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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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Wars and Conflict
Prosecuting Sexual Violence Offenders after Conflict
Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is by Sigrid von Wendel, who edits the Development Channel. Rebuilding a country after conflict is a task that takes years, if not decades. War and genocide can displace millions, reduce cities to rubble, suffocate economies, and leave countless civilians and soldiers dead or injured. These challenges are well known, and governments and aid organizations have long grappled with how to handle the refugee crises, financial shocks, medical emergencies, and infrastructural damage that result from war. But there is another equally important (and less widely discussed) crisis that must be addressed in post-conflict rebuilding: sexual violence. In the 1994 Rwandan genocide, sexual violence, particularly against members of the Tutsi ethnic group, was widespread. Over the course of one hundred days, between 250,000 and 500,000 women and girls were subject to acts of sexual violence including rape; gang rape; rape with objects such as arrows, sharpened sticks, and gun barrels; and sexual mutilation. Rape by HIV+ men was also used as a weapon of genocide and, as a result, more than 67 percent of women who were raped during the genocide became infected with HIV and AIDS. In November 1994, the UN Security Council established the International Criminal Tribunal for Rwanda (ICTR) to prosecute those responsible for the atrocities. Since then, the ICTR has established important international precedent for prosecution of sexual violence in conflict, and for the care of victims and witnesses of sexual violence. The Tribunal’s successes, and lessons learned from its failures, have advanced a comprehensive global strategy for bringing perpetrators of sexual violence to justice. New developments in international law, however, could undo some of this progress. The ICTR and its sister court – the International Criminal Tribunal for the former Yugoslavia (ICTY) --have recently made rulings based on a higher burden of proof: the accused individual must be proven to have not just aided and abetted, but “specifically directed” the crime. The appropriate standard of proof for convicting war criminals has long been debated within the international community, and for good reason. After 9/11, some U.S. military and intelligence officials began to fear that international courts could undermine national security by targeting military and intelligence officials and limiting U.S. military operations. This “lawfare,” some argue, can enable militarily weak opponents to use law as a weapon of war against superior military powers. While some argue that making the law less open-ended will prevent wrongful conviction, the new standard goes too far and instead threatens to undermine cases against actual war criminals who might not have “specifically directed” a crime, but are still responsible. As Kenneth Roth, executive director of Human Rights Watch, has argued, “Officials who want to facilitate mass atrocities are rarely so dumb as to give explicit orders. Rather, they tend to proceed by indirection, giving aid to a criminal enterprise that is already in motion.” The “specifically directed” criteria has already let some war criminals off the hook: last year in Rwanda, prominent ministers previously sentenced to thirty years in prison for committing acts of sexual violence had their convictions overturned. The ICTY’s acquittal of Croatian and Serb military leaders last year sparked additional outrage and resistance to the new criteria. Prosecutors reportedly fear that the standard threatens their cases “to the point where a conviction has become nearly impossible” and sets “legal precedents that will protect military commanders in the future.” The work of the ICTY and the ICTR is far from finished. Even decades later, many perpetrators of sexual violence remain free or have been freed recently by changing court doctrine. It is not just Rwanda, the Balkans, and other post-conflict areas that are affected by these failings. Bringing sexual violence criminals to justice sends a strong message to would-be perpetrators around the world that their crimes are unacceptable and, if committed will be met with the full force of international law. Recent rejections of the “specific direction” standard bode well: the Special Court for Sierra Leone upheld a guilty verdict against Charles Taylor in 2012; and last January, an ICTY appeal bench upheld guilty sentences for four Serbian senior officials, further rejecting the new standard. It is crucial that global powers, including the United States, work to bolster the court’s ability to convict perpetrators of sexual violence. National and global security, stability, and prosperity are strengthened, not threatened, by a strong mechanism that brings war criminals to justice.
