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This Week in Markets and Democracy: Mexico’s Anticorruption Pressure, Ukraine’s Stalled Reforms, and U.S. Acts on Forced Labor

by Shannon K. O'Neil
Pope Francis (C), Mexico's President Enrique Pena Nieto (R) and his wife, Mexico's first lady Angelica Rivera stand together during a farewell ceremony in Ciudad Juarez, Mexico, February 17, 2016 (Reuters/Jose Luis Gonzalez). Pope Francis (C), Mexico's President Enrique Pena Nieto (R) and his wife, Mexico's first lady Angelica Rivera stand together during a farewell ceremony in Ciudad Juarez, Mexico, February 17, 2016 (Reuters/Jose Luis Gonzalez).

Pressure for Mexican Action on Corruption
During a five-day visit to Mexico, Pope Francis repeatedly denounced corruption, decrying the “path of privileges or benefits for a few to the detriment of the good of all.” His message coincides with a strong push by civil society groups to change the status quo. Many are monitoring Congress to ensure it meets a May deadline for secondary legislation to get the National Anticorruption System, signed last year by President Peña Nieto, working. Others are behind the Ley3de3 campaign, which would introduce legislation that defines official corruption and conflicts of interest, and increases the ability to prosecute and convict perpetrators. Coalescing around a social media campaign, active business involvement, academic backing, and even a nod from the pope, the movement needs 100,000 signatures; they hope to collect many times that. Then the question will be whether politicians will tie their own hands.

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The Political Salience of Latin Americans’ Perceptions of Corruption

by Matthew Taylor
A demonstrator holds a scarf during a march to demand for the resignation of Honduran President Juan Orlando Hernandez in Tegucigalpa August 14, 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 (Jorge Cabrera/Reuters). A demonstrator holds a scarf during a march to demand for the resignation of Honduran President Juan Orlando Hernandez in Tegucigalpa August 14, 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 (Jorge Cabrera/Reuters).

Once a year, policymakers and the press are forcibly reminded of the terrible costs of corruption. This year, it fell on January 27, when Transparency International’s Corruption Perceptions Index (CPI) was released, inciting the ritual gnashing of teeth and beating of chests about relative national corruption gains and losses.

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This Week in Markets and Democracy: Moldova’s Protests, Investors Take on Graft, Corruption’s Costs in Nigeria

by Shannon K. O'Neil
People hold a protest in front of the parliament building in Chisinau, Moldova, January 21, 2016. At least 8,000 people protested in the Moldovan capital on Thursday against the appointment of Prime Minister Pavel Filip, whose hasty swearing-in ceremony at midnight also prompted a government spokesman to resign (Reuters/Viktor Dimitrov). People hold a protest in front of the parliament building in Chisinau, Moldova, January 21, 2016. At least 8,000 people protested in the Moldovan capital on Thursday against the appointment of Prime Minister Pavel Filip, whose hasty swearing-in ceremony at midnight also prompted a government spokesman to resign (Reuters/Viktor Dimitrov).

Moldova’s Corruption Undermines EU Bid
Moldova’s corruption continues despite deepening European Union (EU) ties. New Prime Minister Pavel Filip’s pro-EU party is linked to a $1 billion bank embezzlement scheme that saw nearly 13 percent of gross domestic product (GDP) disappear. Two former prime ministers fell in the scandal, one to a no confidence vote while another is in jail. Now, despite government rhetoric accepting the EU Association Agreement governance statutes and promising to stamp out corruption, protesters are calling for Filip’s resignation. It is unlikely that Moldova will move beyond EU “partner” status anytime soon.

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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: Egypt’s Backsliding, UK Transparency Setbacks, New Global Rankings

by Shannon K. O'Neil
Members of security forces keep watch in Tahrir Square before the fifth anniversary of the January 25 uprising, in Cairo, Egypt, January 24, 2016 (Reuters/Mohamed Abd El Ghany). Members of security forces keep watch in Tahrir Square before the fifth anniversary of the January 25 uprising, in Cairo, Egypt, January 24, 2016 (Reuters/Mohamed Abd El Ghany).

United States Undeterred by Egypt’s Democratic Backsliding
Five years after its revolution, Egypt is no closer to democracy. President Abdel Fattah al-Sisi’s government routinely arrests political and social media activists, and has detained tens of thousands of people, many held for months without charges. Raids on news outlets and a law prohibiting journalists from contradicting official government information undermine freedom of expression. Every opposition party boycotted fall 2015 legislative elections and less than a third of the population turned out to vote. Still, the United States seems to be choosing stability over political freedoms. President Obama restored $1.3 billion in annual military assistance cut after Sisi overthrew former president Mohamed Morsi in 2013. And Central Intelligence Agency (CIA) Director John Brennan recently visited Cairo to boost security and counterterrorism cooperation, congratulating Sisi on inaugurating a new parliament.

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This Week in Markets and Democracy: Energy Subsidies, Human Rights in Supply Chains, and Poland’s Democracy Rollback

by Shannon K. O'Neil
A driver waits to fill his car with fuel at a petrol station in Riyadh, Saudi Arabia, December 22, 2015 (Reuters/Faisal Al Nasser). A driver waits to fill his car with fuel at a petrol station in Riyadh, Saudi Arabia, December 22, 2015 (Reuters/Faisal Al Nasser).

