• Sub-Saharan Africa
    Nigeria’s Floods and the Jonathan Administration
    Floods resulting from the autumn rainy season have devastated central and southeastern Nigeria. According to Nigerian media, the flooding is the worst in fifty years, and has already killed more than one hundred and displaced more than a million people. The Nigerian media speculates that the particularly heavy rains are associated with global warming–as is the shortage of rainfall, when it occurs, and the advance of the Sahara Desert in the north. In the areas affected by flooding, the displaced are huddled together in camps set up by the state governments. Presumably, outbreaks of infectious disease will start soon if these conditions do not improve. Despite the efforts of Nigeria’s National Emergency Management Agency, the Red Cross and some private organizations, nationally organized relief appears minimal. According to a locally-based NGO in Delta state, in a camp for one thousand five hundred victims, the state authorities have been able to supply only one hundred mattresses, fifty blankets, twenty bags of rice, and a few bags of gari. President Goodluck Jonathan has declared the flooding a "national disaster" and established a National Committee on Flood Relief and Rehabilitation. On October 9, his administration announced it was providing U.S. $110 million in financial assistance. But, in the southern part of the country, there are complaints that the federal government is doing nothing and that the federal relief funds have disappeared. The military, stretched thin by Boko Haram in the north and a resurgence of the kidnapping of expatriates in the Niger Delta oil patch, appears altogether absent. Anger is building at what many see as government ineptness. Yet, the states most affected by the flooding in the south include Jonathan’s core constituency. In the 2011 presidential elections, he won 99 percent of the vote in Delta and Bayelsa states. Jonathan is a native of Bayelsa. His home village is among those that have been evacuated. Knowledgeable Nigerians are telling me that the human tragedy is of far greater magnitude than that resulting from Hurricane Katrina. At the time of Katrina, the Nigerian government donated U.S. $1 million for disaster relief in the American gulf states. This was an important gesture by a developing country. If the Obama administration has not already done so, it should be looking at what the United States can offer to do to mitigate the consequences of Nigeria’s current natural disaster.
  • Sub-Saharan Africa
    Nigeria’s Economic Reforms in Trouble?
    Africa Confidential published on October 5, a clear-eyed analysis of the challenges facing Nigeria’s economic reformers and concludes that those blocking reform “are winning hands down.”  Central Bank Governor Lamido Sanusi states publicly that oil theft is massive and organized. He also questions whether, in fact, the Nigeria National Petroleum Corporation (NNPC) actually knows how much oil is produced–NNPC says 2.7 million barrels a day. The article cites Lagos bankers as saying that the current financial status quo is “not sustainable.” In addition to revenue lost through oil theft, they note the insurgency in the north which has resulted in a security vote of over U.S.$5 billion in the2012 budget, reducing the amount available for health, education and infrastructure. They also argue that the popular “fuel subsidy” has “spiraled out of control”–the backlog owed to oil traders from 2011 could be as much as U.S.$18 billion. The country is also once again falling into debt. The Director General of the Central Bank’s Debt Management Office is quoted as forecasting that Nigeria could own U.S.$25 billion by 2015, with U.S.$16.75 billion to foreign creditors. On the other hand, semi-privatization of the power sector is on track, and the article  states that the electric grid has produced 4,000 megawatts for the past month–“one of the longest periods of semi-continuous power in the southwest for several decades.” It concludes that if President Goodluck Jonathan can fix power generation, “then almost any other sins may be quickly forgiven.” This conclusion strikes me as optimistic. The immediate improvement in power generation affects only one part of the country—the area around Lagos—not elsewhere. The financial issues are mostly short-term; the payoff from a revitalized power industry–if it happens–is longer term. The more existential issue facing Jonathan’s government is how to get through the next year with Boko Haram in the north, oil theft in the Delta, and, possibly, rising unemployment that could result in strikes.
