Last week Chinese e-commerce giant Alibaba filed paperwork with the U.S. Securities and Exchange Commission for an initial public offering (IPO). As one of the largest companies in the world’s second largest economy, Alibaba represents an enormous opportunity for investors. They are expected to raise between $15 and $20 billion, making this IPO potentially bigger than Facebook’s.
While Alibaba already handles more sales volume than eBay and Amazon combined, there is added room for growth as internet penetration in China is only around 45 percent. Online shopping is projected to increase at a rate of 27 percent per year as the still-poor country grows richer and more connected.
Regardless of the perceived opportunities, foreign investors are not entirely convinced that Alibaba will be a good buy. The attitude toward Chinese companies in general is one of skepticism and uncertainty — perpetuated most recently by concerns about the transparency in auditing practices. Alibaba’s complex network of businesses and a lack of details surrounding partnerships with domestic logistics companies also raise some questions for potential investors.
In all the buzz surrounding Alibaba’a IPO, however, there is a missing element that could be cause for additional concern. By selling shares in the U.S., Alibaba opens itself to more exposure to the Foreign Corrupt Practices Act (FCPA), a piece of legislation that makes it illegal for companies to bribe officials of foreign governments. A number of multinational companies from around the world have already been ensnared in FCPA investigations as a result of corruption in China and the idea that Alibaba has grown within a market rife with corrupt acts could be cause for increased suspicion. Compounding this risk is the fact that the company has been the subject of investigations by domestic authorities in the past.
By Jasper Wong, honorable mention in the CIPE 2013 Blog Competition. Read the rest of the winning entries here.
In this decade, perhaps the defining story of global significance is the rise of China in the global economy as it displaces Japan to become the world’s second biggest economy. It is no coincidence then that the prevailing view that democracy should go hand-in-hand with development was seriously challenged at the time as China’s economic success overshadowed U.S. culpability in the Global Financial Crisis (some say, Western Financial Crisis), which saw the “largest and sharpest drop in economic activity of the modern era.”
Yet China’s development wasn’t the first to challenge the link between economic and political freedom, as it sits fittingly in the context of East Asia’s developmental trajectory, most exemplified by the phenomenon of the Four Asian Tigers during the 1970s and 1980s. Similarly, the accompanying story to their remarkable growth was the political environment in which growth took place under authoritarian leaders like Park Chung Hee and Lee Kuan Yew.
While South Korea and Taiwan have gained strides in being more democratic, Singapore appears to be stuck in limbo, classified as a “hybrid regime” and ranked at 81st position, well below countries like Indonesia and Malaysia in the latest 2012 Democracy Index published by the EIU.
In global surveys, Singapore has consistently ranked top in governance as its zero-tolerance for corruption, coupled with meritocratic efficiency, are the usual suspects in explanation. Yet ironically, recent times have not bode well for the ruling party of the Singapore government, having just emerged from the latest election with its lowest support ever since independence (60.14 percent of total votes) and facing an increasingly critical electorate.
This article originally appeared on the Thomson Reuters TrustLaw Governance blog.
Thailand lifted its state of emergency, and the February 2 elections have been annulled. Encouragingly, the leaders of the government and the opposition are signaling – albeit tentatively and obliquely – a willingness to negotiate an end to the country’s ongoing political crisis. But even if Thailand can extricate itself from its latest political quagmire, the next crisis is probably not far off if the underlying problems are not addressed.
More than any other issue, corruption has served to delegitimize successive governments in the eyes of competing segments of Thai society. In 2006, the military ousted an elected government and in 2008, the Supreme Court disbanded an elected government; in both cases, the stated justification was corruption. Likewise, allegations of corruption are among the paramount drivers of the anti-government protests taking place in Bangkok today, just as they were in the color-coordinated protests of recent years.
And this frustration with corruption is not limited to corruption in electoral processes or campaign fraud. Corruption is a daily phenomenon for many citizens and businesses, and people are fed up with it.
By Dan Erwin Bagaporo, 2013 CIPE Blog Competition Winner. Read the other winning blogs here.
