Insight and Analysis

Amidst the global pageantry and energy surrounding the World Cup, darker allegations lurk. Specifically, suspicions are swirling of institutional corruption within football’s governing body, FIFA, and of labor violations in Qatar, which was selected to be the host of the 2022 games. The allegedly endemic corruption within the governing body of the world’s most popular sport is concerning to fans, and should concern supporters of human rights given the violations of labor rights that have occurred already in Qatar and which are likely to continue.

While there are allegations of corruption regarding FIFA’s selection of the 2018 World Cup (to be held in Russia) as well, the voting process behind the Qatar decision seems to have led to the most concrete evidence of corruption. To begin with, the choice of Qatar to host the Cup flabbergasted anyone who follows soccer – the nation has never fielded a team in the Cup, there wasn’t a single stadium in the whole country, and temperatures average more than 105 degrees in June and July. 

Since 2010, multiple allegations of corruption have surfaced, which could explain FIFA’s peculiar decision.

Read more ...

Colombia’s recent presidential election pitted current President Juan Manuel Santos against Oscar Ivan Zuluaga, who was backed by former president Alvaro Uribe Velez. Zuluaga’s candidacy represented a split between Santos and Uribe, his former mentor and boss. Although Santos was Uribe’s hand-picked successor the first time he ran for President, during his presidency Uribe became an increasingly vocal critic of Santos’ policies, in particular the peace negotiations with the left-wing FARC guerrilla group. 

Uribe waged an aggressive campaign against Santos, often standing in for Zuluaga during the campaign and tweeting extensively, lending his significant popularity to the cause. All the same, Santos won the presidential runoff on June 15^th with nearly 51 percent, with Zuluaga taking 45 percent.  The election was viewed as free and fair by international observers and Zuluaga conceded immediately once the votes were counted; however, former President Uribe continues to insist that the vote was fraudulent and corrupt, which means that the political drama will continue as long as both Santos and Uribe are in government. 

There are major philosophical differences between a Santos presidency and one backed by Uribe, especially with regards to peace talks and relations with Venezuela.

Read more ...

The global recovery has hit several unforeseen bumps – particularly the crisis in Ukraine and the unusually long, cold winter in the US – but the world’s growth is expected to be back on track for the second half of 2014 and the coming years.

That is the conclusion of the The World Bank’s flagship report on the state of the global economy, known as the Global Economic Prospects. Released twice yearly, it also includes three year forecasts covering the projected macroeconomic performance of each of the world’s regions.

It shouldn’t be surprising for global observers that overall GDP projections for 2014 have fallen on a raft of negative developments. The Bank has reduced the year’s growth outlook to 2.8 percent, versus its more optimistic January expectation of 3.2 percent. Yet this is largely blamed on what the report labels “idiosyncratic” factors, especially in the US, where “abnormally cold weather curtailed investment and exports, while firms cut back on inventories” during the first quarter.

Yet the Bank also argues that, after years of substandard and halting expansion, it is the world’s developed economies that will lead the way towards faster growth.

Read more ...

Last Friday saw the 49^th annual meetings of the African Development Bank (AfDB) come to a close in Kigali, Rwanda. The Bank, which turns 50 later this year, held the five-day gathering under the banner “The Next 50 Years: The Africa We Want,” focusing on long-term efforts to meet its goal of reducing poverty by promoting investment across the continent. The more than 3,000 delegates in attendance discussed the challenges facing the AfDB’s 54 regional member countries and steps that should be taken to help Africa meet its potential.

Rwanda was a fitting venue for the events, as the host country marks the twentieth anniversary of the genocide in which an estimated 800,000 Tutsis and moderate Hutus were killed in the span of just 100 days. Although its government is not without its critics, Rwanda has emerged from the devastation of the genocide as a leading example of resilience and economic potential, posting strong economic growth numbers in recent years and rolling out numerous home-grown reforms.

AfDB President Donald Kaberuka, who before taking the helm of the Bank served eight years as Rwanda’s Finance Minister, urged delegates in remarks Thursday to draw on the Rwandan example and “look to their culture, their history, the nature of the crisis they face and come up with their own solutions.”

