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This Week in Markets and Democracy: Violent Kleptocracies, Ethiopia’s Unrest

by Shannon K. O'Neil
Demonstrators chant slogans while flashing the Oromo protest gesture during Irreecha, the thanksgiving festival of the Oromo people, in Bishoftu town, Oromia region, Ethiopia, October 2, 2016 (Reuters/Tiksa Negeri). Demonstrators chant slogans while flashing the Oromo protest gesture during Irreecha, the thanksgiving festival of the Oromo people, in Bishoftu town, Oromia region, Ethiopia, October 2, 2016 (Reuters/Tiksa Negeri).

Fighting the Worst Kleptocracies
Worse than kleptocracies are violent kleptocracies, as defined in a new report by advocacy group The Enough Project. In these, leaders run the state as a predatory criminal enterprise, looting the treasury and using virtually all means of government power—the judicial system, military, and security forces—to intimidate, jail, and eliminate any opposition. With near unquestioned power, this all happens with impunity. South Sudan is a classic example—its leaders making millions off of a brutal civil war they fueled. Existing anticorruption tools and agreements—the OECD Anti-Bribery Convention and the UN Convention Against Corruption among them—do little to change this deadly status quo, according the report. Instead, it says the United States should crack down on these corrupt leaders—taking away their visas, imposing sanctions, seizing ill-gotten assets that come through the U.S. banking system, and using evidence from Foreign Corrupt Practices Act investigations to help go after not only the companies that pay bribes, but the officials who take them.

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This Week in Markets and Democracy: FIFA Investigations, Corruption in Romania and the Maldives, New South Sudan Report

by Shannon K. O'Neil
British comedian known as Lee Nelson (unseen) throws banknotes at FIFA President Sepp Blatter as he arrives for a news conference after the Extraordinary FIFA Executive Committee Meeting at the FIFA headquarters in Zurich, Switzerland July 20, 2015. World football's troubled governing body FIFA will vote for a new president, to replace Sepp Blatter, at a special congress to be held on February 26 in Zurich, the organisation said on Monday (Reuters/Arnd Wiegmann). British comedian known as Lee Nelson (unseen) throws banknotes at FIFA President Sepp Blatter as he arrives for a news conference after the Extraordinary FIFA Executive Committee Meeting at the FIFA headquarters in Zurich, Switzerland July 20, 2015. World football's troubled governing body FIFA will vote for a new president, to replace Sepp Blatter, at a special congress to be held on February 26 in Zurich, the organisation said on Monday (Reuters/Arnd Wiegmann).

FIFA Investigates Its Own Corruption
A year after the United States and Switzerland went after top FIFA officials on fraud, money laundering, and racketeering charges tied to a $150 million corruption scheme, soccer’s international governing body is taking actions itself. The federation fined former vice president Jeffrey Webb $1 million for accepting bribes and banned him for life from the sport. It also opened an investigation on former President Sepp Blatter and two top associates for bribery, corruption, and conflicts of interest, including adding several illegal provisions to their contracts—boosting their combined salaries to over $80 million, and guaranteeing them eight years of pay even if fired for just cause. FIFA’s new dynamism may begin to restore its tarnished reputation, and the information it uncovers could help U.S. and Swiss prosecutors with their own ongoing criminal cases.

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This Week in Markets and Democracy: Labor Rights in Supply Chains, Bank Secrecy Act, and the Kimberley Process

by Shannon K. O'Neil
A man displays a rough diamond, from the Boda region, for sale in Bangui May 1, 2014. Despite a 2013 ban on diamond exports by The Kimberley Process, a global watchdog set up to stop the trade in "blood diamonds", rough diamonds are still commonly offered for sale in Central African Republic (Reuters/Emmanuel Braun). A man displays a rough diamond, from the Boda region, for sale in Bangui May 1, 2014. Despite a 2013 ban on diamond exports by The Kimberley Process, a global watchdog set up to stop the trade in "blood diamonds", rough diamonds are still commonly offered for sale in Central African Republic (Reuters/Emmanuel Braun).

Supply Chains Take Center Stage at International Labor Conference
Of the $26 trillion in commerce flowing around the world, over 70 percent are intermediate goods. This reflects the rise of global supply chains. The International Labor Organization (ILO) conference put this dominant means of production on the agenda for the first time this year, addressing working conditions for those within these chains. Government and business leaders from the ILO’s 187 member countries spent the past two weeks debating whether to set official standards to push companies like Walmart, Gap, and Nestlé to address labor violations along their transnational production chains. Though any new rules would be non-binding, historically ILO standards have prompted legislation.

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Nigeria’s 2016 Budget Continues Use of Secretive ‘Security Votes’

by Guest Blogger for Shannon K. O'Neil

In a post originally published on African Arguments, CFR International Affairs Fellow Matthew Page explains that despite President Muhammadu Buhari’s anticorruption progress, the government’s new budget includes allocations for opaque funds that often go missing.

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This Week in Markets and Democracy: Corruption in Iran, Africa, and Mexico

by Shannon K. O'Neil
Humberto Moreira, a former ally of Mexican President Enrique Pena Nieto, and his lawyer Ulrich Richter (L) leave the Soto del Real penitentiary outside Madrid, Spain, January 22, 2016 (Reuters/Susana Vera). Humberto Moreira, a former ally of Mexican President Enrique Pena Nieto, and his lawyer Ulrich Richter (L) leave the Soto del Real penitentiary outside Madrid, Spain, January 22, 2016 (Reuters/Susana Vera).

