Tag: Corruption
Corruption and concessions
On July 9 the American Enterprise Institute held a panel discussion about the intersection between authoritarian corruption, dictatorial regimes, terrorism, and criminal abuse of free markets. The panel guests included Bruce Bueno de Mesquita, Julius Silver Professor of Politics at New York University and a senior fellow at Stanford’s Hoover Institution, and Daniel Twining, President of the International Republican Institute. The panel was moderated by Clay R. Fuller, Jeane Kirkpatrick Fellow at AEI, where he researches authoritarian governance, illicit finance, and corruption.
Mesquita noted that the traditional perpetrators of corrupt acts are not limited to autocrats, terrorists or drug dealers. Even democratically elected leaders present corruption risk, especially when they make deals with corrupt actors, even though the deals are meant to further the interests of a democratic nation. This is one of the reasons it is so difficult to combat corruption. To solve the problem, countries must address the question of how to please constituents on key policy issues without “concessions” to corruption. Corrupt government leaders can pay their cronies, to the detriment of the citizens.
Twining said that when democratic countries support corrupt governments through concession payments to further foreign policy agendas, there is a spillover into surrounding countries. Terrorism, migration, and human trafficking can be tracked to corrupt and kleptocratic governance.
Fuller discussed corruption more broadly, noting that corruption is not unique to kleptocratic, despotic, and authoritarian regimes. Rather, corruption in these systems of governance is more visible and perhaps more detrimental to large swathes of the populace because it privileges a small group, granting them nearly all legitimate government powers.
With regards to how to mitigate corruption, Mesquita focused on the promotion of transparency. More government transparency drives accountability, which can spur the development of good governance. Constituents can play an important role in democratic states. It is important to educate their publics about the effects that corruption has in authoritarian countries, and the way that concession payments can contribute to corruption. Education on this issue will increase the priority that democratic governments give to better governance overseas, rather than just a blind pursuit of foreign policy goals.
Furthermore, Mesquita believes that the promotion of democracy is key to good governance abroad. While the United States has tried to promote democracy, past attempts have frequently fallen short. Mesquita thinks that US efforts have not been sincere; autocrats will comply more readily to US policy in exchange for money if there are no stipulations regarding changes in government. However, the biggest barrier to dealing with corruption is the fact that despots rely on few people to stay in power. Corrupt leaders allow their cronies to steal, launder money, and pad their coffers at the expense of citizens as long as they remain loyal.
Twining discussed the effect that the Chinese Belt and Road initiative is having on corruption globally. Specifically, in parts of Asian, Africa, the Middle East, and Latin America, authoritarian leaders are taking Chinese loans, aid, and investments. These deals contribute to corruption in local politics because they are often not transparent. Furthermore, they involve a potential loss of sovereignty, especially if they default on loans. He concluded that the United States has an important role to play in buttressing transparency and accountability globally. The desire for freedom and good governance is universal.
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Take the money, ask no questions
The Wilson Center held a discussion this week on “Democratic and International Impacts of Kleptocracy,” with Edward Melon, Kennan Institute Fellow, along with Casey Michel, reporter at Think Progress, and Jodi Vittori, a Fellow at the Carnegie Endowment for International Peace. The panelists touched on kleptocracy in Asia, mainly in Tajikistan and Afghanistan, and its implications for democracy. They also addressed the implications of financial secrecy as practiced in some states.
Edward Melon diagnosed the political situation in Tajikistan as extremely corrupt, with one leader, Emomali Rahamon, holding a grip on the country for decades. Since coming to power, Rahamon has built an authoritarian regime grounded on nepotism and favoritism. His family controls politics and business all over the country. His eldest son is the current mayor of the capital city. His daughter is the chief of the staff. His sons-in-law and other family members monopolize the biggest companies and projects that render the most lucrative benefits. The also embezzle money embezzlement and export capital. Tajikistan is one of the most kleptocratic countries in Asia, with a highly unequal distribution of wealth.
The state apparatus silences voices of opposition and even, as Melon puts it, engages in “transnational oppression” by targeting its opponents outside the country. This strengthened authoritarianism could revive the civil war that tore the country apart from 1992 to 1997.
Michel focused on the US. It is increasingly a hub of explicit financial secrecy internationally. The small state of Delaware has been in the forefront of implementing financial secrecy rules. Friendly laws and a unique model of “take the money, ask no questions” has captivated myriad corporations. Big companies, embezzlers, traffickers and shady corporations moved there to cloak their money in secrecy. Michel claims, “Delaware now has more corporations than people.”
But Delaware is not the only state exploiting secrecy. Nevada and Wyoming have joined it. According to Michel, in 1991 Nevada loosened its laws to model itself as Delaware of the west. By 2001, it further increased financial secrecy to attract more corporations. The same thing goes for Wyoming; it has adopted similar policies to accommodate corporations. Shell companies find such states a safe haven for their money.
Michel argues the US is ranked as the second contributor to financial secrecy in the world after Switzerland. Delaware, Nevada and Wyoming are at the bottom of the barrel in terms of financial stanadards.
Vittori offered an overview of kleptocracy in Afghanistan. Corruption there has become endemic in almost all segments of the Afghan state. High level officials are involved in payoffs, embezzlement, and drug trafficking, fueling insurgent groups instead of combating them. The insurgents are readily recruiting, as they can provide protection and money. Vittori sees the kleptocratic environment in Afghanistan as becoming normalized, rendering the status quo more beneficial for some than reform would be.