Gender
Fragile States, Fragile Lives: Child Marriage Amid Disaster and Conflict
Drivers of child marriage, such as weakened institutions, lack of economic opportunity, and increased occurrence of sexual violence and assault, are exacerbated during armed conflict and natural disaster. In my latest Council on Foreign Relations publication, “Fragile States, Fragile Lives: Child Marriage Amid Disaster and Conflict,” I explore the relationship between child marriage prevalence rates and fragile states. Existing data and an abundance of qualitative evidence point to a relationship: countries with high rates of child marriage tend to be among the world’s least stable. Nine of the ten countries with the highest rates of child marriage appear on the OECD list of fragile states. Three of the top ten countries on the Fund For Peace’s Failed States Index have child marriage rates well over 50 percent. And nine of the bottom eleven countries on UNDP’s Human Development Index have child marriage rates greater than 40 percent. Families frequently turn to child marriage as a way to protect their daughters from the social upheaval and gender-based violence that disproportionately affects girls and women during conflict and natural disaster. As I discuss in “Fragile States, Fragile Lives,” women and girls make up 70 percent of the world’s internally displaced population, and more than half of the 200 million individuals affected each year by natural disasters. During fragile times, girls become targets of gender-based violence, most notably sexual assault. Worldwide, nearly 30 million children living in countries with ongoing conflict experience violence or abuse before age eighteen.  In the case of Syria alone, more than half of the estimated 2.8 million Syrian refugees are under the age of eighteen, and sexual violence in Syria has been documented as a weapon of war. Rape might also be contributing to an increase in child marriage in Syria. Armed conflict and natural disaster aggravate child marriage as parents look to alleviate the economic burden and fear caused by instability. In Niger, Bangladesh, Somalia, and Uganda, the practice has been used as a survival strategy during times of drought and food insecurity. In addition, families in Liberia and Sierra Leone have reportedly turned to child marriage due to economic destitution and violence in refugee camps. Insecurity also impairs a country’s education system, which particularly limits educational opportunities for girls: parents often keep their daughters home from school to ensure their security.  But hindering education further contributes to both early marriage and to increased poverty. The high rate of child marriage in fragile states is the result of an intricate web of safety risks, societal traditions, educational disruption, and limited economic opportunity. While existing research points to a connection between high child marriage rates and fragile states, there is a data gap around the degree to which the two are correlated. My paper suggests that closing the data gap would not only protect the youngest and most at-risk members of communities in crisis, but would also lead to more targeted interventions and humanitarian responses aimed at girls and women during and following natural disasters and armed conflict. The paper also offers steps that the U.S. government, multilateral organizations, and relief agencies can take to eradicate child marriage in fragile states. To protect the world’s girls, preserve their childhoods and education, and tallow them to fully contribute to their communities, these actors should:               Collect reliable, consistent, and comprehensive data, disaggregated by gender and age, to provide a detailed understanding of the needs and risks of those affected by disaster and conflict, including refugees and internally displaced people.                     Elevate the issue of child marriage in U.S. diplomacy and in interactions with multilateral organizations and international NGOs to ensure that the health, educational, and economic needs of girls are not forgotten during periods of disaster and conflict.                     Immediately integrate the unique needs of girls into post-disaster and post-conflict planning.       For more on this topic, read the full report: “Fragile States, Fragile Lives: Child Marriage Amid Disaster and Conflict.” A version of this blog post was originally posted on Girls Not Brides.
Europe and Eurasia
The Role of Government in Agriculture
Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is by Evan Axelrad, a recent graduate of the Master of Public Policy program at University of California Berkeley and former program specialist with the U.S. Department of Agriculture’s Foreign Agriculture Service. He has also consulted with organizations including the International Fund for Agricultural Development and Kiva Microfunds. In his 1913 inaugural address, U.S. President Woodrow Wilson vowed to improve “agricultural activities never yet given the efficiency of great business undertakings…or afforded the facilities of credit best suited to their practical needs.” Three years later, he passed the Farm Loan Act, establishing an extensive farm credit system that transformed U.S. agriculture. Today, developing countries are facing the same credit constraints and productivity problems that the United States and other advanced economies overcame in decades past. New research published by the Initiative for Smallholder Finance draws lessons from the history of agricultural finance systems in Germany, the United States, and South Korea that can inform the evolution of agricultural finance systems in developing markets today. The research finds that finance systems most effectively meet the agricultural sector’s needs when governments design policies that supplement instead of replace credit provided by private institutions. In the absence of private institutions, informal moneylenders, who can charge untenably high interest rates, typically hold the majority of farm debt. But governments in Germany, the United States, and South Korea have successfully created inroads for viable commercial lenders by passing regulations that prevent usury and waging campaigns to boost agricultural productivity and increase rural populations’ familiarity with formal financial services. Still, disproportionate government involvement can limit commercial lenders’ presence, potentially stunting markets and leading to problematic over-reliance on state support. For example, in South Korea, decades of extensive government credit subsidies led to the near-absence of commercial banks in rural areas, limiting the longer term competitiveness of the country’s agricultural sector. While government-subsidized credit may be an appropriate tool for supporting early agricultural finance systems, subsidized loans are most effective when they are part of larger policy packages that improve agriculture’s profitability. In Germany, the United States, and South Korea, government agricultural agencies have coupled credit with services that promote farm modernization and increased use of productive inputs such as fertilizer. The Initiative for Smallholder Finance’s research also reveals a potential positive feedback loop between credit provision and increased farm size: in the three case studies, farm size grew as the agricultural finance system developed. Between 1910 and 1970, the average size of farms in the United States expanded from 138 to 390 acres, and average German farm size rose from roughly 7.5 acres in the 1850s to almost twenty-five acres in 1960. While credit provision is only one of numerous context-specific factors that drive structural change in agriculture, it seems to contribute to an increase in average farm size over time. Though larger farms benefit from economies of scale in agricultural production, smallholders make important contributions to food security and often play a critical role as environmental and cultural stewards.In addition, more than two billion of the world’s poorest citizens live in households that depend on agriculture for their livelihoods and improving access to finance for the 450 million smallholder farmers worldwide represents an important opportunity to alleviate global poverty.  Therefore, when developing agricultural finance systems, policymakers may need to install social and environmental safeguards to preserve smallholders’ livelihoods and guide the sustainable development of larger agricultural markets. Governments and other actors should appreciate smallholders’ unique social and economic contributions and craft policies to ensure that agricultural finance development benefits rather than marginalizes them.