  • Sub-Saharan Africa
    Julius Malema and South African Politics
    The African National Congress’ (ANC) firebrand outcast Julius Malema has been formally charged with money laundering linked to state contracts in his native Limpopo province, probably the poorest in South Africa. Malema, former leader of the ANC’s Youth League, is a radical voice calling for nationalization of the mines and expropriation of white owned land without compensation. Formerly allies, he and South African president Jacob Zuma are now bitter enemies. The ANC expelled Malema from the party and the youth league in November 2011. However, many–perhaps most–of the youth league members still regard him as their leader. (The youth league is traditionally the most radical part of the ANC.) The current wave of industrial unrest in the mines is a political boost for Malema. He was the first politician to visit the Marikana mine during the strike, and subsequently addressed a small number of the South African Defense Force on suspension for rioting. Parts of the ANC appear worried about his influence, and whites in the investor class see him as a boogeyman. In the townships, however, he is a hero. Malema, born only in 1981, has a flamboyant lifestyle characterized by expensive cars, women, and the club scene. Born into poverty, he now has access to nearly limitless resources. The common theory is that his wealth originates in corruption. In politics, his black populism can be reckless; he has been convicted multiple times for hate speech against whites, and has revived the old liberation chant of “kill the settler, kill the Boer.” Undisciplined, he may well self-destruct—if the ANC and South African establishment do not overreact to him. Why is he being charged with corruption now? South African commentary ties the charges to his exploitation of mining unrest to advance his political career. The South African judiciary has a reputation of independence. But the prosecutorial authority is often politicized. Malema’s enemies within the ANC may have calculated that he should be brought to court now before the ANC party convention in December, where Zuma will likely face serious opposition to his continued leadership.
  • Sub-Saharan Africa
    Mugabe Fights the Proposed Zimbabwe Constitution With Homophobia
    Human rights organizations are charging the Zimbabwe police with accelerating harassment of the gay community as the country approaches the election season.  Robert Mugabe is opposed to provisions in the draft constitution that would dilute presidential authority, and is angling to create popular support against the draft before it is submitted to a voters referendum.  Though the current draft makes no reference to gay rights or gay marriage, Mugabe and his supporters may be using that silence on both issues to rally opposition to it by association. Earlier in the year, Mugabe tied the new constitution to gay rights by saying that there were efforts to insert a same-sex marriage clause in the draft. He is quoted as saying, “we won’t accept that.” Human rights organizations’ charges that Mugabe is manipulating homophobia to advance his political agenda are entirely credible. Homophobia is widespread in Zimbabwe as it is elsewhere in sub-Saharan Africa.  In traditional societies, marriage and procreation provide for the care of elders.  As homosexual relationships do not do that, they are seen to threaten wider society. Only South Africa’s constitution protects gay rights, but even there populists sometimes try to rally popular homophobia to advance their political agendas.
  • Sub-Saharan Africa
    Mugabe and Opposition Deadlocked Over New Constitution for Zimbabwe
    In the bloody aftermath of the 2008 elections, the Southern African Development Committee (SADC)  drew up and approved a unity government scenario to move the country forward.  In this scenario, incumbent Zimbabwe African National Political Union-Patriotic Front’s (ZANU-PF) Robert Mugabe continued to serve as president, while opposition Movement for Democratic Change’s (MDC) Morgan Tsvangirai became prime minister.  They also planned to draft a new constitution and submit it to the people for ratification.  Finally a new voters’ role would be established. Only then would national elections be held. That unity government has now all but broken down.  Mugabe, elderly and probably ill, and his supporters want elections sooner rather than later.  There is also deadlock between ZANU-PF on the one hand, and the two opposition parties, MDC and MDC-T, on the other,  over the new constitution. Over the past two years, the Constitution Parliamentary Select Committee (COPAC) drafted a new constitution, which it thought had been approved by the party principles and could be submitted this month to the voters for ratification.  But ZANU-PF’s politburo has insisted on a complete re-write of the draft to preserve the current powers of the presidency and appears to provide other advantages to ZANU-PF.  Many in the Zimbabwean opposition suspect that Mugabe’s goal in pushing for elections sooner is to ensure they are held before the new constitution is adopted; effectively ensuring a ZANU-PF victory. The MDC and MDC-T are asking South African president Jacob Zuma to intervene to break the deadlock over the constitution.  Zuma may have the leverage to break the constitutional impasse, but only if he is willing to pressure Mugabe. In a development that may be related to the Zimbabwe constitutional stalemate, the Zimbabwe finance minister is asking South Africa for a loan, possibly for as much as $U.S. 10 million, though that amount has not been confirmed.  The South African opposition party, the Democratic Alliance (DA), is urging Zuma’s African National Congress (ANC) government not to give Zimbabwe a "blank cheque" but to ring-fence it for specific purposes.  The DA shadow finance minister said he shared the suspicion of Zimbabwean opposition figures that the money could otherwise be used by ZANU-PF in the upcoming election campaign. Zimbabwe does, however, appear to be running out of money.  The Zimbabwean finance minister says there is no money to conduct by-elections in thirty-eight vacant constituencies.  There are also reports that government revenue from diamonds is diverted from the treasury to ZANU-PF and the military.
