CFR Presents

Development Channel

Issues and innovations in global economic development

Who Governs Global Value Chains?

by Guest Blogger for Shannon K. O'Neil Tuesday, August 16, 2016
Containers and cars are loaded on freight trains at the railroad shunting yard in Maschen near Hamburg September 23, 2012 (REUTERS/Fabian Bimmer). Containers and cars are loaded on freight trains at the railroad shunting yard in Maschen near Hamburg September 23, 2012 (REUTERS/Fabian Bimmer).

Global trade and the supply chains that support it are undergoing a period of profound change. Supply chains face threats including a resurgence of protectionism, climate change, decaying infrastructure, and human rights abuses. The Development Channel’s series on global supply chains will highlight experts’ analysis on emerging trends and challenges. This post is from Dr. Sherry Stephenson, senior fellow at the International Centre for Trade and Sustainable Development (ICTSD). 

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A Game of Inches: The Uncertain Fight Against Corruption in Latin America

by Matthew Taylor Wednesday, August 10, 2016
A boy holds a sign which reads, "No more corruption" during a demonstration demanding the resignation of Guatemalan President Otto Perez Molina, in downtown Guatemala City, May 30, 2015 (Reuters/Jorge Dan Lopez). A boy holds a sign which reads, "No more corruption" during a demonstration demanding the resignation of Guatemalan President Otto Perez Molina, in downtown Guatemala City, May 30, 2015 (Reuters/Jorge Dan Lopez).

Harvard’s inimitable Matthew Stephenson this week published a thought-provoking blog post comparing anticorruption efforts in Asia and Latin America. Crudely summarizing Stephenson’s argument, a few years ago many looked to Asia as the gold standard in anticorruption efforts, in part because of the success of independent and effective anticorruption agencies (ACAs) in the region. But recent news of political meddling with Hong Kong’s ACA, brazen kleptocracy in Malaysia’s state development fund, and efforts to water down reform in Indonesia all suggest that the pendulum is swinging in a less positive direction. By contrast, Stephenson is optimistic about the important gains made in recent years in Latin America, including by Guatemala’s International Commission Against Impunity (CICIG), Brazil’s Car Wash investigation, elections in Peru and Argentina that highlighted voter frustration with corruption, and Mexico’s “3 out of 3” reforms.

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Amid Slowing Trade, What’s Next for Global Supply Chains?

by Guest Blogger for Shannon K. O'Neil Tuesday, August 2, 2016
Employees sort boxes and parcels at the logistic centre of a express delivery company, after the Singles Day online shopping festival, in Wuhan, Hubei province, China, November 12, 2015 (Reuters/Stringer). Employees sort boxes and parcels at the logistic centre of a express delivery company, after the Singles Day online shopping festival, in Wuhan, Hubei province, China, November 12, 2015 (Reuters/Stringer).

Global trade and the supply chains that support it are undergoing a period of profound change. Supply chains face threats including a resurgence of protectionism, climate change, decaying infrastructure, and human rights abuses. The Development Channel’s series on global supply chains will highlight experts’ analysis on emerging trends and challenges. This post is from Wolfgang Lehmacher, head of supply chains and transport industry at the World Economic Forum (WEF) USA.

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This Week in Markets and Democracy: New Panama Papers, 1MDB Scandal Developments, Turkey Targets Press

by Shannon K. O'Neil Friday, July 29, 2016
Turkish President Tayyip Erdogan leaves after a news conference following the National Security Council and cabinet meetings at the Presidential Palace in Ankara, Turkey, July 20, 2016 (Reuters/Umit Bektas). Turkish President Tayyip Erdogan leaves after a news conference following the National Security Council and cabinet meetings at the Presidential Palace in Ankara, Turkey, July 20, 2016 (Reuters/Umit Bektas).