Read more ...

It has been a wild month of elections around the world. Historic polling, with dramatic geopolitical implications, took place from India, the world’s largest democracy, to Colombia, where controversy over a still tenuous peace process grips the political elite. Then there was Ukraine, where national elections last Sunday capped months of political chaos, Russian territorial incursion, and a disturbing slide into armed civil conflict.

Amidst it all, elections to the European Parliament, the legislative body of the supra-national European Union government, might have seemed like an obscure exercise in bureaucratic turnover. Indeed, to many commentators and everyday Europeans, the elections seemed to be dwindling in importance: voter turnout for these contests has steadily diminished since the first election in 1979. In the last election, in 2009, only 43 percent of Europe participated, with voting among young adults down to 29 percent.

Yet far from being ignored, the results of last week’s elections have sent shock and panic through mainstream pro-EU political parties across Europe.

Read more ...

When the president of Uruguay, Jose Mujica, visited Washington DC in May, his presence generated more attention than usual for the head of state of a small, geographically remote country. This included a private bilateral meeting with President Obama, in the Oval Office, as well as a high profile speaking engagement at American University’s School of International Service.

A major part of the interest in President Mujica – who prefers to go by his nickname, “Pepe” – is his eccentric persona. He is infamous around the world for his austere lifestyle, preferring his small country house to a presidential palace and his Volkswagen Beetle to an armed motorcade.

But also on display during President Mujica’s visit was the willingness to pursue controversial or even unpopular policies that has defined his administration, and which makes Uruguay an interesting outlier in the region. Since taking power in 2010, President Mujica has pushed through measures to allow for gay marriage and create a legalization framework for cannabis, moves that would be unthinkable in most of Latin America.

More recently, President Mujica has taken on another issue that has become something of a third rail in international politics: the asylum of prisoners being housed in the United States’ Guantanamo Bay facility in Cuba. President Obama took office swearing to close the prison, due to the problematically extra-judicial nature of its role in the war on terror, but major obstacles presented themselves almost immediately. Not least of these was the US Congress, which blocked efforts to move detainees – who have not been convicted and who have been cleared for release – to the mainland United States.

The US government has thus struggled to find homes for the 154 prisoners that remain in custody, especially since many of them cannot be returned to their own countries due to security concerns. It is a particularly difficult group of six men that Uruguay has offered to take in – four Syrian nationals, a Palestinian, and a Tunisian.

As with many other policies championed by President Mujica, the Uruguayan public is largely skeptical. A public opinion poll showed that only 23 percent of citizens approved of the transfer, compared with almost 50 percent opposed.

Why, then, is the Uruguayan government going out on a limb to accept them? Certainly a part of it comes down to President Mujica’s own stubborn attachment to his principles, an admirable trait that he has demonstrated on a number of occasions. And his personal opinion on the Guantanamo detention center is clear: “It’s a disgrace,” he said recently, “I’m doing this [taking in the prisoners] for humanity.”

It is not an unprecedented stance for Uruguay. The country has a history of asylum-giving, taking in refugees from neighboring Argentina’s “dirty war” of the 1970s and 1980s, as well as a number of previous Guantanamo inmates in 1999.

But as many analysts point out, the move is also in keeping with Uruguay’s strategic approach to international affairs, in which it has long sought to compensate for its small size by forging close working ties with the US. Sandwiched between two major regional powers, Argentina and Brazil, a succession of Uruguayan leaders have worked hard to develop strong relationships with the US, expanding trade and collaborating on bilateral priorities.

Thus Uruguay fills a unique role, as one of the region’s most leftist governments, but also one of the most pro-US. It also enjoys strong, democratic institutions that don’t face the threat of personalistic populism that troubles Venezuela, Argentina, and others in the region.

In their Oval Office meeting, President Obama made the warm relationship with Uruguay very clear, arguing that “President Mujica personally has extraordinary credibility when it comes to issues of democracy and human rights, given his strong values and personal history, and is a leader on these issues throughout the hemisphere.” He additionally pointed out the expanding trade portfolio between the countries, and Uruguay’s contribution to UN peacekeeping missions in Haiti and elsewhere.

