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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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Americas
Progress on Implementing UN Security Council Resolution 1325 on Women, Peace, and Security
This year marks the fifteenth anniversary of UN Security Council Resolution 1325, a landmark resolution recognizing the importance of women as leaders in the peace and security sector, not merely as victims of conflict. I recently hosted Nahla Valji—the head of women, peace, and security work at UN Women—to discuss international progress on the resolution and the U.S. role in its implementation. In both 2004 and 2005, the president of the Security Council urged member states to adopt national action plans (NAPs) to guide implementation of resolution 1325. So far, fifty countries have done so, including the United States and—most recently—Afghanistan. The evidence from the last fifteen years demonstrates that increased participation of women in peace and security matters and is associated with reduced conflict, violence, and extremism. Afghan civil society groups initiated the call for a national action plan in 2007, and official meetings on the potential document started in 2009. To garner support, activists and policymakers were careful to frame women’s social equality as critical to Afghan development and security priorities. Mahbouba Seraj, a member of the Afghan Women’s Network who worked on the NAP, asked “resistant men to imagine Afghanistan as a half-crippled body. Without the inclusion of 50 percent of its citizens, how could Afghanistan really achieve national peace and reconstruction?” Furthermore, the drafters worked with religious leaders to link the argument with Islam and de-emphasize the NAP’s Western roots. Yet the implementation of the Afghan NAP will likely be dependent on foreign—predominantly Western—governments, as those donor countries will provide the funding for these gender initiatives. As Miki Jacevic, vice chair of the Institute for Inclusive Security, notes in ForeignPolicy.com, “If you don’t have the money for it, we should not kid ourselves that Afghans will implement this.” Enter the U.S. National Action Plan—a document that calls for empowering “half the world’s population as equal partners in preventing conflict and building peace in countries threatened and affected by war, violence, and insecurity.” The U.S. NAP is international in focus, and though it does include mention of the “recruitment, retention, treatment, and integration of women into U.S. Armed Forces,” much of the strategy faces outward, on women outside the United States. The Organisation for Security and Co-operation in Europe (OSCE) criticizes this tendency in the NAPs of developed countries in its 2014 study on UNSCR 1325. “National implementation strategies are relevant for all countries, not only for those involved in conflict,” the report reads. “Several studies have already pointed out that including more women in military and peacekeeping structures and operations has the potential to greatly enhance management and military operational effectiveness. “The Women, Peace and Security agenda not only focuses on situations where peace is immediately threatened, but also aims at ensuring higher female participation in the political sphere overall. It is not possible to comply with this agenda by suddenly including more women only in conflict or post-conflict situations—women must be included in everyday political and military life and operations to make their participation meaningful.”
China
This Week in Markets and Democracy: Climate Finance, Aid, Anti-Corruption Tech, and the ICC
This is the fourth 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. Gap in climate finance The six big multilateral development banks (MDBs) released a new report on climate financing this week. In 2014, multilaterals spent $28 billion to mitigate greenhouse gas emissions and to help countries adapt to climate change. South Asia and Latin America received the largest share of this record outlay, up over $4 billion from last year. Still to meet the 2020 goal of mobilizing $100 billion to help developing nations cope with climate change, the MDBs are being asked to stretch their “balance sheets and crowd in more capital.” The World Bank and others are pushing to bolster low-emission investment, particularly from the private sector. And at next month’s Third International Conference on Financing for Development, public, private, and NGO sectors will focus on clean energy financing and climate resilience among other development priorities. Technology versus corruption European researchers from Cambridge and several other universities are developing a tech platform to make Europe’s public spending more transparent and easier for citizens to scrutinize. To identify corruption in public spending, the Digital Whisleblower project (DigiWhist) will collect public spending information from across thirty-four European countries, link this data to corporate information and political officeholder records, and using sophisticated algorithms, sniff out corrupt behavior. Ultimately, the DigiWhist platform will not only map risk of corrupt behavior and contracts on the national and regional scale, but also track suspicious suppliers and pinpoint individual contracts. China too is using technology, releasing an app through which citizens can anonymously submit proof of government corruption, specifically officials abusing public funds for personal consumption. Improving humanitarian aid The United Nations Office for the Coordination of Humanitarian Affairs’ (OCHA) annual Global Humanitarian Overview Status Report revealed a huge gap in resources for humanitarian crises. With only 26 percent of the necessary $18.8 billion committed, nearly 80 million people across thirty-seven countries remain vulnerable. In the July/August edition of Foreign Affairs, David Miliband and Ravi Gurumrthy of the International Rescue Committee (IRC) and Michael Barnett and Peter Walker of George Washington University and Chatham University, respectively, discuss this and other challenges facing humanitarian aid. In addition to resources, the IRC’s Miliband and Gurumrthy argue for focusing on outcomes rather then inputs—for instance measuring functional literacy not number of new schools. They also argue for reducing bureaucratic red tape, consolidating response efforts, encouraging competition among humanitarian organizations to improve delivery, and shifting the focus from international goals like the Millennium Development Goals to country-specific targets. Barnett and Walker emphasize local partnerships as the means to improve accountability and design effective programs. South Africa Ignores the ICC This week, Sudanese President Omar al-Bashir’s again evaded arrest for the genocide and war crime charges brought against him by the International Criminal Court (ICC). South African President Jacob Zuma’s administration ignored the ICC’s request to arrest al-Bashir when he attended the African Union Johannesburg summit. This incident raises questions about the ICC’s credibility in Africa more broadly, as South Africa’s action follows Kenya’s refusal to cooperate with investigations into senior officials’ roles in inciting electoral violence in 2007 and Ugandan call for African nations to withdraw from the ICC altogether. Zuma’s choice also flouted South Africa’s High Court, which had ordered al-Bashir to remain in the country pending a judicial decision over whether to hand him over to the ICC. CFR Senior Fellow John Campbell sees Zuma’s decision as a threat to South Africa’s rule of law. Read his analysis here.