New Panama Papers Expose Africa’s Offshore Dealings
The International Consortium of Investigative Journalists (ICIJ) released a second round of Panama Papers. The documents reveal how private firms, business executives, and corrupt officials in fifty-two of Africa’s fifty-four nations hired Panamanian law firm Mossack Fonseca to set up shell companies—many to avoid taxes and hide bribes. Some 1,400 anonymous companies had links to African oil, gas, and mining businesses, facilitating the more than $50 billion in illicit financial outflows from the continent each year. The new releases should give authorities evidence to go after assets at home and abroad—where billions in corruption proceeds are stashed.

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This Week in Markets and Democracy: Mexico’s Anticorruption Reforms, South Africa’s Anticorruption Setbacks, Venezuela’s Slow-Motion Coup

by Shannon K. O'Neil Friday, July 22, 2016
Venezuela's President Nicolas Maduro (R) speaks, while Venezuela's Defense Minister Vladimir Padrino Lopez stands next to him, during a ceremony commemorating the 200th death anniversary of South American independence hero Francisco de Miranda in Caracas, Venezuela July 14, 2016 (Reuters/Carlos Garcia Rawlins). Venezuela's President Nicolas Maduro (R) speaks, while Venezuela's Defense Minister Vladimir Padrino Lopez stands next to him, during a ceremony commemorating the 200th death anniversary of South American independence hero Francisco de Miranda in Caracas, Venezuela July 14, 2016 (Reuters/Carlos Garcia Rawlins).

Mexico’s New Anticorruption Tools
President Enrique Peña Nieto signed into law long-awaited rules to step up Mexico’s fight against corruption. He had to veto an earlier version that would have forced private firms that receive government money to reveal their income and assets. The new measures mandate that all public servants disclose their assets, income, and tax returns. They also set up an independent prosecutor’s office and up the punishments for bribery, embezzlement, and influence peddling. While some civil society groups had hoped for more, the new anticorruption system provides new and stronger tools for those eager to take on bad behavior.

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The Future of Global Supply Chains: Workshop Report

by Shannon K. O'Neil Thursday, July 21, 2016
Shipping containers sit at the ports of Los Angeles and Long Beach, California in this aerial photo taken February 6, 2015 (Reuters/Bob Riha, Jr.) Shipping containers sit at the ports of Los Angeles and Long Beach, California in this aerial photo taken February 6, 2015 (Reuters/Bob Riha, Jr.)

Commerce has fundamentally changed over the past thirty years. Intermediate goods—or parts of products traded through global supply chains—now account for 70 percent of all trade. The Civil Society, Markets, and Democracy program hosted a workshop in May to explore the evolution of global supply chains, the risks they face, and how U.S. policies help or hinder the country’s competitiveness. The workshop included current and former government officials, supply chain experts, corporate representatives, and finance specialists.

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This Week in Markets and Democracy: China’s Private Sector Corruption, Zimbabwe’s Protests, New Corruption Brief

by Shannon K. O'Neil Friday, July 15, 2016
A man checks a message on his mobile phone, in Harare, Zimbabwe, July 7, 2016 (Reuters/Philimon Bulawayo). A man checks a message on his mobile phone, in Harare, Zimbabwe, July 7, 2016 (Reuters/Philimon Bulawayo).

Chinese Companies lag on Transparency
Chinese companies filled the bottom twenty-five spots in a recent Transparency International report ranking one-hundred emerging market multinationals on anticorruption efforts. Three received zeroes (on a zero-to-ten scale) for failing to list subsidiaries, release financials on foreign operations, or set up antibribery programs. The Chinese government is not pressing for change, instead killing a business-led anticorruption task force within the G20 framework. As a result, foreign companies operating in China are hard-pressed to avoid bribery—a challenge reflected in Foreign Corrupt Practices Act (FCPA) cases. So far this year, over half of all corporate FCPA actions involved bribes paid to Chinese officials, and since 2008, the United States found more cases of misconduct in China than in all other countries combined.

