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Development Channel

The Development Channel highlights big debates, promising approaches, and new research and thinkers addressing opportunity and exclusion in the global economy.

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Mossack Fonseca law firm sign is pictured in Panama City, April 4, 2016.
Mossack Fonseca law firm sign is pictured in Panama City, April 4, 2016. Carlos Jasso/Reuters

Corruption Brief Series: How Anonymous Shell Companies Finance Insurgents, Criminals, and Dictators

The latest paper in the Corruption Brief series from the Civil Society, Markets, and Democracy program at the Council on Foreign Relations was published this month. In the brief, Dr. Jodi Vittori, senior policy advisor at Global Witness, addresses the myriad problems posed by anonymous shell companies – corporate entities with few or no employees and no substantive business, which offer a convenient way to privately move money through the international financial system.

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China
This Week in Markets and Democracy: Development Debate, Modi Controls India’s Narrative, and Reigning in Civil Society
This is a post in a new series on the Development Channel,“This Week in Markets and Democracy.” Each week, CFR’s Civil Society, Markets, and Democracy Program will highlight noteworthy events and articles. Development Community Debates MDG Report The UN released its final Millennium Development Goals (MDGs) report, hailing the effort as “the most successful anti-poverty movement in history.” Since the MDG’s introduction fifteen years ago, the number of people living in extreme poverty and the global child mortality rate have halved. Yet the development community is split over how much the MDGs mattered for this progress. The Center for Global Development warns that emphasizing goal-setting distracts from policy discussions. On the other side, proponents contend that setting data-based yardsticks and reducing the global agenda to eight priorities helped channel focus and funding. As attention shifts to post-2015 development goals, the UN report recognizes uneven gains–growth in China and India has pulled millions out of poverty while the poor in other countries have been left behind. Modi’s Heavy-Handed Efforts to Control the Indian Narrative The Indian government has delayed release of a UNICEF child welfare survey for months, some believe to avoid political embarrassment for Prime Minister Narendra Modi after his home state of Gujarat–where he served as chief minister until 2014–showed dismal results. These revelations coincide with the public ouster of Nobel Prize-winning economist Amartya Sen from Nalanda University. In a televised interview this week, Sen warned of unprecedented government interference in academia under Modi. Modi’s carefully-crafted narrative extends to social media, where his government rolled out a Narendra Modi mobile app. The app awards points for approving government policies through “likes” and sharing flattering articles about Modi–there is no option to disapprove. Reigning in Civil Society in China and Cambodia The Chinese and Cambodian governments are moving forward with proposed laws that threaten civil society autonomy. China’s NGO bill would require both foreign and domestic groups to undergo vetting by state security forces. While framed as part of a broader rule-of-law campaign, NGOs contend that it would allow the government to shut them down. In Cambodia, the draft Law on Associations and Non-Governmental Organizations (LANGO) gives the government broad powers to dissolve any organization deemed a danger to national security or to the “culture, traditions and customs of Cambodian national society.” Cambodian legislators say the bill enables needed regulation of some 5,000 civil society groups. Human rights advocates disagree–32 domestic and international groups demanded the law’s withdrawal, and protestors rallied at Cambodia’s National Assembly to block its passage.        
Emerging Markets
This Week in Markets and Democracy: Cost of Tax Evasion, Curbing Corruption, and Labor Rights
This is a post of a new series on the Development Channel,“This Week in Markets and Democracy.” Each Friday, CFR’s Civil Society, Markets, and Democracy Program will highlight the week’s noteworthy events and articles. Cost of Tax Breaks and Evasion on African Economies As organizations gear up for July’s Third International Conference on Financing for Development, new reports highlight the toll of tax evasion and outsized corporate tax breaks on African economic development. The World Bank calculates that between 2002 and 2009, Tunisia lost at least $1.2 billion in import taxes as firms undervalued and underreported imports. A recent report by Health Poverty Action (HPA) reveals that Sierra Leone has lost nearly $200 million a year in tax breaks, or three times its 2015 health budget. HPA estimates that by reducing benefits for the nation’s five largest mining firms, Sierra Leone could generate an extra $94 million in government revenue. Curbing Corruption in Central and Southeast Asia Asian countries are fighting corruption through digital platforms, legal reforms, and innovative civil society programs. With public procurement accounting for 20 percent of all government expenditures, the Kyrgyz Republic is taking on graft by requiring government bodies to publish all public contract details on a central web portal. Since the roll-out, 700 state and local governments have switched to e-procurement and over 2,000 businesses have registered. In Cambodia, Transparency International has rolled out an Anti-Corruption Card, which citizens receive in exchange for signing a declaration against corruption. The cards, now numbering over 8,000, provide discounts at cafés and shops in Phnom Penh. ILO and UNODC Launch Global Call to Action for Labor Rights Against the background of horrific labor abuses in preparations for the 2022 Qatar World Cup, the ILO and UNODC announced a partnership to promote fair and ethical labor recruitment during this week’s UN Human Rights Council session in Geneva. The two organizations are urging governments, labor organizations, and the private sector to end fraudulent labor recruiting through broad legal, regulatory, and enforcement reforms. Such legal protections would be welcome in Hong Kong, where existing laws don’t recognize labor exploitation or domestic servitude as human trafficking. In the private sector, Apple recently ended all recruitment fees for its factory workers, serving as a model for other corporations to end rights violations in their supply chains.    