The Philippines has one of the fastest growing economies in the world, recently registering 6.6 percent GDP growth (second highest in Asia). However, few Filipinos experience its benefits, as 76 percent of this growth went to the richest 40 families in the country. While the government is doing its best to promote “inclusive growth,” 26 percent of Filipinos still live on less than $1 a day. As large companies swallow up wealth, many Filipinos are left out, especially the indigent, young, and elderly, who find securing employment difficult. A few years ago, I witnessed this tragic reality firsthand.
My friends and I went to visit an old retirement home for abandoned senior citizens. We were set to conduct interviews with residents for my friends’ thesis about geriatric loneliness. It turned out, loneliness was the least of their problems. Going around the compound, we saw that it was very ill-maintained. Corridors and rooms were dirty, and pungent. The retirement home was clearly understaffed and lacked necessary funding to maintain an acceptable standard of living for its residents.
After we left, I did some research and discovered that the retirement home has constantly been the recipient of numerous social programs, from food distribution to privately-sponsored Christmas parties. I also found that many other public retirement homes experienced the same situation. My question was: despite all of the largesse, why was the quality of life of residents in these retirement homes still poor? I must admit; it took me a while to answer this question.
In a recent forum held by the Center for Strategic and International Studies (CSIS), Christopher Johnson led an open discussion with Geoff Dyer on Dyer’s new book, The Contest of the Century: The New Era of Competition with China, and How America Can Win. This book, according to CSIS, “gives an inside account of Beijing’s quest for influence and an explanation of how America can come out on top.”
Dyer opened up the conversation with a glaring fact that China’s role in the international realm has evolved tremendously over the past five years — that it began to assume more characteristics of a major global power. What triggered this change, Dyer argues, is related to two major phenomena: the financial crisis in 2008 and the pressure from below (from the citizens).
Participants at a recent Accountapreneurship event in Nepal.
Narayan Adhikari is a CIPE-Atlas Corps Think Tank LINKS Fellow at the Accountability Lab
Two words always come to my mind when talking about accountability: “power” and “holders.” In principle, power comes from the people (the constituency). In a representative democracy, people are the source of power and they hold it by choosing their delegates through elections.
More often than not, however, the officials who get a mandate from the people hold power against the interests of electorate. Consequently, the power dynamic changes alongside the changes in attitudes, behaviors, and interests of the power holders. The cycle then repeats itself. For example; the recent constituent assembly election in Nepal resulted from the failure of the first assembly to promulgate a constitution.
For many Nepalese, democracy is a tool used to subjugate human beings to operate within certain norms, guided by the rule of law and constitutions. It only gives a framework, not an inclusive picture to judge and regulate the behaviors and relationships between individuals as members of a larger society. Democracy without accountability does not achieve equality, but rather degrades morality, integrity, and ethics. Accountability is more than just transparency and anti-corruption. It gives strength to democracy to be a foundation in society and to inspire people to become responsible citizens.
Today, corruption continues to be the biggest challenge worldwide. Corruption distorts development, undermines trust between citizens and government, and produces structural violence. Corruption also carries huge costs. The European Union spends close to 120 million Euros every year fighting corruption. According to World Bank, corruption is one of the largest “industries” with a scale of $3 trillion every year.
Last month more than 1,000 people gathered for the 2014 Nepal Economic Summit,a historic event hat brought attention to the challenges and opportunities to Nepal’s economic development.
More than 30 international speakers participated in the event including government officials, key ministers, business leaders, and civil society representatives. USAID Administrator Rajiv Shah also attended the event and gave some closing remarks.
CIPE partner Samriddhi, the Prosperity Foundation was the knowledge partner of the event and has been working closely with the government and stakeholders in formulating the reform agendas over the last two years, preparing discussion papers on key issues such as agriculture, energy, and tourism, outlining major challenges and making recommendations. The papers build on Samriddhi’s Nepal Economic Growth Agenda, launched in 2012. Samriddhi’s economic research has become an important source of independent policy analysis in Nepal.