Kombinat Aluminijuma Podgorica (KAP), an aluminum plant headquartered in Podgorica, Montenegro. Photo via. Reuters.
Over the past decade, there has been a proliferation of capital moving from a number of authoritarian countries into emerging democracies. While in some cases this might represent wholly legitimate investment, often authoritarian governments are specifically seeking to direct the flow of these funds to achieve purposes other than purely economic. At CIPE, we define this issue as “corrosive capital” – equity, debt, and aid that both takes advantage of, and exacerbates weak governance in emerging democracies, to the further detriment of democratic and market development. Corrosive capital can distort policymakers’ incentives and decision-making, privileging the political influence of authoritarian governments over local citizens’ voices.
Protesters at the March for Europe protest on July the 2nd, 2016 in London.
The outpouring of anti-globalist sentiments from both right and left in many western democracies is teaching those of us who support a global economic architecture many valuable lessons on how we should look toward reforming our international institutions of trade and finance. The rise of nationalism and populism in western democracies is a reaction to the perceived loss of sovereignty and economic exclusion that many ordinary citizens have felt as a result of the growth of transnational institutions, be they the European Union, the World Trade Organization, or more focused initiatives such as the Trans-Pacific Partnership.
In reaction, citizens have been reclaiming their desire for sovereign power through exercising their democratic franchise at national polls, especially in the Euro-Atlantic family. Whether a backlash to Brussel’s Euro-bureaucracy through Brexit and the rise of populism in Central Europe or the increasing influence of anti-globalization politics within both U.S. political parties, we need to recognize that these assertions of political will are legitimate forms of grievance. While we may be disheartened by the message at times, we must at least take heart that these grievances play themselves out in a democratic process (albeit one that seems increasingly under fire). In essence, citizens are using their local ballot boxes to push back at international institutions that they otherwise feel powerless to influence.
Left: Guest Stone Conroy, with hosts Jenny Anderson and Julie Johnson
On this week’s Democracy that Delivers podcast, Senior Manager for Strategic Partnerships at the Alliance for Peacebuilding Stone Conroy discusses the processes and vehicles that organizations can use to resolve conflict. He also discusses the need to engage a wide range of players in these efforts including businesses, non-profits, governments, the media, military, academia, and others. Conroy also talks about the drivers behind conflict, and identifies “a sense of injustice” as one of the most powerful forces for dissatisfaction that can lead to violence.
Conroy describes situations in both Nigeria and Northern Ireland where business and business associations were the key to building peace and conflict resolution. He talks about the convening power of business associations and how they can gather a wide range of stakeholders to address a conflict situation. Lastly, he discusses a new, cutting-edge Alliance project bringing together peacebuilders, spiritual leaders and neuroscientists to look at how the brain can be “rewired” to be more peaceful. Pilot projects are planned for Minneapolis, Chicago, and in Bogota, Colombia.
Learn more about the Alliance for Peacebuilding here and follow Stone on Twitter @Stone_Conroy.
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A CIPE partner in Albania, Center for Economic Research (ACER), recently had a great reason to celebrate: their efforts to have Albania’s tourism VAT decreased had finally been successful. This outcome was the result of and the national tax administration recognized the work of the ACER-supported National Business Forum (NBF), including the recent release of the Forum’s priorities for economic reforms focusing on taxation, informality, and public private dialogue, which included a recommendation to reduce the tourism VAT.
Recipients of the Jose Egardo Campos Collaborative Leadership Awards at the Global Leadership Forum
In today’s world of polarized politics, divisions within societies struggling with the history of divisions feel particularly deep. Countries emerging from conflict, such as Colombia or South Sudan, are striving to make progress toward non-violence and reconciliation. Even in peaceful, mature democracies, the public discourse has become more partisan and polarized than ever. As countries look for transformative leadership to overcome divisions, they struggle with building effective coalitions that could overcome differences and find consensus in key areas.
By Anastasia Baklan
Francis Fukuyama recently visited Kyiv and Lviv on behalf of a joint initiative between Stanford’s Center for Democracy Development and Rule of Law, the Ukrainian Catholic University’s School of Public Management and CIPE, to kick start the Leadership Academy for Development (LAD) to Ukraine. On February 2, 2017, as an addendum to the lessons, more than 250 representatives of the business community, officials from the state authorities and the Verkhovna Rada, and civil society institutions took part in a public forum on building democracy that delivers.
On May 1, 2016, the law, On Introduction of Amendments to Certain Legislative Acts of Ukraine Regarding Protection of Investors’ Rights (No. 289-VIII), came into effect. It introduced a number of new aspects to Ukrainian corporate law including the right to shareholder derivative actions, direct payment of dividends to shareholders, and –perhaps the most relevant to reducing corruption and privatizing state owned enterprises– the establishment of independent directors.