Iran’s Sanction Are Gone, but Not Its Corruption

Corruption presents a huge hurdle for Iran. It ranks 136 out of 175 countries in Transparency International’s Corruption Perceptions Index, and 118 of 189 in the World Bank’s Doing Business report. Despite earning $650 billion in oil profits over the last eight years, billions went missing, and little found its way into public goods such as infrastructure. Still, as international sanctions lift, European and Asian companies including Daimler, Airbus, Total, Eni, and Statoil have or are considering ventures. The UK government even published a guide on doing business in Iran, noting the prevalence of customs that violate its Bribery Act.

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This Week in Markets and Democracy: The Americas’ Refugee Crisis, Impunity in Journalist Attacks, and More

by Shannon K. O'Neil
A Salvadoran immigrant carries her son while standing in vegetation to hide from organized crime bands in Huehuetoca, near Mexico City, June 1, 2015. An increasing number of Central Americans are sneaking across Mexico's border en route to the United States (Reuters/Edgard Garrido). A Salvadoran immigrant carries her son while standing in vegetation to hide from organized crime bands in Huehuetoca, near Mexico City, June 1, 2015. An increasing number of Central Americans are sneaking across Mexico's border en route to the United States (Reuters/Edgard Garrido).
CFR’s Civil Society, Markets, and Democracy (CSMD) Program highlights noteworthy events and articles each Friday in “This Week in Markets and Democracy.” 

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This Week in Markets and Democracy: U.S. Fights Corruption, Preventing Mass Atrocities, and More

by Shannon K. O'Neil
Ban Ki-moon, U.N. Secretary-General addresses a plenary meeting of the United Nations Sustainable Development Summit 2015 at United Nations headquarters in Manhattan, New York, September 25, 2015. More than 150 world leaders are expected to attend the U.N. Sustainable Development Summit from September 25-27 at the United Nations in New York to formally adopt an ambitious new sustainable development agenda a press statement by the U.N. stated. (Soe Zeya Tun/Reuters). Ban Ki-moon, U.N. Secretary-General addresses a plenary meeting of the United Nations Sustainable Development Summit 2015 at United Nations headquarters in Manhattan, New York, September 25, 2015. More than 150 world leaders are expected to attend the U.N. Sustainable Development Summit from September 25-27 at the United Nations in New York to formally adopt an ambitious new sustainable development agenda a press statement by the U.N. stated. (Soe Zeya Tun/Reuters).

CFR’s Civil Society, Markets, and Democracy (CSMD) Program highlights noteworthy events and articles each Friday in “This Week in Markets and Democracy.” 

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Countering Violent Extremism: Falling Between the Cracks of Development and Security

by Guest Blogger for Shannon K. O'Neil
Police stand guard during a mass burial of victims of religious attacks in the Dogo Nahawa village, about 15 km (9 miles) to the capital city of Jos in central Nigeria, March 8, 2010. Soldiers patrolled the central Nigerian city of Jos on Monday and aid workers tried to assess the death toll after attacks on outlying communities in which several hundred people were feared to have been killed (Reuters/ Akintunde Akinleye) Police stand guard during a mass burial of victims of religious attacks in the Dogo Nahawa village, about 15 km (9 miles) to the capital city of Jos in central Nigeria, March 8, 2010. Soldiers patrolled the central Nigerian city of Jos on Monday and aid workers tried to assess the death toll after attacks on outlying communities in which several hundred people were feared to have been killed (Reuters/ Akintunde Akinleye).

Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is from Dr. Khalid Koser, executive director of the Global Community Engagement and Resilience Fund (GCERF) and Amy E. Cunningham, an advisor with GCERF. Here they discuss how a global policy shift to tackle violent extremism is exposing tensions between the development and security sectors.

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This Week in Markets and Democracy: Obama in East Africa, Democratic Backsliding, and Diplomatic Openings

by Shannon K. O'Neil
Wycliff Madegwa prepares to display a t-shirt newly printed with the image of U.S. President Barack Obama, ahead of his scheduled state visit, in Kenya's capital Nairobi July 23, 2015. Obama will land in Kenya on Friday with a mission to strengthen U.S. security and economic ties, but his personal connection to his father's birthplace will dominate a trip that Kenyans view as a native son returning home (Noor Khamis/Reuters). Wycliff Madegwa prepares to display a t-shirt newly printed with the image of U.S. President Barack Obama, ahead of his scheduled state visit, in Kenya's capital Nairobi July 23, 2015. Obama will land in Kenya on Friday with a mission to strengthen U.S. security and economic ties, but his personal connection to his father's birthplace will dominate a trip that Kenyans view as a native son returning home (Noor Khamis/Reuters).

This is a post in a new series on the Development Channel,“This Week in Markets and Democracy.” Each weekCFR’s Civil Society, Markets, and Democracy Program will highlight noteworthy events and articles.

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Underground Railroad to Save Yazidi Women from the Islamic State Could Offer Critical Intel

by Catherine Powell
Yazidi refugees stand behind fences as they wait for the arrival of United Nations High Commissioner for Refugees Special Envoy Angelina Jolie at a Syrian and Iraqi refugee camp in the southern Turkish town of Midyat in Mardin province, June 20, 2015 (Umit Bektas/Reuters). Yazidi refugees stand behind fences as they wait for the arrival of United Nations High Commissioner for Refugees Special Envoy Angelina Jolie at a Syrian and Iraqi refugee camp in the southern Turkish town of Midyat in Mardin province, June 20, 2015 (Umit Bektas/Reuters).

It has been nearly a year since the self-proclaimed Islamic State kidnapped an estimated three thousand Yazidi women and children during an attack on their villages in northern Iraq. The Islamic State views these attacks, kidnappings, and killings as justifiable because they consider the Yazidi people—a religious minority group—infidels and devil-worshipers.

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