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Showing posts for "Governance"

Who Governs Global Value Chains?

by Guest Blogger for Shannon K. O'Neil
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
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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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
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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This Week in Markets and Democracy: China’s Private Sector Corruption, Zimbabwe’s Protests, New Corruption Brief

by Shannon K. O'Neil
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: U.S. Hunts Stolen Uzbek Assets, Bribery Still Pays, Uganda’s Democracy Backtracks

by Shannon K. O'Neil
A man passes by a poster of Uganda's President Yoweri Museveni and a poster of opposition leader Kizza Besigye in town of Kaabong in Karamoja region, Uganda, February 17, 2016 (Reuters/Goran Tomasevic). A man passes by a poster of Uganda's President Yoweri Museveni and a poster of opposition leader Kizza Besigye in town of Kaabong in Karamoja region, Uganda, February 17, 2016 (Reuters/Goran Tomasevic).

United States Hunts Stolen Uzbek Assets
The U.S. Department of Justice (DOJ) is having a hard time collecting foreign officials’ ill-gotten gains. After finding evidence of bribery, the DOJ still needs to physically seize assets. The latest setback comes in the case against the Uzbek president’s daughter, Gulnara Karimova, for accepting bribes from Russian telecoms company VimpelCom. In the current round the DOJ and Uzbekistan are vying for some $114 million stashed in Karimova’s Irish bank accounts. This is just a small part of the $850 million the DOJ believes Karimova hid in accounts across Belgium, Luxembourg, and Ireland. If they get the money the Uzbek government, led by Karimova’s father, is already demanding its “rightful” return to Uzbekistan, the “victim” of corruption.

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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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This Week in Markets and Democracy: International Labor Conference, Brazil’s Corruption Resignations, Politicians vs. the Press

by Shannon K. O'Neil
Garment workers rest inside a factory after their lunch time in Phnom Penh October 8, 2015. Cambodia agreed on Thursday to raise the minimum wage for workers in its crucial textiles and footwear sector to $140 per month from next year, short of the figures demanded by powerful trade unions long at odds with the government over pay (Reuters/Samrang Pring). Garment workers rest inside a factory after their lunch time in Phnom Penh October 8, 2015. Cambodia agreed on Thursday to raise the minimum wage for workers in its crucial textiles and footwear sector to $140 per month from next year, short of the figures demanded by powerful trade unions long at odds with the government over pay (Reuters/Samrang Pring).

Fast Fashion Still Exploits Workers
While multinational retailers such as H&M, Gap, and Walmart can get a swimsuit or sundress from the factory floor to customers’ closets within weeks, new reports show they still do not protect the workers that make this possible. Three years after Bangladesh’s Rana Plaza building collapse, which killed over a thousand workers and injured another 2,500, Walmart refuses to disclose details on factory safety inspections. Documents from a more forthcoming H&M show nearly 80,000 Bangladeshi workers make their clothes in workrooms without basic safety measures such as fire exits. And Gap has balked at Cambodian worker demands for a living wage—they now earn as little as $5 a day. At this week’s International Labor Conference in Geneva, unions and other groups will try to force measures to improve workers’ rights by holding multinationals more accountable.

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The Anticorruption Boom and U.S. Foreign Policy

by Matthew Taylor
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 (Reuters/Dan Kitwood). 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 (Reuters/Dan Kitwood).

April and May brought some of the most important movement on the anticorruption front of any two-month period in the past decade. Recapitulating briefly:

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This Week in Markets and Democracy: Deadly Kenyan Protests, Vietnam’s Labor Rights, Still No Haiti Election

by Shannon K. O'Neil
A riot policeman fires a teargas canister to disperse supporters of Kenya's opposition Coalition for Reforms and Democracy (CORD) during a protest at the premises hosting the headquarters of Independent Electoral and Boundaries Commission (IEBC) to demand the disbandment of the electoral body ahead of next year's election in Nairobi, Kenya, May 23, 2016 (Reuters/Thomas Mukoya). A riot policeman fires a teargas canister to disperse supporters of Kenya's opposition Coalition for Reforms and Democracy (CORD) during a protest at the premises hosting the headquarters of Independent Electoral and Boundaries Commission (IEBC) to demand the disbandment of the electoral body ahead of next year's election in Nairobi, Kenya, May 23, 2016 (Reuters/Thomas Mukoya).

Electoral Violence Starts Early in Kenya
In Kenya, police cracked down on opposition protests, killing three and injuring more. With elections still more than a year away, the Coalition for Reforms and Democracy (CORD) party is demanding that current electoral officials resign for corruption and bias toward President Uhuru Kenyatta’s ruling Jubilee coalition. In the wake of the bloodshed CORD halted the demonstrations and agreed to negotiations, responding to other governments’ calls for dialogue. But given Kenya’s history of electoral violence and impunity, many expect clashes to continue.

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

by Shannon K. O'Neil
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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