• China
    Where Are All the Women in China’s Anticorruption Campaign?
    Rachel Brown is a research associate in Asia Studies at the Council on Foreign Relations. A glance through ChinaFile’s recently released visualization of individuals investigated in China’s ongoing anticorruption campaign to “swat flies and hunt tigers” makes one thing clear: the only place where tigresses are rarer than in a Siberian reserve is in the ranks of Chinese officialdom. Among the 1,462 officials whose cases were announced by the Chinese government, only sixty-nine are women. Of those women, only three are considered “tigers,” those who have at least a deputy ministerial or deputy provincial-level rank; women make up just over 2 percent of the “tigers” brought down by corruption. The first female “tiger” investigated in the anticorruption campaign was Bai Yun, the head of the United Front Work Department in Shanxi province and a member of the provincial standing committee. The Central Commission for Discipline Inspection (CCDI) announced her investigation in August 2014 and she was expelled from the Chinese Communist Party (CCP) in February 2015. Bai began her career in the military, worked in the Communist Youth League, and later served as party secretary of various cities in Shanxi. During one of these posts she was associated with a bribery case involving a property developer. The second female tiger and only female general accused in the anticorruption campaign was Major General Gao Xiaoyan, who served as the deputy commissar of the People’s Liberation Army (PLA) Information Engineering University. Authorities detained her in late November 2014, likely over bribes linked to construction projects at the 309th Hospital of the PLA, where she served as party secretary for seven years. Most recently, Lü Xiwen, the deputy party secretary of the Beijing Party Committee and director of Beijing’s Communist Party School, was expelled from the CCP in January 2016 after a two-month investigation. The CCDI’s charges against her included accusations that she “improperly discussed major policies of the central Party” and “resisted organizational oversight” among other infractions. Of the three women, she is the highest ranking to have been investigated. Even among lower-ranking officials, women still form a sliver of those accused of corruption. Why have so few women been investigated and punished in the anticorruption campaign? Two lines of argument could offer an explanation. First, since women remain sparse in the senior levels of Chinese government, they may simply have fewer opportunities to take bribes or engage in corruption. Second, even when presented with the same opportunities for corruption, women may be less prone to act on them. The paucity of women in the Chinese government’s upper echelons supports the first argument. Contrary to Chairman Mao’s maxim that “women hold up half the sky,” one Chinese blogger wrote, “In politics, the amount of sky held up by women is only about one half of one half of one half of one half...of one half.” In the current CCP Politburo, there are two women out of twenty-five and ten women rank among the 205 members the 18th Central Committee of the CCP, which assumed office in 2012. The highest-ranking woman now in the Chinese government is Vice Premier Liu Yandong, whose portfolio includes, culture, sports, science, and education. A woman has never been part of China’s most elite governing body, the Politburo Standing Committee. In the lower and middle levels of government, women appear more frequently, particularly in urban areas. This is partially attributable to gender-based quotas for certain positions. Even in this context, however, the share of women taken down in the anticorruption campaign is low, a mere 4.72 percent of the total. In contrast, women make up 23.4 percent and 18.4 percent, respectively, of the National People’s Congress and the Chinese People’s Political Consultative Conference, China’s two top representative bodies. One explanation for such a gap is that once in government, women often occupy positions where opportunities to take large bribes rarely appear. For instance, female officials are relatively scarce in departments dealing with topics such as national or local taxes, public security, and industry and commerce. Others argue that women are simply less susceptible to graft. A long-standing case for increasing female representation in government is that this reduces overall levels of corruption. Indeed, Transparency International’s Global Corruption Barometer documents that women are less likely than men to engage in or approve of bribery. Explanations for this phenomenon include women’s higher aversion to risk and the fact that some corruption operates primarily through male-dominated networks. Political and cultural context also affects women’s stance on and engagement in graft. A 2013 paper by Justin Esarey of Rice University and Gina Chirillo of the National Democratic Institute sheds light on female attitudes toward corruption in an autocratic system such as China’s. Using data from the World Values Survey on differences in men and women’s disapproval of corruption and scores for a nation’s level of autocracy or democracy, the authors “find strong evidence that a gender gap in corruption attitudes and behaviors is present in democracies but that it is weaker or nonexistent in autocracies.” They theorize that in democracies, where leaders can be ousted if voters discover unappealing behavior, women feel more pressure to uphold values like clean governance. In autocratic systems, however, there is a lower potential for external punishment if graft is discovered, and bribery and corruption may be accepted as inherent parts of doing business. While in China there are now severe external consequences for this behavior, nonetheless Esarey and Chirillo’s findings suggest that the relative infrequency of women removed for corruption in China may relate more to differences in opportunity than differences in attitudes. Women’s patterns of corruption in China also differ somewhat from those of their male counterparts. Since much of the anticorruption campaign operates through CCP procedures rather than through the traditional legal system, the scope of transgressions also includes moral infractions such as adultery and spending on mistresses. Such violations of party discipline occur more often among men. One male official was accused of siphoning funds to support forty-six mistresses, while another was fired after the diary of one of his mistresses went viral. One official from the Supreme People’s Procuratorate noted, “Males have power and want sex, so they use their power to trade for sex. Females use sex to gain power, and then use their power for corruption.” Meanwhile, multiple female officials have been brought down because of “beautification corruption” according to a 2014 article in the Beijing News. Twelve cases of this type were investigated by the Beijing municipal government in 2012. Cao Shujie, the former deputy director of the Human Resources and Social Security Office, spent 130,000 RMB of public funds on cosmetic procedures, conference fees, and author fees, earning her a sentence of ten years on corruption charges. Similarly, the former bureau chief of the Anshan city office of the State Administration of Taxation spent five million RMB on plastic surgery in Hong Kong with hopes that her new look would lead to further promotions and wealth. The women taken down in the anticorruption campaign have committed a range of infractions, and these infractions relate more often to traditional bribery than to embezzlement for beauty services. No matter the type of corruption, however, the numbers don’t lie. Female officials appear less prone to corruption. Perhaps increasing female representation in government is another instrument that Chinese leaders should consider adding to their anticorruption toolbox.
