This Week in Markets and Democracy: Violent Kleptocracies, Ethiopia’s Unrest

Fighting the Worst Kleptocracies

Worse than kleptocracies are violent kleptocracies, as defined in a new report by advocacy group The Enough Project. In these, leaders run the state as a predatory criminal enterprise, looting the treasury and using virtually all means of government power—the judicial system, military, and security forces—to intimidate, jail, and eliminate any opposition. With near unquestioned power, this all happens with impunity. South Sudan is a classic example—its leaders making millions off of a brutal civil war they fueled. Existing anticorruption tools and agreements—the OECD Anti-Bribery Convention and the UN Convention Against Corruption among them—do little to change this deadly status quo, according the report. Instead, it says the United States should crack down on these corrupt leaders—taking away their visas, imposing sanctions, seizing ill-gotten assets that come through the U.S. banking system, and using evidence from Foreign Corrupt Practices Act investigations to help go after not only the companies that pay bribes, but the officials who take them.

Ethiopia Opens Economically, Closes Politically

Ethiopia has pushed its way into global supply chains. Touting its low wages and improved infrastructure, it attracted global apparel brands like H&M, Primark, and Tesco, as well as foreign-owned flower farms and a Heineken brewery. European Union countries eager to spur development and stem migrant flows are supporting these efforts, with German Chancellor Angela Merkel visiting this week to promote private investment opportunities. But the government’s darker side—discriminating against the country’s long-marginalized Oromo ethnic group and stealing their farmland—threatens to upend its economic plans. Months of protests that killed up to 500 people led to declaring a state of emergency with internet blockages and curfews, and many persecuted see foreign-owned businesses not as bringing economic development, but instead propping up an authoritarian regime.