  • Asia
    How Kerry’s Election Deal Can Help Afghan Women
    The deal that Secretary of State John Kerry recently brokered to recount votes in Afghanistan’s disputed presidential election demonstrates the United States still has a stake in the future of the war-torn country. The Kerry deal has helped ease the political crisis in Afghanistan by persuading the two rival presidential candidates, Ashraf Ghani and Abdullah Abdullah, to agree to a full recount of votes cast in the June 2014 runoff election, which was marred by allegations of widespread fraud. UN and international observers, along with observers from each campaign, will preside over the recount. The winner will then form a national consensus government, with the loser taking a position similar to chief executive and ultimately becoming prime minister if the relevant constitutional change is adopted. Incumbent President Hamid Karzai has agreed to retain his position until the new government is formed. Just as Kerry has helped Afghanistan move beyond its electoral impasse, he should also ensure that the new government supports Afghan women and girls as well. Women are an emerging force in Afghanistan, with female turnout in the presidential runoff estimated at 37.6 percent. As discussed in my recent report, improving the status of women and girls is important for Afghanistan’s security, stability, and development. Investing in girls’ education and women’s economic opportunities enhances development outcomes for women, families, and communities, and correlates with reduced rates of conflict and violence. Afghans themselves overwhelmingly support greater educational opportunities for women and girls. Even as Washington reduces its direct role and adjusts its leverage in the country, it should still establish policies that cement and extend the fragile gains Afghan women and girls have made since 2001. As Kerry has said, “investing in Afghan women is the surest way to guarantee that Afghanistan will sustain the gains of the last decade and never again become a safe haven for international terrorists.” Here are five steps Kerry should take to realize this goal: 1) Designate the special representative for Afghanistan and Pakistan as a co-chair for the State Department-led Afghan Gender Task Force in order to strength and coordinate Washington’s commitment to Afghan women and girls. 2) Finalize and implement the Bilateral Security Agreement, which would allow U.S. forces to remain in Afghanistan past 2014 and is a key component to ensuring security for women and girls. 3) Bolster the integration of women into peace and security efforts by: doubling National Defense Authorization Act funding in 2015 to support the integration of women into the Afghan National Security Forces; support greater participation of women in any peace efforts; coordinate international donors to support Afghanistan’s implementation of a National Action Plan (NAP) on Women, Peace, and Security; and develop a bilateral NAP with Afghanistan. 4) Reverse the downward trend in USAID funding for girls’ education, as education in Afghanistan’s best economic development policy. 5) Support development strategies that enhance women’s leadership, not only through USAID’s Promote program aimed at urban women, but also by extending and funding programs the World Bank’s National Solidarity Program (NSP), which reaches rural women and requires that they be permitted to participate in decision-making for NSP community development council block grants. This has allowed women to develop and manage their own programs, challenging misconceptions about women’s capacity to lead.  However, the NSP is set to end in September 2015 and facing a financing gap. Both presidential candidates in Afghanistan have expressed support of women’s rights. Abdullah has argued that women should be integrated into the police force and that “no country can achieve security, peace and advance without ensuring the rights of the half of the society.” Ghani has also called upon women to actively participate in both the economy and politics, “from the villages up to the presidential palace.” Ghani supports steps to combat gender discrimination; increase the number of women in the judiciary; boost girls’ enrollment in higher education; and include women’s perspectives in peace talks with the Taliban. Moreover, while working at the World Bank, Ghani was one of the visionaries behind the NSP. Regardless of which candidate wins the recount, the United States should strongly support their efforts to advance the rights, opportunities, and security of Afghanistan’s women and girls.
