backed by the Organization of American States (OAS) and modeled after the International Commission Against Impunity in Guatemala (CICIG). Now active, MACCIH officials say they will investigate the case. Given MACCIH’s more limited prosecutorial autonomy and much smaller budget, many wonder if it can match the impressive results of its Guatemalan counterpart, which—working with the attorney general—brought down former president Otto Pérez Molina.

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This Week in Markets and Democracy: Peru’s Elections, Corruption Arrests, and Panama Papers Response

by Shannon K. O'Neil Friday, April 15, 2016
People walk past campaign electoral signs of Peru's presidential candidate Keiko Fujimori in Cuzco, Peru, April 11, 2016 (Reuters/Janine Costa). People walk past campaign electoral signs of Peru's presidential candidate Keiko Fujimori in Cuzco, Peru, April 11, 2016 (Reuters/Janine Costa).

Peru’s Presidential Candidates Head to Second Round
On June 5, Keiko Fujimori, the daughter of former president Alberto Fujimori, will face former finance minister Pedro Pablo Kuczynski in Peru’s presidential runoff election. Questionable decisions by Peru’s electoral board in the first round—disqualifying two competitive candidates and dismissing charges of vote-buying against Fujimori and Kuczynski—boosted Fujimori and clouded the vote’s legitimacy. Now the question will be the anti-Fujimori vote and whether Kuczynski (not a natural campaigner) can consolidate her opposition—much as current president Ollanta Humala did when he beat her in 2011’s second round. Although Fujimori is popular among the rural poor, many remember the corruption and human rights abuses of her father’s presidency, and fear that she could follow in his footsteps.

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Five Questions on Sustainable Investing With Morgan Stanley’s Audrey Choi

by Guest Blogger for Shannon K. O'Neil Tuesday, April 12, 2016
A man fills a glass with water from a spring in Chiffa in Medea Governorate, Algeria (Reuters/Ramzi Boudina). A man fills a glass with water from a spring in Chiffa in Medea Governorate, Algeria (Reuters/Ramzi Boudina).

This post features a conversation with Audrey Choi, chief executive officer of Morgan Stanley’s Institute for Sustainable Investing and managing director of its Global Sustainable Finance Group. Choi talks about the evolving $20 trillion sector, including important U.S. policy changes and her thoughts on where sustainable investing is headed. Read more »

This Week in Markets and Democracy: Panama Papers, Curbing Tax Evasion, U.S. Cuts Tanzania Aid

by Shannon K. O'Neil Friday, April 8, 2016
People demonstrate against Iceland's Prime Minister Sigmundur Gunnlaugsson in Reykjavik, Iceland on April 4, 2016 after a leak of documents by so-called Panama Papers stoked anger over his wife owning a tax haven-based company with large claims on the country's collapsed banks (Reuters/Stigtryggur Johannsson). People demonstrate against Iceland's Prime Minister Sigmundur Gunnlaugsson in Reykjavik, Iceland on April 4, 2016 after a leak of documents by so-called Panama Papers stoked anger over his wife owning a tax haven-based company with large claims on the country's collapsed banks (Reuters/Stigtryggur Johannsson).

Panama Papers Expose Weak Regulations
The “Panama Papers” are an unprecedented leak of 11.5 million files revealing a complex global network of hidden wealth. For four decades, Panamanian law firm Mossack Fonseca helped to set up over 200,000 shell companiesa favored tool for laundering money, stashing ill-gotten resources, and evading taxes—for tens of thousands of clients in over fifty countries, with current and former heads of state among the 143 politicians and cronies named. So far the revelations have forced Iceland’s prime minister and the president of Transparency International’s Chile branch to resign, and upped support for a Brexit given British Prime Minister David Cameron’s involvement. The Panama Papers further expose weaknesses in global financial regulation. More than half of the leaked shell companies are based in UK  territories100,000 in the British Virgin Islands alone—where Cameron has tried to end such anonymity by legally mandating a public registry of companies’ owners. European banks HSBC, Credit Suisse, and UBS are among the ten institutions that worked most frequently with the Panamanian firm to create offshore accounts for clients. Since the leak, countries including the United States and Germany have proposed new legislation to increase transparency around offshore companies.

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Five Things Washington Should Do to Help Latin America Curb Corruption

by Guest Blogger for Matthew Taylor Wednesday, April 6, 2016
Paraguayan prosecutors Hernan Galeano (C), Federico Espinoza (center, R) and Chief Prosecutor Roberto Zacarias hold a news conference in Asuncion, January 8, 2016. Paraguayan state prosecutors on Thursday raided the headquarters of South American soccer confederation CONMEBOL after a request for cooperation from U.S. justice officials probing corruption inside world soccer, the prosecution office said (Jorge Adorno/Reuters). Paraguayan prosecutors Hernan Galeano (C), Federico Espinoza (center, R) and Chief Prosecutor Roberto Zacarias hold a news conference in Asuncion, January 8, 2016. Paraguayan state prosecutors on Thursday raided the headquarters of South American soccer confederation CONMEBOL after a request for cooperation from U.S. justice officials probing corruption inside world soccer, the prosecution office said (Jorge Adorno/Reuters).

This is a guest blog post by Dr. Richard Messick, an anticorruption specialist. It is based on a CFR roundtable discussion on March 24 hosted by Matthew M. Taylor, adjunct senior fellow for Latin America Studies.

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CSMD Spring Break Reading List

by Shannon K. O'Neil Friday, March 25, 2016
People walk on the rock at the Trou aux Biches beach on the Indian Ocean island Mauritius (Reuters/Jacky Naegelen). People walk on the rock at the Trou aux Biches beach on the Indian Ocean island Mauritius (Reuters/Jacky Naegelen).

As Civil Society, Markets, and Democracy (CSMD) heads into spring break, here is what we will be reading.

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