As his term nears its end – Uruguay will hold elections for a new president in October – President Mujica has increasingly styled himself as something of an elder statesman, interested in taking a more removed and philosophical view of the major issues confronting Latin America and the world. In his talk at American University, he opined on topics as diverse as the nature of democracy, the ongoing evolution of humanity, and the need to treat drug abuse and addiction from a medical, rather than a criminal, standpoint. In the Oval Office meeting, he spent almost as much time decrying the evils of tobacco as highlighting bilateral diplomacy.

He finished those remarks with a nod to his affection for the US and his love for rural culture. “I am getting old, and to be old means you don’t want to leave home,” he said. “I would like to be a little bit younger to see the Mississippi, visit the ranches, Los Angeles, the milk farms, and other things.” With his term ending soon, he may yet have the chance.

From May 19^th-20^th, lead negotiators for twelve nations met in Singapore to continue negotiating the Trans-Pacific Partnership (TPP).  The TPP would create a mostly-free trade zone between twelve nations which together account for 40 percent of total global output. It would include Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, the United States, Vietnam and Singapore. Of these countries the US has existing Free Trade Agreements with Australia, Canada, Chile, Mexico, Peru and Singapore. 

Should the countries reach a deal, it is expected to vastly increase trade and exports between these nations to the tune of $123 billion a year. These increased exports should then create positive ripple effects within the nations’ economies, most importantly for the US, job creation because exporting industries should be able to expand their workforces, and creating new export markets for small businesses. 

It is particularly important for small businesses which want to export because tariffs are greater barriers to entry for them then they are for larger companies, which are capable of establishing subsidiaries abroad. Or, as Brookings Institution Fellow Joshua Meltzer testified before the House Small Business Committee, 94 percent of SMEs in the US are importers and exporters and consequently trade agreements which reduce trade barriers should “disproportionately benefit” them. 

The TPP entails detailed agreements on both eliminating (most) taxes and tariffs and on reducing the costs of exchanging services between these countries. Reducing the costs of services is a new component in trade negotiations and is viewed as critical in today’s increasingly service-oriented global economy, this would, for example, reduce the costs of shipping within and between these nation’s for firms from the other countries. 

Additionally, the TPP is supposed to go beyond the WTO in providing for intellectual property protection, foreign investment protection, and environmental and labor regulation. The increased intellectual property protection appeals to innovative firms, particularly to those in technology, and to large pharmaceutical companies, which has created concerns that lower-priced generic medications will become unavailable in certain countries.  

Politically, the deal is also viewed as a means towards solidifying existing trade relations and continuing US influence in the Pacific in the face of an increasingly-powerful China, and is an integral part of President Obama’s trade policy. Regardless of the political and economic reasons in favor of the TPP, an agreement still appears distant, even though negotiations have been ongoing for four years, because a plethora of issues exist within the individual nations which are slowing the negotiations. 

The TPP is viewed as an integral part of President Obama’s trade policy; however, other nations are concerned that the deal will fail to pass Congress even if it has executive support. The Obama administration is pressuring Congress for Trade Promotion Authority (TPA), which would allow the deal to either pass or fail in the Senate without any further negotiations and alterations from the legislative branch.  Although the administration can continue negotiating the agreement without TPA, having TPA would be seen as a vote of confidence from the Congress and could encourage other nations to move negotiations.  Conversely, some, like former acting US Trade Representative Demetrios Marantis, think that reaching a conclusion to the TPP talks could encourage the Senate to approve the agreement. 

The two nations viewed as both critical for the negotiations, and as those slowing them down, are Japan and the US. The recent Ministerial Meeting began with a meeting between the lead US negotiator, US Trade Representative Michael Froman, and Japanese Economy Minister Akira Amari, and last April President Obama went to Japan and the TPP was one of the main topics of discussion between him and Prime Minister Shinzo Abe.  Although both countries have said that they believe that the talks are moving forward, little progress seems to have been made. 

In the recent round of talks Japan signaled that they are willing to reduce tariffs on imported beef and pork; Japanese agricultural tariffs have been a sticking point for the US because of the powerful US agriculture lobby which wants to export more, and this was viewed as signaling a greater willingness to negotiate. Other issue areas are related to pharmaceutical IP and the automobile industry. 