  • China
    Gu Kailai Trial: Drama Ended?
    The murder trial of Bo Xilai’s wife Gu Kailai ended with a local Chinese court delivering a suspended death sentence for her killing of a British citizen Neil Heywood. While Gu only received a two-year reprieve for the execution, anybody with some knowledge of the operation of the Chinese officialdom knows that this is tantamount to life in prison. Provided “good behavior” during her imprisonment, Gu could be released after serving fewer than a dozen years. Gu was apparently satisfied with the verdict. It is ironic, of course, that she demonstrated no respect for the law by taking another person’s life, but is now praising the court for showing “immense respect for the law, reality and life.” What does the Gu trial tell about the rule of law in China? It would be interesting to compare Gu Kailai’s trial with the trial of the Gang of Four in 1980. On the positive side, Chinese society is becoming increasingly mature. Three decades ago Chinese people just wanted the four radical leaders to be executed as soon as possible and thought the government was too lenient toward the four “evildoers.” By contrast, people today were concerned about whether Gu could receive a fair trial – indeed, supporters of Gu showed up outside the court questioning the trial process. On the negative side, aware that the trial put a spotlight on China’s political and legal systems, the central leaders hoped to use this opportunity to boost the regime’s credibility and to showcase China’s progress in the development of its legal system. But the trial ended up not only laying bare some major legal flaws it also showing the fundamental absence of social capital (i.e., trust in the government) in China. One scholar I recently spoke with noted that the government was unable to produce a good, convincing story out of Gu’s conviction, and “a high school student could tell a lot of contradictions in the details of the trial.” Some Chinese netizens even suspected that the defendant on trial was not Gu herself. Gu’s mental status and Mr. Heywood’s threats to Gu’s son were used to justify a lenient sentence, but none of these “facts” could be verified independently. Furthermore, just as the verdict and sentence of the Gang of Four was a political decision made by top leaders including Deng Xiaoping and Chen Yun (another veteran party leader who allegedly convinced Deng not to execute Mao’s widow Jiang Qing), the suspended death sentence for Gu Kailai was unlikely a decision made by the Hefei Intermediate People’s Court in Anhui Province. It sends a strong signal that a political deal has been struck among the top leaders (who just finished their summer conference in Beidaihe) over Bo Xilai’s political and personal fate. Gu probably got the message. In her statement to the court on August 9, Gu said she would “accept and calmly face any sentence” handed down by the court, which she expected would be a “fair and just court decision.” No matter how dirty the political game behind the Bo-Gu scandal, the Chinese political culture is such that a party leader should not expose any intra-party conflicts and tensions to the outside world. A party leader who violates this rule, like Zhao Ziyang in 1989 Tiananmen protests, could become extremely vulnerable to attacks by political rivals – indeed, one of Zhao’s major “mistakes” was “splitting the Party.” As Bo’s case threatens the legitimacy of the Party to rule, the need to maintain the Party Center’s façade of solidarity and harmony may be so overwhelming that leaders are willing to set aside their difference to unite for a common cause. When the scandal was initially reported in March, my first reaction was, “This is going to be big.” The Gu trial is a climax of the drama, but it also testifies to a setback in China’s rule-of-law building. Obviously, there is something seriously wrong with the Party but chances are that it may still be able to muddle through the crisis and claim business as usual in the upcoming 18th Party Congress.
  • Palestinian Territories
    Chronic Kleptocracy: Corruption Within the Palestinian Political Establishment
    In his testimony before the House Committee on Foreign Affairs Subcommittee on Middle East and South Asia, Elliott Abrams argues that "corruption is an insidious destroyer not only of Palestinian public finance but of faith in the entire political system."