Development
Gender Equality and the Sustainable Development Goals
This year—2015—is an auspicious moment for global development. In September, as the Millennium Development Goals (MDGs) expire, UN member states will adopt a new framework that will guide international development over the next fifteen years. In advance of the fall summit on the Sustainable Development Goals (SDGs)—as well as the upcoming Third International Financing for Development Conference in Addis Ababa, Ethiopia—I hosted Thomas Gass, assistant secretary-general for policy coordination and inter-agency affairs at the UN Department of Economic and Social Affairs, and Ambassador Elizabeth Cousens, deputy chief executive officer at the United Nations Foundation and former U.S. chief negotiator on the SDGs, to discuss gender equality and the future of the international development agenda. It is indisputable that over the past fifteen years the MDGs have contributed to advancement for women and girls—particularly in the area of maternal health, where mortality rates have been halved, and in access to primary education, where the global gender gap has virtually closed. However, many argue that the MDGs could and should have done more to improve the status of women and girls. Several issues critical not only to women’s progress, but also to overall prosperity and stability—such as child marriage, violence against women, and valuation of women’s work—were overlooked. The SDGs afford a critical opportunity to dramatically expand upon progress for women and girls and increase our collective ambition for achieving gender equality. Importantly, early drafts of the SDGs include a specific gender equality goal with targets that are considerably more comprehensive than those included in the MDG framework, and issues related to the advancement of women and girls have been integrated throughout the post-2015 goals. Yet questions remain over the implementation of the proposed SDGs. The UN zero draft of the SDGs released earlier this month includes seventeen goals and 169 targets. Given the high number of goals and targets, how will countries prioritize their efforts? And how can global actors ensure attention to gender equality—an issue that is too often siloed or overlooked, despite considerable evidence of the connection between women’s progress and development? There have been encouraging signs that the commitment to gender equality outlined in the SDGs is strong. During our conversation last week, former Ambassador Cousens noted that the goal on gender equality was the first on which government and civil society groups reached a consensus during the initial stages of the Open Working Group process that formed the basis of the SDG zero draft. But the real test of this commitment will be the extent to which gender equality targets are financed, and how member states are held accountable. Indicators of progress for the SDGs will not be adopted until next March, and although the current proposal includes many references to women and girls, it is unclear whether some potentially contentious issues—for example, female genital mutilation—will survive the negotiation process. The comprehensive gender equality targets included in the SDG zero draft are a positive step forward for the post-2015 development agenda. The promise of this framework, however, will only be realized if member states and development practitioners are held accountable for financing and implementing progress toward the equality of women and girls.
  • Development
    Beyond the Millennium Development Goals: Strengthening Health Systems for Sustainability
    Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is from Amit Chandra, an emergency physician and global health consultant based in Washington, DC. This year marks the end of the fifteen-year Millennium Development Goal (MDG) framework. The health MDGs focused on single, discrete issues including hunger, maternal and child health, and major infectious diseases, and they successfully targeted the spread of HIV and tuberculosis. Slated to replace the MDGs, the Sustainable Development Goals (SDGs) similarly focus on single issues—hunger, sanitation, and an expanded list of key diseases. Continuing this approach fails to address today’s global health challenges, in particular rising mortality associated with non-communicable diseases (NCDs), road traffic accidents, and Ebola-like infectious disease epidemics. To combat these threats, we need to strengthen countries’ entire health systems, specifically incorporate data to identify problems, expand technical capacity, and boost financial and human resources for health. In many developing countries, health systems now face the dual burden of NCDs and persistently high rates of infectious diseases like HIV, TB, malaria, and tropical diseases. Studies estimate that over 900 million people in developing countries have high blood pressure, though only one third of them (300 million) are aware of their disease, and only one third of those aware (100 million) are currently on treatment. Unlike with most infectious diseases, people can live for years with high blood pressure, diabetes, or early stages of cancer without symptoms. Many in the developing world lack access to primary care, and so their first contact with a doctor may only occur when their conditions escalate. In this way, weak health systems turn  preventable and treatable chronic diseases into silent killers. Tackling NCDs requires universal primary health systems that provide prevention, screening, and treatment services to entire populations, not just to the few identified with a particular disease. Health systems also matter for lowering traffic fatalities. Road traffic accidents cause over 1.24 million deaths per year worldwide. In the developing world, an injured person lying on the roadside often depends on bystanders for transport to the nearest hospital, which