Asia
Flawed and Unequal Justice in Pakistan
Earlier this month, Pakistani authorities revealed that eight of the ten men accused in the 2012 attack on Malala Yousafzai were acquitted, despite a previous announcement that all ten were sentenced to twenty-five years in prison. Malala’s case is especially remarkable considering she won the 2014 Nobel Peace Prize, recognizing her advocacy for girls’ education even after being shot in the head for her work. The regional deputy police chief, Azad Khan, was quoted in the New York Times saying that the men “were released for lack of evidence,” chalking the verdict up to a failure of Pakistan’s justice system. The trial was reportedly held in one of Pakistan’s secretive anti-terrorism courts, where decisions are made behind closed doors in an attempt to protect judges. According to the same article, “such trials are hampered by poor evidentiary standards and the security forces’ widely documented pattern of rounding up suspects, sometimes on flimsy grounds, and of obtaining confessions through torture.” Yet the acquittal of Malala’s attackers comes at a moment when Pakistan is coming under scrutiny from human rights organizations for the opposite reason: exceedingly harsh punishments—including nearly 140 executions in the last six months—from the same flawed anti-terror courts. A recent New America Foundation paper details the recent changes in Pakistan’s counterterrorism legal system, instituted following the December attack on a school that killed over 130 children. The paper argues that although the amendments have the “commendable goals of reducing delays and ensuring better security for judges trying terrorism cases, the legitimacy of the process has suffered from stripping away the traditional protections like an open trial, right to counsel, and burden of proof on the prosecution” that used to be afforded the accused. While this disregard for the legal and human rights of terrorism suspects is a significant flaw in Pakistan’s justice system, so too is the inequality evident in the handing down of sentences from these courts. While terrorism suspects are hanged “left, right, and center,” members of extremist groups who are suspects in cases of gender-based violence, like Malala’s, or attacks on religious minority groups go unpunished. According to International Crisis Group, women in Pakistan have long been the “principal victims of state policies to appease violent extremists.” Despite a pledge from Prime Minister Nawaz Sharif on March 8, 2015, International Women’s Day, that the “government would take all necessary legislative and administrative steps to protect and empower women,” it is clear that such legal reforms are still lacking. Pakistan’s justice system is flawed in many ways, and reform is necessary to ensure the protection of the human and legal rights of the accused. Yet any reform must also address the unequal application of the law toward women and girls, like Malala, who are survivors of gender-based violence.