  • Sub-Saharan Africa
    New National Commissioner of the South Africa Police Service—Again
    Last week, President Jacob Zuma appointed Mangwashi Victoria Phiyega as national commissioner of police and conferred on her the rank of general. She has no previous police experience, but she is no neophyte. She has worked in the public sector (Transnet, the transportation umbrella) and in the private sector, where she was group executive for Black Economic Empowerment (BEE) at Absa, one of South Africa’s largest banks. Recently, she chaired a presidential review committee for state-owned enterprises. A social worker by training, Phiyega has degrees from the University of Johannesburg and the University of Wales. She has also studied business administration at the University of Singapore and at the Wharton School at the University of Pennsylvania. Police professional organizations, while affirming their loyalty to her, have objected to Zuma’s appointment of a third non-professional as national commissioner of police. One spokesman for the South African Policing Union characterized the appointment as an "insult" to the police force. The Transvaal Agricultural Union (TAU)—dominated by white farmers—said her appointment was a "political move" by Zuma. Zuma removed Phiyega’s predecessor, Bheki Cele, who was commissioner since 2009, until a board of inquiry found him unfit for service because of contracting irregularities. Cele’s predecessor, Jackie Selebi, had also been removed from office and has since been convicted of corruption. Neither Selebi nor Cele were police professionals, and President Zuma has been accused of "politicizing" the police and intelligence services. Zuma faces a tough fight to retain his party leadership at the governing African National Congress December convention. A major issue in contemporary South African politics is the alleged corruption of his administration. So, like Selebi, Cele had to go. Notwithstanding her lack of specific police experience, Phiyega’s appointment may be popular with the ANC rank-and-file, which has at best an ambiguous view of the police because of corruption and its role enforcing apartheid. On the other hand, South Africa has massive crime problems, with a murder rate that is some six times as high as that of the United States. Under such circumstances, Phiyega’s professional performance will be scrutinized closely by civil and human rights organizations and the South African press.
  • Global
    ICT for Development: Combating Corruption and Increasing Government Accountability
    Podcast
    CFR Senior Fellow Isobel Coleman speaks with Boris Weber, director of ICT4Gov at the World Bank Institute, on how technology is being leveraged to promote good governance and increased transparency in fragile states and emerging markets. This was a meeting of the Civil Society, Markets, and Democracy Roundtable series.
  • China
    China’s Chen Guangcheng
    I had the good fortune this morning to see Chen Guangcheng speak here at the Council on Foreign Relations (and you can watch it here too). Over the course of the hour he answered questions ranging from the nature of his escape from his village of Dongshigu to legal rights in China to what the United States—either through government officials or private business interests—can and should do to help those like him. Through all his (on the record) answers emerged a presence, sense of humor, and thoughtfulness impressive for anyone, and in particular someone that has faced the challenges he has in recent years. There are many differences between the non-democratic Chinese government and the twentieth century authoritarian regimes in Latin America—starting with the fact that in Latin America these governments mostly interrupted longer democratic traditions. Yet many of the challenges Mr. Chen noted for would be democratizers in China are similar to those Latin American activists faced—the lack of individual rights, arbitrary detention, and the backlash against family, friends, neighbors, and even acquaintances of those deemed “troublesome” by the regime. The spread of protests in China, among other topics—ably analyzed by my colleagues on their Asia Unbound blog—are reminiscent of the declining years of military governments in many South American nations. While stirring some echoes of the past, what happens in China matters for Latin America’s future. China is now the number one or two trading partner for many nations, meaning unrest in this pacific giant could have repercussions for the region. It is also part of nearly every important multilateral organization. In this, China’s democratization would be beneficial for the larger global family of democracies, including almost all the nations in the Western Hemisphere. Seeing Mr. Chen, or reading his op-ed in the New York Times, reminds one that individual actions can make a political difference. He ended his remarks answering a question about whether he would see democracy in China in his lifetime. The gist of his answer was surely yes, and probably before that—since at forty years old, he and we all hope he has a long and active life ahead.