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This Week in Markets and Democracy: Foreign Aid Bill Passes, New TIP Report Released, UK Bribery Act Turns Five

by Shannon K. O'Neil Friday, July 8, 2016
U.S. Secretary of State John Kerry holds a copy of the 2016 Trafficking in Persons (TIP) report during the TIP Heroes Ceremony at the State Department in Washington, June 30, 2016 (Reuters/Kevin Lamarque). U.S. Secretary of State John Kerry holds a copy of the 2016 Trafficking in Persons (TIP) report during the TIP Heroes Ceremony at the State Department in Washington, June 30, 2016 (Reuters/Kevin Lamarque).

Now You Can Find out What Happens to U.S. Aid
In a bipartisan vote, Congress passed legislation to require U.S. agencies—the U.S. Agency for International Development and U.S. State Department among them—to measure the success (or failure) of billions spent on development and economic assistance programs—and share the findings on foreignassistance.gov. Once signed into law the Foreign Aid Transparency and Accountability Act will also make public program budgets by country, showing where and how U.S. money is spent. Notably exempt is security assistance, leaving details about how the United States funds, trains, and equips foreign militaries still opaque.

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This Week in Markets and Democracy: U.S. Corruption Ruling, China’s Antigraft Drive, Panama Canal Expands

by Shannon K. O'Neil Friday, July 1, 2016
Former Virginia Governor Bob McDonnell is trailed by reporters as he departs after his appeal of his 2014 corruption conviction was heard at the U.S. Supreme Court in Washington, U.S. April 27, 2016. The U.S. Supreme Court on June 27, 2016 threw out McDonnell's corruption convictions in a ruling that could hem in federal prosecutors as they go after bribery charges against other politicians (Reuters/Jonathan Ernst). Former Virginia Governor Bob McDonnell is trailed by reporters as he departs after his appeal of his 2014 corruption conviction was heard at the U.S. Supreme Court in Washington, U.S. April 27, 2016. The U.S. Supreme Court on June 27, 2016 threw out McDonnell's corruption convictions in a ruling that could hem in federal prosecutors as they go after bribery charges against other politicians (Reuters/Jonathan Ernst).

Supreme Court Rules on Corruption
The U.S. Supreme Court overturned former Virginia Governor Bob McDonnell’s bribery conviction for accepting over $175,000 worth of gifts and loans—including a Rolex watch, designer clothes, and luxury getaways—allegedly in return for favorable business treatment. The court said this did not count as an “official act” of bribery under U.S. law, raising the bar for federal prosecutions of public sector corruption. States can help fill the gap, as Virginia did in the wake of the scandal, setting a straightforward $100 annual cap on gifts from lobbyists and other individuals or businesses angling for government deals or support. Other states ban or set strict gift limits. In Florida, lobbyists (or those who hire them) cannot give more than a flower arrangement; in California, officials cannot accept anything valued over $250. Several states prohibit gifts with “intent to influence”—a hard case to prove. Check out your jurisdiction here.

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Five Questions with Geraldine Knatz: The Panama Canal Expansion and the Evolution of Global Trade

by Guest Blogger for Shannon K. O'Neil Monday, June 27, 2016
People wave at a Chinese COSCO container vessel, as it arrives to Cocoli locks after crossing the Panama Canal to the Pacific side, during its first ceremonial transit of the new Panama Canal expansion project in Cocoli on the outskirts of Panama City, Panama June 26, 2016 (Reuters/Carlos Jasso). People wave at a Chinese COSCO container vessel, as it arrives to Cocoli locks after crossing the Panama Canal to the Pacific side, during its first ceremonial transit of the new Panama Canal expansion project in Cocoli on the outskirts of Panama City, Panama June 26, 2016 (Reuters/Carlos Jasso).

As the first ship goes through the expanded Panama Canal, the Development Channel sat down with Geraldine Knatz, former director of the Port of Los Angeles and now a professor of policy and engineering at the University of Southern California’s Price School of Public Policy. Dr. Knatz talked about changes in the shipping industry, trends affecting U.S. ports, and what the canal expansion will mean for trade globally.

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