Oil Prices Plummet—Will Subsidies Follow?
As crude prices fall below $30 a barrel, oil-producing states face mounting fiscal challenges. Saudi Arabia’s 2015 deficit neared $100 billion, roughly 15 percent of gross domestic product (GDP);Venezuela’s reached 14 percent; and Algeria expects foreign reserves to fall by $30 billion in the coming year to cover its looming fiscal gap. Across commodity-dependent nations finance ministers are looking to cut budgets. Energy subsidies are an obvious target, as these expensive and inefficient payments distort markets and undermine development. In December, Saudi Arabia reduced fuel subsidies and prices went up 50 percent. Algeria promised to cut energy subsidies (though in the short term, they are rising). Even in Venezuela, where citizens pay less for gas than water, rumors are the government is considering a hike. The hesitation? Price increases during recessions don’t go over well; in Venezuela, the unpopular move helped bring Hugo Chavez to power.

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Trade, Anticorruption, and Elections at the Start of 2016

by Shannon K. O'Neil
U.S. Attorney General Loretta Lynch (3rd L) makes remarks at a news conference to announce a law enforcement action relating to FIFA, as (L-R) Assistant U. S. Attorney for Eastern District of New York Evan Norris, U.S. Attorney for the Eastern District of New York Robert Capers, FBI Assistant Director New York Field Office Diego Rodriguez, IRS Criminal Investigation Chief Richard Webber and IRS Special Agent in Charge of Los Angeles Field Office Erick Martinez listen, in Washington, December 3, 2015. Officials Alfredo Hawit and Juan Angel Napout have been arrested by Swiss authorities in the ongoing soccer scandal (Reuters/Mike Theiler). U.S. Attorney General Loretta Lynch (3rd L) makes remarks at a news conference to announce a law enforcement action relating to FIFA, as (L-R) Assistant U. S. Attorney for Eastern District of New York Evan Norris, U.S. Attorney for the Eastern District of New York Robert Capers, FBI Assistant Director New York Field Office Diego Rodriguez, IRS Criminal Investigation Chief Richard Webber and IRS Special Agent in Charge of Los Angeles Field Office Erick Martinez listen, in Washington, December 3, 2015. Officials Alfredo Hawit and Juan Angel Napout have been arrested by Swiss authorities in the ongoing soccer scandal (Reuters/Mike Theiler).

As a new year begins, trade is slower, the drive against corruption continues, and electoral struggles shape fragile democracies. Here are three issues the Civil Society, Markets, and Democracy (CSMD) program will be following in 2016:

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This Week in Markets and Democracy: International Anticorruption Day, Corruption in Ukraine, and Elections in Venezuela

by Shannon K. O'Neil
Lilian Tintori (centre L), wife of jailed Venezuelan opposition leader Leopoldo Lopez, celebrates next to candidates of the Venezuelan coalition of opposition parties (MUD) during a news conference on the election in Caracas early December 7, 2015. Venezuela's opposition won control of the legislature from the ruling Socialists for the first time in 16 years on Sunday, giving them a long-sought platform to challenge President Nicolas Maduro (Reuters/Carlos Garcia Rawlins). Lilian Tintori (centre L), wife of jailed Venezuelan opposition leader Leopoldo Lopez, celebrates next to candidates of the Venezuelan coalition of opposition parties (MUD) during a news conference on the election in Caracas early December 7, 2015. Venezuela's opposition won control of the legislature from the ruling Socialists for the first time in 16 years on Sunday, giving them a long-sought platform to challenge President Nicolas Maduro (Reuters/Carlos Garcia Rawlins).

International Anticorruption Day
December 9 marked the United Nations’ thirteenth annual International Anticorruption Day, offering a chance to reflect on global anticorruption efforts this year—from successful antigraft cases to ongoing challenges fighting high-level theft. In commemoration, here’s what we’ve been reading:

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This Week in Markets and Democracy: Corruption in Honduras and an Election Timeline

by Shannon K. O'Neil
A supporter of former Tanzania's Prime Minister and main opposition party CHADEMA presidential candidate Edward Lowassa cheers during his campaign rally in Tanga October 21, 2015. Tanzanians will go to the polls on October 25 to elect their fifth president. (Reuters/Stringer) A supporter of former Tanzania's Prime Minister and main opposition party CHADEMA presidential candidate Edward Lowassa cheers during his campaign rally in Tanga October 21, 2015. Tanzanians will go to the polls on October 25 to elect their fifth president. (Reuters/Stringer)

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: Africa’s Stalled Progress, Nepal’s Post-Disaster Setbacks, and What We’re Reading on TPP

by Shannon K. O'Neil
A man walks past the debris of collapsed houses in Bhaktapur, Nepal October 5, 15. Twin earthquakes in April and May killed almost 9,000 people in Nepal's worst natural disaster (Reuters/Navesh Chitrakar). A man walks past the debris of collapsed houses in Bhaktapur, Nepal October 5, 15. Twin earthquakes in April and May killed almost 9,000 people in Nepal's worst natural disaster (Reuters/Navesh Chitrakar).

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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