  • China
    China’s Little Dutch Boy
    China’s public security apparatus and all its friends in the propaganda and censorship departments must be exhausted—I know that I am exhausted just trying to keep up with them. Within the past month, they have had to figure out what to do about a blind political activist who escaped from illegal house arrest and traveled hundreds of miles to Beijing to take refuge in the American Embassy. They have had to keep an eye on 300 million Chinese micro-bloggers to determine who might have crossed a line here or there as the weibosphere has gone nuts over tales of leadership corruption and Chen Guangcheng’s harrowing journey. And they have had to keep watch over all those pesky foreign journalists who have had the temerity to practice actual journalism. Then, of course, there is the 800 pound gorilla—mapping out a strategy for managing the investigation and subsequent trials of former Politburo member Bo Xilai and his wife, Gu Kailai, who have been charged with “serious disciplinary infractions” and murder respectively. But with all of this effort, what have they really achieved? No doubt those whose job it is to block and stop have a lot of resources at their disposal—chief among them is an internal security budget that exceeds the country’s defense budget. When they tell China’s Internet providers to shut down a micro-blog or two, the servers do it. One popular micro-blogger, whose account was blocked in recent weeks, said in an interview with the South China Morning Post [paywall], “The closure was not carried out by Sina.com voluntarily…but I am not shocked by the decision, given that anything can happen in the country.” Whatever the intention behind closing down his blog, clearly he has not been deterred from speaking out. The security apparatus also helped take care of one foreign journalist, Melissa Chan, by blocking the renewal of her visa; it’s not clear whether this came as a result of her work or the reporting by some of her Al-Jazeera colleagues.  Whatever the case, China pays a stiff price for this kind of behavior. It’s tough to promote your soft power when you don’t let people into your country to write about you. The toughest nut, however, has yet to be cracked: how to be transparent about the extraordinary situation surrounding Bo Xilai and his family, to contain the situation so there isn’t further fallout within the leadership, and to persuade everyone in and outside China that the transition to the next generation is proceeding as planned. So far, the only whisper of a strategy is proclaiming the Bo case a triumph of the rule of law in China and rumors that the Party Congress is going to be delayed by several months. (These rumors, themselves, however, have been proclaimed by Chinese news outlets to be without merit and the work of “overseas hostile elements” with “ulterior motives” who want “publicity.” ) A job maintaining control in China is not for the faint of heart. And it seems that even with all the time, money, and effort they expend to keep the dam from breaking, they are like the little Dutch boy with his finger in the dyke. The pressure behind the Great Wall just keeps mounting. All those people, all their interests, and all their voices just won’t stop coming.
  • China
    A Home Run for Chen Guangcheng, the United States, and China Too…Maybe
    It is still too early to call the outcome of the Chen Guangcheng case a home run, but for now Chen has at least made it to first base. Last week the Chinese activist—a blind, self-taught lawyer known for defending those under threat of forced abortion or forced eviction in particular—escaped from extrajudicial house arrest in Shandong province and fled to the U.S. embassy in Beijing. After six days, on May 1, he left the embassy and was reunited with his family in a Beijing hospital, where he is now receiving medical treatment. Reportedly, once he leaves the hospital, he will be relocated out of Shandong and able to pursue formal studies at a university. In the meantime, Beijing has indicated that it will investigate potential wrongdoing by local Shandong authorities. Chen, the United States, and reform-oriented leaders in Beijing could scarcely have scripted a better ending to the political drama that had become Chen’s life. Chen took a big risk in seeking refuge in the U.S. Embassy. He put his family in jeopardy, cast his future into the very uncertain winds of U.S.-China relations, and faced the threat of being branded a traitor. But Chen also played it smart. He offered Beijing a face-saving way out of the predicament by making clear that he was not choosing the United States over China; he repeatedly reiterated his desire to remain in his homeland. Even more importantly, he played into the notion—however ludicrous—that Beijing somehow did not know of his plight and appealed via video directly to Premier Wen Jiabao to look into his case. It appears as though China’s leaders took Chen’s offer of plausible deniability and ran with it, promising not only safe passage for him and his newly reunified family (he hadn’t seen his son in years) but also a university education and the possibility of seeing his jailors jailed. Nonetheless, no one is celebrating quite yet. Too much uncertainty remains. First, there needs to be an official statement by Beijing confirming the details of the deal, thus far outlined only by U.S. officials. So far, the official news service Xinhua has done little more than publish a demand for an apology from the United States. Second, many of Chen’s friends and associates remain unconvinced by Beijing’s apparent pledges, seeing little hope that the blind lawyer will remain safe over the long run. Third, there have been unconfirmed rumors that Chen left the U.S. Embassy under duress after receiving a phone call from his wife saying that his family would be beaten if he did not leave the embassy. Nothing is straight forward or simple in Beijing these days. Rumors of an investigation into Bo Xilai ally and top public security official Zhou Yongkong are coupled with reports that the website of one of China’s leading economic reformers Mao Yushi has been shut down. Within the broader battle for China’s political future, however, the case of Chen Guangcheng has the potential to give life to the new narrative begun with the downfall of Bo Xilai: that China is indeed beginning to practice the rule of law. Only after the Strategic and Economic Dialogue finishes up and the Americans go home this weekend, however, will we have any real clarity as to whether Chen will be home free.