  • Americas
    The Political Salience of Latin Americans’ Perceptions of Corruption
    Once a year, policymakers and the press are forcibly reminded of the terrible costs of corruption. This year, it fell on January 27, when Transparency International’s Corruption Perceptions Index (CPI) was released, inciting the ritual gnashing of teeth and beating of chests about relative national corruption gains and losses. This is precisely the sort of attention that Transparency International hopes to draw to corruption. In this sense, the report is very much a continued success. But the CPI’s utility as a policy tool is less clear-cut, not least because there are so many reasons a country might rise or fall, including revelations of previously hidden corruption or simply the movement of other countries, which then push their peers up or down in relative terms. Transparency International routinely acknowledges these issues, and actively encourages readers not to use the measure as a longitudinal indicator. But this advice usually falls on the deaf ears of headline-seeking editors. The CPI remains a blunt tool, which doesn’t provide us much guidance on how and why public perceptions of corruption are changing, or broader lessons about what works in the fight for accountability. Nonetheless, there are a few important takeaways from the report that are especially relevant to Latin America. First, grand political corruption is ubiquitous and no country is immune. Shannon O’Neil pointed last year to the potentially significant political implications of the wave of corruption scandals that have beset Latin America over the past two years. These scandals have erupted at all levels of the CPI: in countries among the highest ranked (Chile, ranked 23rd of 167 positions), at the middle of the pack (Brazil and Mexico, 76th and 95th), and near the bottom (Honduras and Guatemala, 112th and 123rd). Second, if there is one policy recommendation that emerges from recent Latin American experience, it is that increasing checks and balances, granting true autonomy to watchdog agencies, and building budgetary and human resource capacities, all contribute to better control of corruption. Conversely, countries such as Venezuela in which these checks and balances have been eroded for political reasons suffer unintended consequences, including worsening corruption outcomes. Robust democracy, in other words, has some collateral accountability benefits. In the short term, improving capacity may lead to gains in corruption perceptions. One of the most improved countries in the CPI is Honduras, which rose fourteen spots, in part because of massive public protests last year that led a scandal-weakened government to acquiesce to the creation of an independent international panel of judges and prosecutors to investigate corruption: the OAS-sponsored Support Mission Against Corruption and Impunity (MACCIH), modelled on Guatemala’s UN-backed International Commission Against Impunity (CICIG). Despite its shortcomings, including fears that MACCIH may merely serve as a smokescreen to protect the president against removal, it is hoped that MACCIH will be strong enough to provide investigatory credibility in an institutional environment marked by a politically-dominated judiciary. Yet even in countries that are moving in the right direction and developing the autonomous capacity of their institutions, the perverse consequence may be the uncovering of major corruption, and a tumble in the CPI, as InsightCrime noted. Guatemala, where last year’s corruption scandal culminated in the forced resignation of President Otto Pérez Molina, declined eight spots. Brazil, where prosecutors have filed more than 1,000 charges, recovered more than a half-billion dollars, and convicted eighty for corruption associated with state-owned Petrobras, has fallen by seven spots. Let me close by floating two suspicions about the extent to which corruption will be relevant to Latin American politics in coming years. First, declining economic fortunes are likely to be accompanied by increasing revelations of corruption that was underway during the boom times. Bad economic times mean turnover in governments, closer scrutiny of past incumbents’ accounts, and an energetic scramble for tax revenue, including through tighter oversight. Able politicians may seek to deflect attention from current economic woes by pointing a finger of blame at corrupt predecessors who wasted the bonanza of the commodity boom. If the first suspicion is correct, the second follows: impunity is likely to be one of the next big political shibboleths in the region. Latin American countries have historically been a paradise for corruption; as Steve Morris noted with regard to Mexico, impunity has long been corruption’s evil twin. Impunity makes corruption much less risky and much more lucrative. A recent estimate suggests that only 3 percent of Argentina’s corruption cases since 1980 have led to convictions, and judges took on average fourteen years to reach final sentences in these cases. Of course, these dismal results are only the tip of the iceberg, since they refer only to those cases that actually saw the light of day. And it seems unlikely that Argentina is an outlier with regard to judicial ineffectiveness, although data on corruption prosecutions and trials is weak around the region. All of this suggests that for all its faults, the CPI release will continue to be closely watched throughout Latin America in years to come.