  • Wars and Conflict
    The Status of Women and Girls in Iraq and Afghanistan
    This post is by Catherine Powell, fellow for CFR’s Women and Foreign Policy Program; and Amelia Wolf, research associate for CFR’s Center for Preventive Action and International Institutions and Global Governance Program. The recent increase in attacks by the self-proclaimed Islamic State (IS)—known until recently as the Islamic State of Iraq and Syria (ISIS)—and the group’s claims to territory in northern Iraq have spurred observers to draw comparisons between the current crisis in Iraq and the Taliban insurgency in Afghanistan. In Iraq, the IS has begun to impose Sharia law in areas under its control, forcing boys and girls to be separated at school, requiring women to wear the niqab in public, and banning music. There have been reports that the IS has forced women to marry or have sex with militants, ordered families to hand over their daughters, and distributed leaflets promoting the rape of women. In addition, a Saudi-based cleric recently issued a fatwa allowing militants to rape women in towns claimed by the group. All this has caused fear and concern that the drawdown of U.S. troops in Afghanistan by the end of 2016 will result in a similar unraveling and a revival of extremism in the country—which would undermine the primary intent of a decade of U.S. intervention. Whether or not the crisis in Iraq compares directly to Afghanistan—given the historical, cultural, geographic, ethnic, and political differences between the two countries—it certainly provides a cautionary tale for U.S. policy toward Afghanistan. In particular, just as gender equality is threatened by the rise of IS in Iraq, the gains made by Afghan women and girls over the course of the U.S. presence in the country would be greatly imperiled by a resurgence of the Taliban if the Afghan National Security Forces (ANSF) are not strong enough to step in as U.S. troops withdraw. Prior to the overthrow of the Taliban, women and girls were banned from schools; segregated in many aspects of public life, including the workplace; and prevented from leaving their homes without a male guardian. In 2001, virtually no girls were enrolled in school, and women rarely participated in the formal economy and or held leadership positions. Now, more than ten years later, women have made great strides in education, health, political participation, economic empowerment, and social engagement. Approximately 40 percent of children enrolled in schools are girls and maternal mortality has fallen from 1,600 to 327 deaths per 100,000 births. Additionally, women hold three out of twenty-five cabinet seats and 120 judicial positions. Backsliding on this progress would undermine security, stability, and development, as gender equality and stability are correlated. Even if U.S. troops stay in Afghanistan beyond President Barack Obama’s December 2016 deadline for complete withdrawal, U.S. public opinion and funding for an ongoing U.S. military presence much beyond that date is unlikely to change, given the other potential demands on the U.S. military and constraints on resources. Obama’s recent announcement that U.S. military involvement will come to an end before he leaves office reflects this political reality as well as his desire for a legacy of pulling the United States out of two wars and refocusing U.S. counterterrorism efforts on new fronts in the Middle East and North Africa. While policymakers and media have focused on the continued presence of U.S. troops, severe cuts to U.S. funding of the ANSF are in the works and pose a great threat to the rights of women and girls going forward. U.S. policymakers should utilize the leverage they currently have in Afghanistan to strengthen the ANSF’s own ability to prevent the country from a fate similar to that of Iraq. The 2003 U.S. invasion of Iraq was a fool’s errand from the beginning–particularly since a focus on Afghanistan instead would have better served U.S. interests in the region. However, once the United States toppled Saddam Hussein, it had a responsibility to assist the country with an orderly transition to a society in which human rights and security are guaranteed. Part of the current problem in Iraq is the fact that the United States withdrew before adequately training Iraqi forces. To avoid a similar erosion of security and backtracking on gender equality in Afghanistan, Washington should follow the recommendations outlined in a recent CFR report, Women and Girls in the Afghanistan Transition: Support the ANSF’s ability to maintain security and enhance the environment for the participation of women and girls in public life. Double funding to support women’s integration into the ANSF. Invest in women’s rights and leadership–including in rural areas–as this will support sustainable development for the country as a whole. Maintain and expand girls’ education in Afghanistan. In comparing the Afghanistan and Iraq, it is important to remember the crucial differences between the two countries. For example, gains made by women and girls since 2001 have been widely supported by a majority of Afghans, including men. This has not been the case is Iraq. In addition, sectarian divisions that lie at the heart of the resurging violence in Iraq do not exist to the same extent in Afghanistan. Lastly, while Iraqi Prime Minister Nouri al-Maliki refused to an agreement for a U.S. residual force in Iraq, the runoff candidates in Afghanistan—Abdullah Abdullah and Ashraf Ghani Ahmadzai—have both agreed to sign the bilateral security agreement to ensure a U.S. presence in the country. A security agreement is essential to ongoing cooperation between the two countries to achieve shared policy goals, including promoting the participation of women and girls in public life.