  • India
    Why So Gloomy, India?
    Over at “India Ink,” the India blog of The New York Times, there’s a terrific interview with Ajay Banga—the CEO of Mastercard and the new chair of the U.S.-India Business Council. It’s a striking presentation at a time when there’s been little but gloom and doom about India in the markets. Why all that gloom? Here are six reasons: First, India’s tumultuous politics have, from a corporate perspective, stalled essential reforms. Tax, pension, and FDI reforms have made little headway under the United Progressive Alliance government, and, as I noted in an earlier blog, parliamentary business has been tied up in knots as the leading national and regional parties squabble. Second, there has been mixed news from the capital markets. Flows of foreign direct investment into India were up in 2011 over the same period in 2010, but Mumbai’s SENSEX stock index was the world’s worst major performer in 2011. And what is more, the rupee has been among Asia’s worst performing currencies amid fiscal problems, including India’s current account deficit, and persistent concerns about capital flows. S&P recently threatened to downgrade India’s credit rating—a threat that India’s finance minister, Pranab Mukherjee, called "a timely warning." Third, India’s proposed retroactive law to tax cross-border deals has met with derision internationally. U.S., British, and Japanese trade groups have threatened to turn away from investing in India as a result. Ajay Banga puts it this way: imposing such a tax retroactively “make[s] companies and business very confused. The ability to make sensible predictions about what happens is very important to any business model.” Fourth, big uncertainties about growth persist. Once high-flying India slowed to 6.1 percent growth year-on-year in the fourth quarter of 2011, the slowest pace since 2008. Fifth, several sectoral stories are ugly (and growing uglier), including power, mining, telecom, oil and gas, insurance, and aviation. Finally, Indian companies continue to dazzle the world, but signs abound that they are skeptical about their own country’s investment climate. Take this ominous set of figures: At the end of 2011, the amount that Indians had invested in businesses overseas over the previous year exceeded the amount foreigners were investing in India. Here’s another point of comparison from the Associated Press: “In 2008, foreigners poured roughly twice as much direct investment into India—$33 billion—as Indians plowed into businesses overseas. By 2010, that had reversed: Indians invested $40 billion abroad—twice as much as foreigners invested in India—a trend that continued [in 2011].” This particular source of gloom matters greatly. With their global ambitions, India’s leading companies now bestride the international stage. They have been responsible for both high- and low-profile mergers and acquisitions in recent years. For instance, the Economic Times notes that “Indian companies (listed and unlisted) announced 1,995 overseas acquisitions from 2000 to April 2012, involving an investment of nearly $116 billion, as per data sourced from Bloomberg.” But corporate India will need to lead the way in India too. Put bluntly, investment is essential to India’s growth story. So is it not ominous to read depressing quotes like this one from Jamshyd Godrej, one of India’s most distinguished business leaders? Godrej told the Associated Press: "If you are an honest businessman in India, it’s very difficult to start up anything … Companies are going to operate where they see the best opportunities and efficiency for their capital." The bottom line? There’s plenty of gloom and doom. And much of it seems to emanate from India itself. But from my perspective, at least, it’s important to temper all the gloom with a sense of recent history: For one, India has consistently surprised on the upside for two decades. It remains a high-growth story. And India has proved that, in one country at least, you can still squeeze out plenty of growth without very much reform. Second, even without aggressive reform, greater predictability might still go a long way. Banga puts this point nicely in his interview with “India Ink.” “Reform is needed,” he says, “and everyone gets it. The problem is politics and its compulsions … [But] who are we to talk about India[‘s] politics, look at U.S. politics. Politics doesn’t always allow reform in the way that corporations would like to see. What we can do is talk about Indian leadership. Recent policies coming out of India have confused investors and not just in the U.S.” Sure, bold reform would be best. But there’s still room for