  • Wars and Conflict
    Nigeria’s 2016 Budget Continues Use of Secretive ‘Security Votes’
    In a post originally published on African Arguments, CFR International Affairs Fellow Matthew Page explains that despite President Muhammadu Buhari’s anticorruption progress, the government’s new budget includes allocations for opaque funds that often go missing. Under President Muhammadu Buhari, the fight against corruption in Nigeria has unquestionably turned a corner. Shortly after taking office in May, he vowed to “plug revenue leakages,” made sweeping changes in the notoriously corrupt Nigerian National Petroleum Corporation (NNPC), and took steps to tighten control over public spending. He gave the Economic and Financial Crimes Commission (EFCC) free rein to pursue former officials, several of whom have been arrested. However, despite these advances, Buhari’s 2016 budget raises awkward questions. According to official details just released by the Nigerian government’s Budget Office, the 2016 budget contains over thirty so-called “security votes.” In theory, security votes are catch-all line items inserted in the budget to give recipients the flexibility to cover ad hoc security expenditures. But in practice, they are opaque slush funds that officials have long used to embezzle state funds or redirect them for political purposes. Security votes are distinct from the type of extra-budgetary defense spending that may have been misdirected or stolen by the previous government, but they resemble them insofar as they are spent with scant legislative oversight or outside scrutiny. In light of his record and rhetoric, Buhari’s decision to use security votes raises doubts about whether his anticorruption strategy is comprehensive enough to put Nigeria back on track. Thinly-Veiled Theft A relic of military rule, security votes were used to siphon public funds during Nigeria’s Second Republic from 1979 to 1983. In fact, when the military overthrew the government and Buhari became a military head of state in 1983, he arrested former officials and investigated fellow military officers for embezzling security funds. Max Siollun suggests that these actions contributed to Ibrahim Babangida’s decision to topple Buhari in 1985. And under Babangida and later Sani Abacha, the use of security votes as a tool for self-enrichment was perfected and institutionalized. Following Nigeria’s 1999 return to civilian rule, soldiers-turned-civilian officials such as President Olusegun Obasanjo and former National Security Adviser Aliyu Mohammed Gusau ensured that security votes survived. Although it makes sense that a few select military and intelligence expenditures should remain classified even in a democracy, the widespread use of security votes by federal, state, and even local officials is anathema to norms of transparency and accountability. Yet top politicians have long turned a blind eye to the practice or even attempted to excuse it. As one now-opposition party heavyweight recently griped: “Why are we probing security votes now? You see, security votes to my understanding can be used for native doctors, it can be used to hire Alphas [soothsayers] and it can be used for churches to pray for the country. It can be used for even sponsoring things.” View the full post on African Arguments.
  • Pakistan
    Tough Choices in Afghanistan
    Robert M. Hathaway is a public policy fellow at the Woodrow Wilson Center in Washington, DC, where he is writing a book on leverage in foreign policy. Previously, he was director of the Wilson Center’s Asia program for sixteen years. Prior to joining the Wilson Center, he served for twelve years on the professional staff of the Foreign Affairs Committee of the U.S. House of Representatives, focusing on South and East Asia. More than fourteen years after routing the Taliban, and seven years after President Barack Obama, pledging to wind up the war, entered the White House, the United States faces another turning point in the seemingly endless conflict in Afghanistan. The Washington Post reported last week that current and former officials are quietly pointing to South Korea, where 28,500 U.S. troops remain sixty-three years after the end of the Korean war, as a model for the future American presence in Afghanistan. The military situation in Afghanistan is tenuous and by some measures deteriorating. The optimism raised nineteen months ago by the election of President Ashraf Ghani is slipping away. It seems clear that Obama’s earlier hopes for ending the war on his watch will not be met. Yet simply standing pat until a new U.S. president takes office next January seems unattractive, irresponsible, and dangerous. Before making new commitments in Afghanistan that will inevitably bind the hands of his successor, Obama must provide persuasive answers to a handful of questions, including the following: What can we hope to accomplish with a few thousand troops for a few more years that we and our coalition partners were unable to accomplish with up to 140,000 troops deployed over a far longer period? Is it within our power to build the Afghan army and police into an effective force capable of providing security for most of the populated areas of Afghanistan? Can U.S. training and other assistance counteract the desertions, defections, and low reenlistment rates that make the Afghan army a revolving door? More broadly, can Afghanistan develop an effective military force absent fundamental reform in Afghan society? Can a culture riddled with corruption and patronage politics, in a country where opium, from which heroin is produced, is the number one cash crop, build a capable army that respects the principle of civilian rule and the rights of the population it is supposed to defend? The Taliban controls more territory today than at any time since 2001. How are the Taliban, in the face of staggering casualties inflicted by the mightiest army in history, able to persevere, and even to seize new territory? How do they continue to draw new recruits to their cause? Has the introduction into Afghanistan of forces fighting under the banner of the self-declared Islamic State changed the nature of the war? If so, what should this mean for American strategy? Does the appearance of the Islamic State in Afghanistan make a negotiated political settlement less likely? Even leaving the Islamic State aside, is such a settlement possible? Are the Taliban prepared to compromise, which after all is the essence of negotiation? And if so, can we have any confidence in their promises? Or are the Taliban so fractured as to make the idea of negotiating with the Taliban meaningless? If a political settlement seems unlikely, what are the alternatives? It is no accident that Pakistan is invariably described as both part of the problem in Afghanistan and part of the solution. What do we need from Pakistan in order to succeed in Afghanistan? Are we in danger once more of building on pipedreams of Pakistani cooperation? Pakistan claims that its army has found religion, so to speak, and is at last serious about weeding out extremism. Even if accurate, does this include Afghan-focused extremism, or only that which targets Pakistan itself? Either way, does Pakistan have the leverage to force the Taliban to negotiate in good faith? What’s the exit strategy? How will we know when we can leave Afghanistan, or at least end an active military presence? What are reasonable benchmarks for success? And what happens if we don’t reach those benchmarks? Suppose the situation in Afghanistan continues to deteriorate. Can the United States afford to be seen, by friend or foe, as uncaring or incapable if Afghanistan slides into chaos? Won’t failure in Afghanistan materially strengthen the forces of violence and extremism around the world? Finally, what do we owe those—Americans, Afghans, other foreign friends and allies—who have died since the United States went into Afghanistan in 2001? A great deal, no doubt, but doubling down will not bring them back to life. Is there a point when placing more lives at risk and expending more treasure no longer honors those who have given their lives? Noticeably missing from these paragraphs, I realize, are any substantive answers to the questions they pose. In part, this reflects my own uncertainties, even after decades of tracking events in Afghanistan. But it also underscores the failure of the administration to provide persuasive answers. These issues deserve to be subjected to fact-based analysis, an approach seldom evident in this election year. To be sure, measured reason is not sufficient; Kennedy’s best and brightest didn’t know what they didn’t know, and we paid a huge price in Vietnam for their ignorance. But if not sufficient, fact-based, illusion-free analysis should provide the base from which we consider these matters. Abandonment of our Afghan friends or expansion of U.S. combat operations are not the only options. We will almost certainly want to continue providing weapons and other equipment to Afghan security forces. Perhaps air support, or additional training, intelligence, and logistical assistance. A strong case can be made for continued economic support for the Ghani government. But before he makes these or other commitments, Obama should be able to answer each of the questions asked above. Some will say that this is setting the bar too high, that it is impossible to foresee all possible contingencies or predict the actions of other actors. The requirements set forth above, they would argue, are an invitation to indecision. But to advance this argument is to assert that momentous decisions should be made on the basis of guesses, gut feelings, and short-term calculations. Is this, after America’s longest war, all the American people expect from their leaders? Shouldn’t we demand the same analytical rigor that goes into a feasibility study for a new water project, or the location of a new shopping mall? Making the right choices won’t be easy. Anyone who assures us that there are simple, painless answers in Afghanistan is either a liar or a fool. We have already had one too many slam-dunks.