Security sectors in a majority of Third World countries are maintained by loyal people, mostly family members or trusted individuals. Their role has more to do with defending the regime than the borders or citizens. Vittori says around 50% of the budget in sub-Saharan Africa goes to security sector. Transparency and accountability are rarely raised. Patronage and nepotism cover things up.
Bottom line: kleptocracy is inherent in weak states. It undermines democracy and the rule of law. It feeds grievances, terrorism, and criminal groups. But some democratic countries do not care about kleptocracy in other countries, as long as the money flows to them.
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Peace picks February 2-6
- Fighting ISIS: News from the Front Lines in Kurdistan | Tuesday February 3 | 10:00-11:30 | The Center for Transatlantic Relations, SAIS | REGISTER TO ATTEND | The Center for Transatlantic Relations at SAIS is hosting a discussion with Aziz Reza, senior advisor to the president of the Kurdistan Regional Government. The talk will also feature Mousa Ahmed Agha, Deputy Head, Barzani Charity Foundation and will be moderated by Sasha Toperich, Senior Fellow, Center for Transatlantic Relations SAIS
- Yemen – If this is a policy success, what does failure look like? | Tuesday February 3 | 12:30-1:45 | Georgetown University | REGISTER TO ATTEND | Last September, in announcing military operations against ISIS/ISIL, President Obama referred to Yemen as a US policy success, to the bafflement of many within and outside the country at the time. The jury was still out on our drone-dependent security/CT operations, the economy was in disarray and the political transition – a relative bright spot – was dimming. Recent events call the September judgment into even more question. What is really happening, and what does it mean for the US, the region, and the Yemenis? Georgetown University invites to a discussion with Ambassador Barbara K. Bodine, Distinguished Professor in the Practice of Diplomacy and the Director of the Institute for the Study of Diplomacy at the Edmund A. Walsh School of Foreign Service at Georgetown University.
- Countering Violent Extremism: Improving Our Strategy for the Future | Wednesday February 4 | 14:00-15:00 | Brookings Institute| REGISTER TO ATTEND | The recent deadly attacks on the Charlie Hebdo offices and the Jewish market in Paris were sharp reminders of the continuing threat of violent extremism in the West. With similar attacks in Ottawa and Sydney, and a concerning number of Westerners moved to fight in Syria, preventing acts of violence by extremists has become a top priority. To help the United States and its allies move forward, the White House announced that it will host a Summit on Countering Violent Extremism on February 18. Bringing together a panel of experts on counterterrorism and radicalization, the conversation will raise questions about the efficacy of the current U.S. approach, successful practices of counterterrorism programs both domestically and abroad, and strategies for countering violent extremism going forward.
- Subcommittee Hearing: The Palestinian Authority’s International Criminal Court Gambit: A True Partner for Peace? | Wednesday February 4 | 2:00-5:00 | Subcommittee on the Middle East and North Africa | The House Subcommittee on the Middle East and North Africa is holding a hearing on the issue of the Palestinian Authority’s pursuit of membership in the International Criminal Court. Among the witnesses called to speak are Jonathan Schanzer, Vice President for Research, Foundation for Defense of Democracies, Eugene Kontorovich, Professor of Law, Northwestern University School of Law, Danielle Pletka, Senior Vice President, Foreign and Defense Policy Studies, American Enterprise Institute and David Makovsky, Ziegler Distinguished Fellow, The Washington Institute for Near East Policy.
- Why Corruption Threatens Global Security | Wednesday February 4th | 16:00-17:30 | Carnegie Endowment for International Peace | REGISTER TO ATTEND The world seems to be on fire—the spread of the Islamic State in Iraq; the endurance of Boko Haram in Nigeria; the East-West standoff in Ukraine. Is there a common thread tying these events together? Sarah Cheyes, who spent a decade living and working in Kandahar Afghanistan, and serves as special assistant to the chairman of the Joint Chiefs of Staff, will demonstrate how governments that resemble criminal organizations drive their indignant constituents to extremes. Drawing on her personal experience in some of the most venal environments on earth, Chayes will present examples of what emerges where kleptocracy prevails: Afghans returning to the Taliban, Egyptians overthrowing the Mubarak government (but also rebuilding Al-Qaeda), and Nigerians embracing both radical evangelical Christianity and the Islamist terror group Boko Haram.
- Advancing U.S-Afghan Ties: A discussion with Senator Tom Cotton| February 5 |9:oo -9:45| USIP | REGISTER TO ATTEND |The election of a reformist national unity government in Afghanistan and the signing of the Bilateral Security Agreement with the United States have restored bilateral relations that had badly deteriorated under President Karzai. The Afghan government, facing huge economic and security challenges, has requested significant and sustained assistance from the United States and the international community over the next decade. The United States has committed to provide civilian and military support up to the end of 2016. Several weeks before an anticipated visit by President Ashraf Ghani and Chief Executive Officer Abdullah Abdullah, the question of future of U.S.-Afghan relations becomes more critical. USIP and the Alliance in Support of the Afghan People is pleased to host Senator Tom Cotton (R-AR), a U.S. Army veteran who served in both Afghanistan and Iraq and a newly elected member of the U.S. Senate, to provide his views on the shape of future U.S.-Afghan relations. Senator Cotton serves on the Armed Services Committee and the Select Committee on Intelligence.
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