is unlikely to provide surgical care. A robust health system would enable coordination between health, law enforcement, and public policy leaders to reduce traffic fatalities. Take Rwanda for example. In 2001, the country had one of the highest traffic fatality rates in the world. To address this problem, the government passed mandatory seat belt and helmet laws, increased enforcement of speed limits, and implemented a public awareness campaign. Drivers of motorcycle taxis, a popular method of transport, are even required to carry an extra helmet for their passengers, which they sling over their elbows while looking for customers. As a result, road traffic deaths fell by over 30 percent. On a recent trip to Kigali, I was impressed to see near universal helmet use among motorcycle drivers and passengers. The absence of adequate health systems can permit novel, unexpected infectious disease outbreaks to escalate and spread. The recent Ebola epidemic in West Africa—often cited as an example of the failure of the World Health Organization (WHO)—is first and foremost a failure of the national health systems of the three countries most affected by the disease. Guinea, Liberia, and Sierra Leone’s inability to effectively respond to the initial outbreak led directly to the spread of the disease. Too few hospitals and clinics, a dearth of doctors and nurses, and limited public outreach capacities contributed to a climate of misinformation and a breakdown of public services. Preventing future outbreaks will require more than a WHO emergency fund; it will require national health systems capable of detecting, treating, and isolating a surge of sick and exposed patients. Now, as we determine the scope of the SDGs, we have an opportunity to strengthen health systems. National governments should be encouraged to provide basic health services to their populations. The global health community can support this effort by financing health management training and an expanded health provider workforce. To quote the UN Secretary General’s report on the SDGs, meeting these goals by 2030 will require that we “…act, boldly, vigorously and expeditiously, to turn reality into a life of dignity for all, leaving no one behind.”    
  • Americas
    This Week in Markets and Democracy: African Progress, EU Transparency, Term Limits, Foreign Aid, and War Crimes
    This post is part of the series, “This Week in Markets and Democracy.” Each Friday, CFR’s Civil Society, Markets, and Democracy Program, will highlight the week’s noteworthy events and articles. African Progress Report for 2015 This week, the African Progress Panel (APP)—a high-level ten-member group advocating for equitable and sustainable development—released its 2015 Africa Progress Report. Power People Planet: Seizing Africa’s Energy and Climate Opportunities highlights that Africa’s basic energy challenges, starting with the fact that two thirds of the region’s population—some 600 million sub-Saharan Africans—don’t have access to electricity. To ensure universal access by 2030, the APP recommends countries increase their energy sector spending to 3 to 4 percent of their gross domestic product (GDP) and expand private sector involvement. The group hopes to influence discussions at next month’s Third International Conference on Financing Development and at the Paris Climate Summit in November. European Commission New Transparency Tool This week, the Transparency International EU Office launched an interactive database—the EU Integrity Watch—to provide information on the lobbying activities at the European Commission, the European Union’s executive body, as part of a larger ongoing campaign to reduce unethical lobbying. Compiling information on meetings with high-level officials, the platform shows that corporations dominate these interchanges: between December 2014 and June 2015, corporate lobbyists comprised 75 percent of European Commission lobby meetings; NGOs, think tanks, local authorities, and a few others made up the rest. Topping the list were Google, GE, and Microsoft (all of which are or have been embroiled in legal cases with the European Commission). While not necessarily surprising, easy open access may spur changes. Presidential Term Limits Rwanda’s ruling party, the Rwandan Patriotic Front (RPF), is backing a constitutional amendment that would allow President Paul Kagame to run for a third presidential term in 2017. Third terms are not uncommon in Africa. Sudanese President Omar al-Bashir was re-elected in April for his third term, and Burundi President Pierre Nkurunziza announced that he will be running for a third term come July. Kagame has not officially announced if he will run again. Yet a recent statement that “term limits have nothing to do with democracy” is inciting much debate between staunch defenders of the democratic alteration of power and those in favor of maintaining stability in the region. Foreign Aid Transparency This week, Nepali Prime Minister Sushil Koirala promised zero-tolerance of corruption in how the government will spend the $3 billion in foreign aid pledged to rebuild the country after April’s devastating earthquakes. International donors, led by India and China, remain skeptical. Foreign aid is also proving contentious in the United Kingdom, given recent reports that the British Foreign and Commonwealth Office (FCO) spent $22,000 on an Ethiopian quiz show and $1,500 on a Facebook program. To address worries in the United States, the United States Agency for International Development (USAID) maintains an aid transparency tracker, where users can find out exactly where and how aid has been spent in forty-four countries. UN Report on Possible War Crime Committed in Gaza In a new UN Human Rights Council report, an independent commission concluded that both Israel and Palestinian militant groups may have committed war crimes in Gaza last summer in a surge of violence that killed over 2,300 people. In response to the UN report, Palestinian Foreign Minister Riyad al-Maliki delivered to the International Criminal Court (ICC) files describing Israel’s alleged war crimes and breach of international law. The ICC launched a preliminary examination into possible war crimes in January, and the recent UN report may push it to open a full investigation.