  • Sub-Saharan Africa
    South African Icon Disillusioned with Ruling Party Leadership
    On January 24, in London, UK Prime Minister David Cameron honored Nelson Mandela’s three surviving co-defendants at the 1964 Rivonia trial. They were Denis Goldberg, Ahmad Kathrada, and Andrew Mlangeni. Cameron also honored their suriviving defense attorneys, Lord Joel Joffe and George Bizos, who succeeded in avoiding the death penalty for their clients, though not twenty-six years of imprisonment. Goldberg was a member of the military wing of the African National Congress (ANC). At Rivonia, he was convicted of armed resistance to apartheid. Among the ten men convicted at the Rivonia trial, the most famous being Mandela, Goldberg was the only white man. In a January 24 BBC interview, Goldberg publicly called for the current leaders of the governing ANC to be replaced due to widespread corruption. However, he also cited the huge gains South Africa has made since the coming of “non-racial” democracy in 1994, when Nelson Mandela was sworn-in as president, especially with respect to education, health care, economic growth, and the transformation of the civil service. Other liberation icons have made the same point. Progress in democratic, non-racial South Africa is real, but in their view the ruling ANC has lost its way, and its leadership must be replaced. Though Goldberg named no names, for many South Africans President Jacob Zuma and his close associates will immediately come to mind.
  • Sub-Saharan Africa
    Mugabe and Obiang Call for Security Council Reform
    Reform of the United Nations Security Council (UNSC) is a perennial African chestnut. The UNSC is more involved in Africa than in any other region, and many Africans feel it is acutely unjust that none of the permanent members are from the continent. (The permanent members are the victorious powers in World War II: China, France, Russia, United Kingdom, and the United States.) Now, Zimbabwe President Robert Mugabe and Equatorial Guinea President Teodoro Obiang Nguema Mbasogo are weighing-in. At a joint press event marking Obiang’s visit to Harare, Zimbabwe, the two presidents called for Africa to have at least one UNSC permanent member with the right to exercise a veto. Mugabe and Obiang are among the least attractive of Africa’s “presidents for life.” They are rivals for the designation of Africa’s “worst dictator.” Obiang has been chief of state since 1979, Mugabe since 1987. Obiang, whom Freedom House considers “one of the world’s most kleptocratic living autocrats,” has accumulated a personal fortune estimated by Forbes (in 2006) at $600 million, far eclipsing Mugabe, whose net worth is estimated at a paltry (in comparison) $10 million. Security Council reform, with a permanent seat for an African country (or any other for that matter), is not on any realistic agenda, not least because the permanent members are far from a consensus. Among African states, there is no agreement as to which country should get a permanent seat should that ever become a possibility. Nigeria and South Africa both insist that it is the most appropriate candidate. But, the call by Mugabe, the current Chairman of the African Union (AU), and Obiang for Security Council reform may have been intended to burnish somewhat their sordid images before the upcoming AU meeting in Addis Ababa. The 26th AU Summit launches the “African Year of Human Rights.”
  • Americas
    This Week in Markets and Democracy: Corruption in Iran, Africa, and Mexico
    Iran’s Sanction Are Gone, but Not Its Corruption Corruption presents a huge hurdle for Iran. It ranks 136 out of 175 countries in Transparency International’s Corruption Perceptions Index, and 118 of 189 in the World Bank’s Doing Business report. Despite earning $650 billion in oil profits over the last eight years, billions went missing, and little found its way into public goods such as infrastructure. Still, as international sanctions lift, European and Asian companies including Daimler, Airbus, Total, Eni, and Statoil have or are considering ventures. The UK government even published a guide on doing business in Iran, noting the prevalence of customs that violate its Bribery Act. Corruption Undercuts African Defense Spending A new Transparency International report documents widespread vulnerabilities to corruption in African defense spending.  Though risks vary by country, budget opaqueness (40 percent of countries surveyed fail to publish one), and lack of auditing or oversight for defense spending are common themes enabling corruption. A few examples of exploiting these weaknesses: Uganda’s military paid $740 million for six Russian fighter jets worth $327 million and disbursed $324 million in salaries to ghost soldiers over the past twenty years. Egypt classifies its estimated $4.4 billion defense budget as a state secret. A heavy uptick in African military spending exacerbates potential for graft, doubling over the past ten years to $50 billion in 2014. Many African states spend disproportionately on defense relative to Organization for Economic Cooperation and Development (OECD) nations, diverting money away from vitally-needed healthcare and education. Transparency International goes so far to suggest that corruption fuels extremism across the continent–all the more reason to require greater openness and accountability. Taking on Mexico’s Corruption…in Spain Spanish authorities detained Humberto Moreira, former chairman of Mexico’s ruling Institutional Revolutionary Party (PRI), on charges of embezzlement, bribery, and money laundering of €200,000 sent to Spanish bank accounts. The proceeds are allegedly from his time as governor of Coahuila, during which state debt grew from $27 million to $2.8 billion. Mexican investigations against Moreira were quickly dropped, though the United States indicted two of his top officials for money laundering—his former finance secretary pleading guilty. Mexico’s unwillingness or inability to hold public officials accountable contrasts sharply with other Latin American countries, notably Brazil and Guatemala, where arrests of high-level officials reflect growing activism in policing illicit cash flows. Yet Moreira’s arrest shows that even when domestic corruption investigations fail justice may be done, as foreign authorities are increasingly able and willing to step in.
