This Week in Markets and Democracy: Egypt’s Backsliding, UK Transparency Setbacks, New Global Rankings

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.

UK Territories Like Their Secrecy

UK Prime Minister David Cameron’s campaign against corruption faces challenges at home. British overseas territories, including the Isle of Man, Bermuda, and the British Virgin Islands, have refused to comply with new legal requirements for UK companies to publicly register the names of their owners (those who hold significant shares or voting rights). After months of negotiation, some acquiesced only to compiling names privately. While many companies use these offshore havens to lower their tax bills—by some estimates the Cayman Islands are home to twice as many companies as people—the anonymity and lax oversight also enable corruption and money laundering. The standoff may undermine Cameron’s high-profile anticorruption summit later this year, and his efforts to convince other G20 countries to take up his long-running transparency agenda.

New Reports on Human Rights, Democracy, and Corruption

Three new reports show mixed progress on human rights, democracy, and corruption globally:

• Surveying more than ninety countries, Human Rights Watch’s 2016 World Report warns that migration and terrorism fears are leading Western democracies to curtail rights. In authoritarian states, the report documents growing civil society repression in countries including Turkey, Russia, China, Burundi, and Venezuela, as governments block NGO funding, pass restrictive “security” laws, and silence media.
• Freedom House’s 2016 Freedom in the World report highlights similar trends in Europe and the United States, labeling them “democracies in distress,” and finds commodity-dependent countries in the Middle East, North Africa, and Eurasia cracking down on dissent. The report measures freedom across the world in decline for the tenth consecutive year, rating fifty countries “not free” and fifty-nine “partly free” out of the 195 assessed.
• Transparency International’s 2015 Corruption Perceptions Index, which rates countries from zero (very corrupt) to one-hundred (very clean), provides better news. Sixty-three countries improved their scores, fifty-two declined, and fifty remained the same. Brazil saw the biggest fall—from forty-three to thirty-eight. Yet its tumble reflects the investigations, arrests, and convictions of dozens of bureaucrats, prominent politicians, and business leaders; events that in the longer term strengthen the nation’s rule of law.