The greater Japanese willingness to negotiate is seen as progress; Virginia Foote, President and CEO of Bay Global Strategies in Hanoi (and Blue Star Strategies Network Partner), has been watching the situation closely, and regarding the recent round she notes that, “there remain many questions about the US TPA process and timing and about the US-Japan market access discussions, but nevertheless there is good momentum coming out of Singapore for moving forward and narrowing down the outstanding issues."   

Considering the potential benefits which could be derived from the TPP, particularly the increase in jobs and assistance for SME’s, one can hope that the progress made in Singapore continues into the next round of negotiations in July and that the nation’s are open-minded flexible.

India’s voters are in the midst of the massive, month long process of choosing their next government, via nationwide elections to the Lok Sabha, the lower house of parliament. This election has drawn particular international attention – beyond the inherent importance of the political workings of the world’s largest democracy. A slowing economy, popular frustration with the apparent corruption and incompetence of the ruling Congress Party, worry over the simmering feud with Pakistan, and fears over domestic Hindu-Muslim ethnic tensions have thrown the stakes of the election into high relief.

In play are all 543 elected parliamentary seats, and the race is on to be the first party or bloc to reach the 272 seats necessary to form a government. To the Western press, at least, the chaos of this giant election has been framed as a contest between two men: Rahul Gandhi, the would-be successor of current Congress Party Prime Minister Manmohan Singh, and Narendra Modi, of the right wing, Hindu nationalist-affiliated Bharatiya Janata Party (BJP).

Modi, the current governor of the state of Gujarat in the country’s northwest, appears to be a clear favorite, riding a wave of dissatisfaction as India’s growth has fallen by half, to 5 percent.

Read more ...

President Barack Obama will be in Tokyo beginning April 23^th for a much anticipated state visit with his counterpart, Prime Minister Shinzo Abe. In a world of increased tensions, from Crimea to the East China Sea, a number of critical topics will be on the agenda. Yet the most pressing topic at hand is likely to be the future of the sweeping Trans-Pacific Partnership (TPP), which has been caught in something of a stalemate since Japan’s entrance into the negotiations in 2013.

The visit comes as the first stop in President Obama’s swing through Japan, South Korea, Malaysia, and the Philippines, and is being closely watched for its implications for the state of the US-Japan alliance. That relationship has been strained in the past year over Japan’s territorial disputes with China, Prime Minister Abe’s visit to a controversial wartime shrine, and what the US has seen as Tokyo’s lackluster response to Russian aggression in Ukraine.

Indeed, President Obama’s arrival will mark the first state visit by a sitting US president since Bill Clinton in 1996, and the trip has been designated an official state visit, replete with dinner with the Emperor and accompanying pomp and ceremony.

Apart from disagreements over geopolitical and territorial issues, the US and Japan are facing major obstacles to trade negotiations, which must be surmounted if the TPP is to become a reality in the near future.

Read more ...

In 2003, African governments committed to dedicating 10 percent of their national budgets to agriculture in the Maputo Declaration on Agriculture and Food Security in Africa at the African Union. The nations were convinced that with this investment they could achieve 6 percent agricultural growth per year, which would lead, in turn, to a host of positive results including increased food security, a reduction in food imports, and lower unemployment. 

Agricultural spending has grown 7 percent on average throughout the continent since then. But only 13 African nations – Burundi, Burkina Faso, the Democratic Republic of Congo, Ethiopia, Ghana, Guinea, Madagascar, Malawi, Mali, Niger, Senegal, Zambia and Zimbabwe – have reached the 10 percent goal in even one given year, and none have reached it every year.

An estimated 70 percent of Sub-Saharan Africans make their living from agriculture. Many of them engage in subsistence agriculture, which does not create enough capital to expand their operations or even support their families. Thus, deeper public investment would be designed to push these farmers past the subsistence level.

Given the importance of agriculture to the continent, the African Union (AU) has declared 2014 the “Year of Agriculture and Food Security.”

Read more ...