  • Sub-Saharan Africa
    Some Good News From South Africa
    It is unduly gloomy in sunny South Africa. The national currency, the rand, is falling; the economy is hardly growing at all; the Zuma administration appears mired in corruption and mismanagement. There has been an upsurge in racist rhetoric. Hence the South African surprise and delight at the announcement that two of the richest South Africans, Allan and Gill Gray, are essentially giving away their wealth to their family foundation. The Daily Maverick says, “The total value of this endowment is currently unknown, but it will run into billions of rands, and is certainly to be the largest philanthropic foundation established by any South African in history." The gift is seen as a ringing endorsement for the future of a democratic South Africa—and the future of South African business Another Gray foundation already funds hundreds of high school and university scholarships. Gray and his wife have also endowed a Center and a Chair in Values-Based Leadership at the University of Cape Town’s Graduate School of Business. Allan Gray is #1226 on the Forbes 2015 list of world billionaires and #7 in South Africa, with an estimated net worth of 1.4 billion dollars. His investment management firm, Allan Gray Ltd., is the largest privately owned asset manager in South Africa, overseeing 40 billion dollars, according to Forbes. Patrice Motsepe, the richest black person in South Africa with a Forbes net worth of 2.2 billion dollars, in 2013 took the Warren Buffett and Bill Gates pledge to give to charity one half of his wealth. Gray and Motsepe are also reminders of the enormous wealth in South Africa, and its concentration.
  • Brazil
    Five Upsides to Brazil’s Crisis
    Brazil is in the midst of the longest recession of the democratic era that began in 1985. Between 2015 and 2016, the economy will shrink by 7 percent, more than in any other two-year period in the past century. The Economist’s dire cover story this week summarized the sad state of affairs: a downgrade in the country’s debt to junk status, a massive corruption scandal, rising public debt, two-digit inflation, and a rudderless political system, all contributing to “Brazil’s Fall.” Many Brazilian pundits and academics agree on what needs to be fixed. In the short term, to rein in government spending—the nominal deficit now stands at 10 percent of GDP—they call for shrinking government credit subsidies, reforming the social security system, and reducing the overall size of the public sector. In the longer term, these analysts argue for improving competitiveness, boosting innovation, and above all, restoring the industrial sector. Given the depth of the crisis, 2016 was always going to be a painful year. Making it worse is the government’s inability to do much to soften the blow. The December departure of Finance Minister Joaquim Levy, who proved to be less of a fiscal scissorhands than markets hoped, underlined the huge political challenge of fiscal reform. The governing Workers’ Party (PT) has been ambivalent if not just plain opposed to austerity measures. Its fickle allies in the centrist PMDB have been unwilling to take up the burden without a clear sign of government commitment, and the opposition is happy to bleed President Dilma Rousseff dry. Congressional backing for the government has fallen, and the cost of legislative support has risen in inverse proportion to the perceived weakness of the Rousseff administration. The tragic result is that the very reforms that might build the foundation for restoring growth seem unlikely in 2016, or even during the remainder of Rousseff’s second term, which is not scheduled to end for another 1,090 days. If anything, the political climate is likely to worsen in the new year. Although impeachment still seems unlikely, it will continue to dominate Brasília’s attentions when Congress returns to session in February. Whatever bandwidth remains will probably be filled by the Lava Jato and Zelotes investigations, which are increasingly focused on senior political figures. In this climate, neither the government nor Congress will push for legislation that requires super-majorities, such as tax, electoral, pension, or civil service reforms. Public consensus about these themes has not yet coalesced, and some pundits argue that the situation may need to worsen even more before politicians are willing to undertake such unpopular choices. Where are the upsides, then? Even though little legislative action is expected, the economic crisis is forcing state-owned companies, and state and municipal governments, into belt-tightening and innovation of their own. Already some states are rethinking their opposition to public concessions, and state firms are reaching out to the private sector for investment. This may lead to a slow dismantling of the crony capitalism at the heart of the Lava Jato scandal. The lousy economic outlook combined with political crisis has led to a more than 45 percent depreciation in the Real from its strongest point in 2014, an adjustment that—albeit inflationary—will improve industrial competitiveness, and contribute to a correction in the uncompetitive real overvaluation of domestic assets. The much-lauded improvement in the performance of the anti-corruption bureaucracy has been slow in coming but revolutionary in its effects. The innovative use of anti-money laundering statutes by the prosecutors and judge at the heart of Lava Jato is being widely studied throughout the judicial system. Already the scandal has contributed to changes in campaign finance, with the high court ruling corporate electoral contributions unconstitutional, and Lava Jato has given new impetus to a popular initiative spearheaded by prosecutors to further strengthen anti-corruption laws. Rousseff’s desperation may lead to beneficial outside-the-box policy initiatives—perhaps working with Argentina’s Macri to remake Mercosur for the post-Chávez era, taming the burgeoning public sector debt, or even rethinking the long-standing labor code. This may be the only means of improving Rousseff or her party’s standing in the run up to October’s bellwether municipal elections. Finally, as the Economist pointed out, Rousseff can’t afford to lose another finance minister, after replacing two in 2015. This gives Nelson Barbosa considerable power, and may enable him to build support for emergency fiscal measures. While none of these are exactly silver linings, they could, along with the Rio Olympics, bring hope to a beleaguered nation.