greater predictability, stability, and transparency, even though it’s clear that India’s fractious politics are unlikely to settle down before the next general election in 2014. Third, India’s most exciting stories are in the states, not at the federal level. And the reality is that companies and investors will increasingly have opportunities in business-friendly states that are less regulated from New Delhi and, thus, are less subject to government control. India’s constitution divides jurisdiction between New Delhi and the states in far-reaching and significant ways. The center has power over finance, defense, trade, telecommunications, foreign investment policy, and some infrastructure. But the states have wide authorities too on subjects that matter greatly to India’s investment climate, not least over power, agriculture, land, domestic investment, and policing. States, then, are increasingly masters of their own fate. And strong managers and competent chief ministers have, in some places, delivered striking results. Such improvements are good for growth. Ultimately, they should be good for investment too. And this too is true: good governance turns out to be smart politics. Indeed, while India has seen the highest rates of anti-incumbency of any democratic country in the world, there are now strong signs this trend is slowing. And this is especially true at the state level: governments that have successfully improved governance, for example in Bihar and Orissa, have held on to power.
  • Sub-Saharan Africa
    Nigeria: Ibori Goes to Jail
    Human Rights Watch and Nigeria’s anti-corruption agency are hailing the conviction and jailing of Nigerian “big man” James Ibori. A British court has sentenced the former governor of Delta state to jail for thirteen years for money laundering and associated crimes. Ibori pled guilty to numerous counts. The judge said that if he had fought the case, "he would be looking at twenty-four years but will get a discount for pleading guilty," according to the press. Already in jail in the UK is his wife, his sister, his mistress, and his London solicitor, all convicted of related crimes. Ibori was a particularly squalid representation of big man politics. He and his wife acquired a criminal record while living in the UK before he went into Nigerian politics. It would have disqualified him from office in Nigeria. To hide it, he resorted to a forged birth certificate. He was elected governor of oil-rich Delta state in 1999 and re-elected in 2003 in polls that reflected the rigging too characteristic of Nigerian elections. He became part of the inner circle of the ruling People’s Democratic Party and was a close associate of President Olusegun Obasanjo and President Umaru Yar’Adua. It is hard to know how much Ibori actually stole from the federal and state governments. According to the press, a British police inspector estimates that Ibori stole $250 million. His guilty pleas involved more than $79 million. Such was Ibori’s political clout that EFCC efforts to prosecute him under Nigerian law went aground. One judge in Delta state threw out all one hundred and seventy charges brought against him by the EFCC. But the EFCC charges never did go away entirely, and after his gubernatorial term concluded, he no longer enjoyed immunity from criminal prosecution. Eventually he fled to Dubai. The British and Nigerian governments then cooperated in securing Ibori’s extradition to London, where he was tried and convicted. While flying high, Ibori acquired the big man toys. According to the BBC, the British government has confiscated a house in north London valued at 2.2 million British pounds, a mansion in Sandton (in the northern suburbs of Johannesburg) valued at 3.2 million British pounds, a Bentley, and a Maybach that he subsequently shipped to South Africa. Meanwhile, most of the population of Delta state remained desperately poor with collapsing health and educational services, as the press points out. Most hopeful about this episode is the close cooperation between the British and Nigerian authorities in bringing Ibori to justice and the tenacity of the EFCC and the Metropolitan police. Friends of Africa can only hope that Human Rights Watch is right in its assessment that Ibori’s conviction and jailing is a "landmark in the global fight against corruption," and that it is a harbinger of similar efforts in the future.
  • China
    China’s Leadership Shift in Disarray
    Politician Bo Xilai’s sudden fall from grace unmasks long-discussed corruption within the political ranks and undermines a smooth leadership transition for the Communist Party, says CFR’s Elizabeth Economy.