  • G7 (Group of Seven)
    Gender Equality at the G7 Summit
    As the annual Group of Seven (G7) Summit ended this week, world leaders issued a declaration to address some of the world’s most pressing issues. Prominently featured in this document is a call to promote women’s economic empowerment and entrepreneurship, described as a “key driver of innovation, growth, and jobs.” In a separate annex, the G7 leaders endorsed specific steps to promote women’s entrepreneurship, including facilitating access to finance, improving work-family policies for men and women, encouraging girls’ participation in STEM (science, technology, engineering, and mathematics) disciplines, and championing successful female entrepreneurs as role models for the next generation. This is not the first time that women’s empowerment has been prioritized in a G7 declaration. In fact, it’s part of a recent trend in which gender issues have been elevated by world leaders in international fora and integrated into mainstream policy discussions. Consider, for example, Canada’s leadership of the Group of Eight (G8) in June 2010, which gave rise to the Muskoka Initiative on maternal and child health and led to a commitment to invest in national health systems. The foreign ministers of the G8 have also highlighted the role of women in peace and security. In 2012, the ministers called for implementation of UN Security Council Resolution 1325 on Women, Peace, and Security. A year later, the same group endorsed a declaration on preventing sexual violence in conflict. Gender equality has been a focus of the Group of Twenty (G20) Summit as well.  In November 2014, each G20 country set a historic commitment to reduce the gap between the share of men and women in their workforce by 25 percent by 2025. The G20 commitment to increase women’s labor force participation was echoed at the Kruen summit this week in the G7 declaration that emerged. It was also augmented by a new agreement to increase women’s vocational training in the developing world by one-third by 2030. German Chancellor Angela Merkel highlighted the relationship between gender equality and economic progress in her closing remarks, noting that barriers to women persist everywhere in the world—“not only in the developing countries where a lot of work still needs to be done,” but also “in industrialized countries.” She promised to convene a conference in September to address the “structural differences between men and women” that remain. Research from major international economic institutions supports this focus on gender equality by world leaders. Over the past two decades, analyses from the International Monetary Fund, Organisation for Economic Cooperation and Development, and World Bank have demonstrated the growth potential of increasing women’s labor force participation. The Bank is in the process of revamping its gender strategy, and mainstreaming the discussion of women’s economic empowerment is a core piece of its new concept note. Recent international commitments to advance gender equality are undoubtedly a critical step forward—but the real test of progress for women will lie in their implementation. To ensure gains for women and girls—and for the health of entire communities and economies—such declarations must be coupled with a push to implement the policies they prescribe.
  • China
    This Week in Markets and Democracy: Corruption in China, Mediterranean Migrant Crisis, Child Labor, and Turkish Elections
    This is the third 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. Anticorruption Campaign in China This Thursday, China’s anticorruption campaign reached a new level, sentencing for the first time a former member of the Politburo Standing Committee, the Communist Party of China’s executive body. Zhou Yongkang, also ex-domestic security chief, received a life sentence for accepting $118,000 in bribes and leaking state secrets. Since 2012, over 400,000 high- and low-ranking Chinese officials have been disciplined and over 200,000 prosecuted for graft related infractions. The U.S. Department of State has even agreed to extradite about 150 Chinese officials wanted for corruption. President Xi Jingping has explicitly outlined bribery prohibitions for bureaucrats and required officials and their families to disclose financial assets and income. Anticorruption efforts date back to the founding of the People’s Republic of China in 1949. But, as CFR’s Elizabeth Economy points out, Xi’s campaign is singular; it has been swift and broad reaching. With bribery and influence peddling endemic, Xi’s campaign has the potential to reduce graft. Yet, the reforms are also a means for Xi to consolidate political power. Mediterranean Migration Crisis The European Union (EU) announced this week that it will delay its formal comprehensive response to the Mediterranean migration crisis until the fall. In the last six months, over 100,000 refugees and migrants traversed the Mediterranean to Europe. So far, nearly 2,000 have perished en route (including 1,000 who drown off the coast of Italy in April), and the International Organization for Migration predicts the number could rise to 30,000 by year end. The sticking point seems to be how to redistribute migrants across EU member-states, reducing the disproportionate burden that Mediterranean countries such as Italy and Greece bear. Eastern countries, including Poland and the Czech Republic, argue that they don’t have the state capacity and resources to take in and attend to refugees. France and other more affluent states are concerned that redistribution quotas won’t take into account migrant and refugee populations already living within their borders. With no resolution, naval search and rescue patrols are left to stave off further tragedies. World Day Against Child Labor Today, the International Labor Organization (ILO) marks World Day Against Child Labor with calls for governments to deliver free, quality education for children and to enforce minimum employment age laws. Currently, over 100 million primary and secondary school age children are out of school, and 168 million are child laborers. Excluded partially or wholly from education, child laborers are more likely to face difficult employment prospects later in life, a recent ILO study shows. Previous research has identified household poverty as a primary driver of child labor, compounded by conflict and crisis. As long as poverty and conflict persist, so too will these practices. Turkish Election Results On Sunday, predictions that President Recep Tayyip Erdogan’s Justice and Development Party (AKP) would win Turkey’s parliamentary election, paving the way to constitutional reforms that would concentrate more political power in Erdogan’s hands, failed. Instead, the AKP lost its majority in Parliament, beat by pro-Kurdish and nationalist parties. This loss is particularly notable as it seemed that nothing would stop Erdogan’s bid to consolidate power. For insight into how the electoral upset will play out in Turkey, read Hasib J. Sabbagh Senior Fellow for Middle Eastern Studies Steven Cook’s analysis.