  • Sub-Saharan Africa
    Nigeria’s Buhari Moves to Fix Deficiencies in Fight Against Boko Haram
    Nigerian security service abuses have been a driver of recruitment for Boko Haram, the radical, jihadist movement that seeks to destroy the secular state. Abuses have reflected poor leadership, poor training, and lack of resources. Hence, the Buhari administration’s arrests of former President Goodluck Jonathan’s National Security Advisor Sambo Dasuki in December and his Defence Minister Bello Haliru Mohammed on January 5, are particularly significant. Both figures have been charged with looting funds intended for the struggle against Boko Haram. If convicted by a court of law following rigorous and transparent judicial proceedings, that would be evidence that criminality reached the highest levels of the Jonathan administration. It would also help account for the gross under resourcing of the security services in the struggle against Boko Haram. In a positive development little commented upon in the Western media, President Muhammadu Buhari has placed the national police services under the minister of the interior. That minister, retired General Abdulrahman Bello Dambazzau, is one of the strongest members of his cabinet and untouched by allegations of corruption. Born in 1954, Dambazzau was the Chief of Army Staff (COAS) from 2008 to 2010, the highest position in the Nigerian army. He is regarded as an intellectual. His degrees include a BA in Criminal Justice from Kent State University (U.S.) and a Ph.D in Criminology, from the University of Keele (UK). Before Buhari appointed him to be the interior minister, Dambazzau was a senior fellow at the Center for Peace, Democracy, and Development at the University of Massachusetts at Boston. He has extensive experience in security service training. Among other assignments he was the Registrar of the Nigeria Defense Academy. There had been speculation that Buhari would make Dambazzau his national security advisor or his minister of defense. These are high-profile posts. However, as minister of the interior now with oversight of the police, a national service, Dambazzau is well-placed to move forward with the reform of the largest of the security services. The arrests of Dasuki and Bello Haliru Mohammed and the appointment of Dambazzau as minister of the Interior appear to be aspects of a coherent strategy to reduce structural corruption while at the same time institute reforms that could, over time, deprive Boko Haram of its oxygen.
  • Sub-Saharan Africa
    South Africa, a King, and the Rule of Law
    The alarums and excursions over South Africa’s economy and economic policy do not stop. December saw the discreditable episode of President Jacob Zuma’s hiring and firing multiple ministers of finance in only a few days and a drop in the country’s estimated economic growth rate to perhaps 1.2 percent. The new year kicked off with an apparent standoff with the United States over trade that if unresolved would end South Africa’s participation in the benefits of the African Growth and Opportunity Act (AGOA). But, a BBC news item that appeared New Year’s Eve highlights how South Africa’s commitment to the rule of law makes it well-prepared to weather the multiple crises of the moment. A South African traditional ruler, King Buyelekhaya Dalindyebo, reported to prison after his conviction and his appeals failed. The king was found guilty of kidnapping a woman and her six children, burning down their house, and beating four young men because their family members did not present himself before the king’s traditional court. (One of the young men died following his beating.) The king claimed he was innocent, that he was merely “disciplining” his subjects under customary law. The king is one of ten recognized monarchs in South Africa. They play a largely ceremonial role, but many control substantial amounts of tribal lands, and in rural areas often exercise arbitrary power over their often illiterate “subjects.” President Jacob Zuma has cultivated close relations with traditional rulers as part of his African populism. King Dalindyebo also is connected to national icon Nelson Mandela. He and the former president are both from the Thembu clan. Following the king’s trial, conviction, and failed appeals, the justice minister refused his request for a retrial on the basis that there was no legal justification. The king reported for jail after a judge refused to extend his bail. According to the BBC, at the sentencing, the Supreme Court of Appeal said of the king, “His behavior was all the more deplorable because the victims of his reign of terror were the vulnerable rural poor, who were dependent upon him. Our constitution does not countenance such behavior. We are a constitutional democracy in which everyone is accountable and where the most vulnerable are entitled to protection.” The BBC reports that during his protracted legal proceedings, the king left the ruling African National Congress (ANC) and joined the opposition Democratic Alliance (DA). The DA expelled him from the party following the Supreme Court of Appeal’s ruling. It also reports conflicting reports as to whether the tribal elders will replace Buyelekhaya Dalindyebo as king. In light of the earlier trial, conviction, and appeal of paralympian Oscar Pistorius BBC commentator Milton Nkosi rightly sums up the significance of the king episode: “South Africa has once again demonstrated that, despite its leadership problems, it upholds the rule of law, even if it means locking up a king and alienating some of his subjects ahead of crucial local elections next year.”
  • Sub-Saharan Africa
    Nigeria Security Tracker: Weekly Update December 26-January 1
    Below is a visualization and description of some of the most significant incidents of political violence in Nigeria from December 26, 2015 to January 1, 2016. This update also represents violence related to Boko Haram in Cameroon, Chad, and Niger. These incidents will be included in the Nigeria Security Tracker.   Last Week (December 25): Boko Haram killed sixteen and abducted six in Biu, Borno. December 27: Nigerian troops repelled a Boko Haram attack in Maiduguri, Borno, killing ten insurgents. December 28: A bomb at a mosque and two suicide bombers killed a total of fifty-two people in Maiduguri, Borno. Boko Haram is suspected. December 28: Two suicide bombers killed themselves and twenty-eight others in Madagali, Adamawa. Boko Haram is suspected. December 28: Two suicide bombers killed themselves but no others in Bodo, Cameroon.
  • Sub-Saharan Africa
    The South African Roller Coaster
    On December 10, President Jacob Zuma fired Nhlanhla Nene, the well regarded finance minister, and replaced him with the unknown and inexperienced David van Rooven. Though Zuma is not required by the South African constitution to consult with anybody on cabinet appointments, the fact that he did not inform his cabinet or provide public explanation for his removal of Nene and appointment of van Rooven may have been the last straw. South Africa already has been buffeted by the fall in commodity prices, uncharacteristically low growth rates, and fears that the widely anticipated U.S. Federal Reserve’s increase in interest rates will attract investor funds from emerging markets. The Rand, the South African currency, plunged, the Johannesburg Stock exchange indexes swooned, and government borrowing costs jumped. Business commentary was uniformly hostile to Nene’s firing, with dire predictions that the new appointment foreshadowed an end to South Africa’s hitherto prudent macroeconomic policy. The governing African National Congress’s (ANC) two partners, the Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP) were also not informed of the move and criticized it. The general public did not like the move either. In South Africa #ZumaMustFall became the top Twitter hashtag. Four days later, Zuma reversed himself and appointed the highly regarded Pravin Gordham as finance minister, a position he held from 2009 to 2014. The Rand and the stock markets recovered (if not completely). Opposition to the Nene firing from within the ANC is likely the reason for Zuma’s reversal. If Zuma shows little understanding of how a modern economy works (he has almost no formal education), plenty of ANC leaders not only understand it, but are personally invested in it. As has been the case in the past, the South African political economy has once again self-corrected with the appointment of Gordham, who has successfully steered South Africa through its only recession since the coming of “non-racial” democracy in 1994. The South African media is now reporting that Zuma and his political allies within the ANC have been politically wounded. The ANC faces local elections in 2016 and an internal fight in 2017 over Zuma’s successor as ANC leader. The opposition parties, especially the center-right Democratic Alliance and the left-wing Economic Freedom Fighters, are visibly strengthening as public disillusionment with Zuma grows: the South African media reports that 66 percent of the public distrusts the president. At this point, the party leadership race appears to be between Nkosazana Dlamini-Zuma, Zuma’s former wife and his candidate of choice, and Cyril Ramaphosa, an architect of the 1994 “non-racial’ democratic settlement and the candidate of business. The South African media is also speculating that the ANC could remove Zuma as party leader soon. As of December 14, #ZumaMustStillFall had replaced, #ZumaMustFall. Only the ANC can remove its party leader and, in effect, the president. That has happened before; in 2008, the party removed Thabo Mbeki as party leader and forced him to resign the presidency a few months later. As a practical matter, Zuma could be removed by a majority vote of the National Assembly or by a motion of no confidence. The ANC holds 62 percent of the seats in the National Assembly. How ANC members vote would be largely determined by the party’s National Executive Committee (NEC). Zuma has appointed most NEC members to government posts. If Zuma were to fall, many or most of them would lose their jobs and salaries. Hence, at this stage, it is unlikely that the NEC will turn against Zuma. However, this episode has probably weakened the candidacy of Dlamini-Zuma to be his successor as party leader and enhanced the position of Cyril Ramaphosa. Perhaps the significance of the past five days is that once again South Africa’s political system has demonstrated an ability to self-correct within a democratic political framework and an economy largely conducted according to free-market principles.
  • Politics and Government
    Undemocratic Democracies in Rwanda and Central Africa
    This is a guest post by Cheryl Strauss Einhorn, a journalist and adjunct professor at the Columbia Business School. Just this past month, Rwandan President Paul Kagame followed neighboring rulers in Burundi, the Republic of Congo, and Togo to become the latest long-serving African ruler this year to attempt to extend his hold on power for a third term. Like his neighbors Kagame has done it legally, through a change in the nation’s constitutional term limits, but not without coercion. “He’s never pretended to be a democrat,” says Boston University’s Timothy Longman, director of the African Studies Center. “There’s an attempt to respect the rule of law at one level, in contrast to military dictators, he did not seize power; he went through a process of changing power.” But the process was not free and fair. Kagame supporters circulated a petition suggesting a constitutional change and obtained signatures from 60 percent of voters, over 3.5 million people. However, Longman says interviews about the process revealed that “people were going door to door and telling people to sign.” If they didn’t sign, the petitioners recorded their names and addresses. “It was not a free signature,” he says. “The petition tells us nothing about Rwandan public opinion.” The petition, though, was influential. Rwanda’s Supreme Court cleared the way for the constitutional change and then just weeks ago the country’s upper house of parliament voted unanimously to make it so. The result is that the 54-year old Kagame could potentially remain in office until 2034. He’s been in power since 1994, following his Tutsi rebel force’s victory over the interim government at the end of the Hutu led genocide that killed over 800,000 Tutsis. Since then he’s won two consecutive terms with 95 percent of the vote in both elections. But even though Kagame and the leaders of his neighboring countries are not violating their constitutions, the resistance to term limits is symbolic. It shows the continued fragility of African democracy. Third termism like this is a milestone on the road to president for life. Only term limits make it possible to consider voting someone out of office. And only then is it possible to transition power. Kagame is being coy about whether he’ll allow a transition. He says he’s open to being persuaded to run again and wrote on his presidential twitter account that "If I ran again, I would do more of what I am doing to improve the well-being of the citizens of Rwanda." It’s just that record of improved well-being that makes Kagame somewhat different than his peers trying to extend their power. Kagame is largely credited with praise for not only ending the Rwandan genocide but also for rebuilding the nation. The World Bank says between 2001 and 2014, real GDP growth averaged 8 percent per annum, far above the tepid growth of his neighboring countries. Still, Longman says that Rwanda manipulates its economic statistics, that it’s part of Kagame’s propaganda and is not real “because they’ve changed the measures.” And, apart from Burundi, Rwanda remains the poorest country in East Africa, according to the World Bank Development Indicators, with per capita income of $638 comparing negatively with Kenya’s $1,245, Tanzania’s $912, and Uganda’s $657. The United States has warned Kagame that he faces instability and uncertainty if he presses ahead with running for a third term, but it is unlikely that Rwanda will experience the kind of violence that resulted from term limit controversies in Burundi, Congo, and Togo in part because Kagame does not tolerate dissent. Human rights groups accuse Kagame of increasingly repressive measures to curtail civic and political life. Reporters Without Borders, which ranks press freedoms according to criteria including media independence, consistently reports Rwanda as among the most authoritarian, listing it as 161st out of 180 countries surveyed in 2015’s World Press Freedom Index. Two years ago, a journalist received a seventeen-year sentence for charges including “insulting the president” and “inciting the people against the government.” Opposition politicians are not tolerated well either, according to a report that Dr. David Himbara, who spent six years in Kagame’s government promoting economic development as the head of Rwanda’s Development Board, gave to Congress. Himbara fled Rwanda two years ago after becoming concerned about the increasingly violent nature of the Kagame regime. But if a country is a democracy then dissenters should not have to flee, journalists should not be jailed, and the people should get to express their true opinion at the polls. No one is saying democracy is the only form of legitimate government. But, certainly Rwanda and these other countries are not legitimate democracies. These power grabs are effectively coups.
  • Malaysia
    Najib Stays in Power as UMNO Meets
    This past summer, as Malaysian Prime Minister Najib tun Razak faced an explosion of news articles about alleged irregularities in the 1MDB state fund and about the appearance of over $600 million in Najib’s personal bank account, many Malaysian politicians believed that Najib would not survive as prime minister through the end of the year. Former Prime Minister Mahathir Mohamad, still one of the most influential figures in Malaysia, had unleashed a steady stream of online invective at Najib, repeatedly calling on him to resign. U.S., Swiss, Singaporean, and Hong Kong investigators reportedly were looking into 1MDB and/or the transfer of funds to Najib’s account. Malaysia’s own central bank and attorney general reportedly were investigating Najib as well, and other powerful people within the United Malays National Organisation (UMNO), the main component of the ruling coalition, seemed to be gearing up for an effort to unseat Najib. Meanwhile, the opposition alliance was planning a no-confidence vote in Malaysia’s parliament. At street rallies, opposition activists called on Najib to come clean about 1MDB and the funds in his account and to resign. Yet now it is December, time for UMNO’s general meeting, and whatever his international image, Najib’s hold on his party is much stronger than anyone would have imagined six months ago. In all likelihood, no one will emerge at the general meeting as a serious challenger to the prime minister’s position as president of UMNO. Indeed, Najib has consolidated his power within the party in the months before the general meeting; Manjit Bhatia at New Mandala estimates that the anti-Najib faction of UMNO members attending the general meeting accounts for less than 1 percent of the total number of branches of the party. Najib has neutralized opposition in several ways. He has wooed voters. The prime minister has overseen an expansive, populist budget in October that increased state handouts to a range of influential groups. He and his allies have used pro-Malay language to shore up his image with conservative Malays---and to portray some of the opposition to him as led by ethnic minorities. Najib also has mostly neutralized his most influential critics within UMNO, including Mahathir and former Deputy Prime Minister Muhyiddin Yassin. Yassin was sacked as deputy prime minister earlier this year, and Najib has moved to isolate the former deputy’s allies within UMNO. The former deputy prime minister has continued to criticize Najib, but it is unclear whether this criticism has changed the minds of any UMNO cadres, who apparently don’t see any other viable candidates for prime minister or party president. (The actual intra-party elections have been pushed back eighteen months, although a party president could step down even though elections were not imminent.) And the longer Najib remains as prime minister, the more time he has to allegedly utilize the patronage networks that flow downward through UMNO, and that ensure the loyalty of party cadres. To be sure, Najib will be questioned at the UMNO general meeting about 1MDB, how it was managed in the past, and its management today. He may be questioned about his explanations of how the huge sums appeared in his personal accounts, and critics like Mahathir may circulate at the general meeting. But Najib’s fiercest critics may be unable to address the entire general meeting, and UMNO’s internal disciplinary board may even punish party members who criticize Najib. Already, the disciplinary board has removed from office at least two local leaders who criticized Najib and praised Mahathir, according to Channel News Asia. Meanwhile, Najib has much less to worry about from the political opposition than he did six months ago---or surely than he did two years ago, when the opposition nearly won the general election. To be sure, the opposition faces high barriers. Human Rights Watch’s recent report on Malaysia’s climate of free expression notes that the government has used detentions, legislation, and other tactics to criminalize opposition to Najib and reduce the space for political gatherings. But the opposition also has imploded in the past year, after the jailing of coalition leader Anwar Ibrahim and the breakdown of peace between the Islamic opposition party PAS and the mostly ethnic Chinese DAP. No one opposition leader has been able to fill Anwar’s shoes. The reconfigured, new opposition coalition, which contains a splinter group of MPs that broke off from PAS, controls fewer seats in Malaysia’s parliament than the united opposition did after the 2013 elections.