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Drones, defense, and diplomacy: Negotiations and the battlefield in Ukraine

Conflict Defense Technologies Europe & Eurasia Politics & Diplomacy

Russia’s current economic situation is surprisingly similar to Ukraine’s, although almost all trade between Russia and Ukraine has ceased. After two years of around 4 percent economic growth in 2023 and 2024, Russia is expecting growth of merely 1.5 percent this year, while official inflation is 10 percent. Since October 2024, the Central Bank of Russia has maintained an interest rate of 21 percent while complaining about stagflation.

The Russian and Ukrainian economies are both suffering from their extreme focus on the military sector. Including Western support, Ukraine’s military expenditure amounts to about $100 billion a year, which is no less than 50 percent of Ukraine’s GDP, with 30 percent coming from the Ukrainian budget in 2024. Meanwhile, Russia’s 2025 military expenditure is supposed to be $170 billion or 8 percent of GDP. Unlike the Ukrainians, the Russians complain about the scale of military spending. This makes sense. The Ukrainians are fighting an existential war, while Russia’s war is only existential for Putin.

Contrary to common perceptions, Russia does not have an overwhelming advantage over Ukraine in terms of military expenditure or supplies. Russia does spend significantly more than Ukraine, but much of this is in reality stolen by politicians, generals, and Putin’s friends. Furthermore, Western sanctions impede the Russian military’s ability to innovate. In contrast, Ukraine benefits from innovation because its economy is so much freer, with hundreds of startups thriving in areas such as drone production.

Russia is now entering a fiscal crunch. Its federal expenditures in 2024 amounted to 20 percent of GDP and are likely to stay at that level in 2025, of which 41 percent goes to military and security. However, the Kremlin has financed its budget deficit of about 2 percent of GDP with its national welfare fund, which is expected to run out by the end of the current year. As a result, Russia will likely be forced to reduce its public expenditures by one-tenth.

Low oil prices could add considerably to Russia’s mounting economic woes and force a further reduction in the country’s public expenditures. However, Israel’s attack on Iran may now help Putin to stay financially afloat by driving the price of oil higher.

Economically, this is a balanced war of attrition at present. Ukraine’s Western partners have the potential to turn the tables on Russia if they choose to do so. Ukraine has successfully built up a major innovative arms industry. What is missing is not arms but funds. The West needs to double Ukraine’s military budget from today’s annual total of $100 billion to $200 billion. They can do this without using their own funds if they agree to seize approximately $200 billion in frozen Russian assets currently held in Euroclear Bank in Belgium. This could enable Ukraine to outspend Russia and achieve victory through a combination of more firepower, greater technology, and superior morale.

Anders Åslund is the author of “Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy.”

Compounding these internal challenges are external pressures. Turkmenistan relies on the Amu Darya river, which flows along its border with Afghanistan and Uzbekistan, for roughly 90 percent of its water. The construction of Afghanistan’s Qosh Tepa Canal upstream represents a significant new threat. By diverting substantial amounts of water from the Amu Darya for its own agricultural ambitions, the canal project could reduce the flow reaching Turkmenistan, further straining an already stressed system. The absence of robust transboundary water-sharing agreements and effective diplomatic channels risks tensions, highlighting the urgent need for dialogue, potentially facilitated by neutral international mediators, to navigate this issue peacefully.

Overlaying all these factors is the undeniable impact of climate change. Projections indicate that temperatures in Turkmenistan are set to rise faster than the global average, inevitably leading to more frequent and severe droughts, further diminishing already scarce water resources and pushing the nation closer to the brink.

The human and environmental toll

The consequences of this escalating water scarcity are already being felt across Turkmenistan. Food insecurity is on the rise, with reports indicating that 12 percent of the population faces severe challenges in accessing sufficient food—among the highest rate among former Soviet nations. Access to safe drinking water is also becoming increasingly precarious. Residents across the country, including in the capital city of Ashgabat, report frequent water cuts and shortages. The tap water that is available is often of questionable quality, forcing many to rely on more expensive bottled water.

Reduced water flow and dying vegetation leave the soil vulnerable to erosion, intensifying the dust, sand, and salt storms that plague the region. In the northern Dashoguz province, vast tracts of agricultural land are severely affected by salt storms originating from the desiccated Aral Sea, posing significant risks to respiratory health and further degrading farmland. This vicious cycle of soil salinity, exacerbated by inefficient irrigation and poor drainage, diminishes air quality and agricultural productivity. Altogether, this creates an increasingly hostile environment for both people and wildlife.

The economic repercussions are also significant. Turkmenistan’s economy relies on natural gas exports, which constitute nearly 90 percent of its export revenue. However, the natural gas industry itself is water-intensive, requiring substantial amounts for cooling systems, equipment cleaning, and extraction processes. Water scarcity could directly impede the nation’s ability to maintain current natural gas production levels, potentially impacting national revenue and the funding of essential public services.

Furthermore, the unique ecosystems adapted to Turkmenistan’s arid conditions, including the vast Karakum Desert, are under threat. Rivers, wetlands, and oases—vital habitats for diverse flora, fauna, and migratory birds—risk shrinking or disappearing entirely, leading to biodiversity loss and pushing vulnerable species toward extinction.

Finally, the crisis is beginning to drive climate migration. Faced with failing crops, soil degradation, rising food prices, and dwindling agricultural employment (a sector that employs over 40 percent of the workforce), people are increasingly forced to migrate in search of better living conditions, both within the country and abroad. This displacement adds another layer of social and economic strain.

A call to action to maintain regional stability

The water crisis unfolding in Turkmenistan is not merely a domestic issue; its ripples will likely be felt regionally and globally. Declining agricultural output could increase Turkmenistan’s reliance on international food markets, potentially contributing to fluctuations in global food prices. More critically, the potent combination of environmental degradation, economic hardship, and potential social unrest fueled by water scarcity could destabilize the country and, by extension, the wider Central Asian region. History, including the the Syrian uprising, serves as a warning of how severe drought and resource mismanagement can exacerbate existing tensions and lead to conflict. Such instability could create power vacuums, ripe for large global powers.

Therefore, addressing Turkmenistan’s water challenge is a matter of international concern. Proactive engagement from the United States and the European Union could play a crucial role in promoting sustainable solutions and regional cooperation. In addition, supporting comprehensive research and data collection on water resources, climate impacts, and agricultural practices is essential for informed policymaking. The United States and the European Union should take the lead in facilitating regional dialogues involving Turkmenistan, Afghanistan, Tajikistan, and Uzbekistan. Such initiatives will be critical for fostering transboundary cooperation and preventing conflicts over shared water resources such as the Amu Darya. Furthermore, technical assistance and funding from the United States and the European Union, potentially channeled through civil society organizations, could help implement sustainable water management practices on the ground—from promoting efficient irrigation techniques to supporting public education campaigns on water conservation.

Turkmenistan’s struggle with water scarcity is a powerful illustration of the interconnected challenges facing many parts of the world in the twenty-first century, where climate change, resource management, and geopolitical interests collide. Ignoring this looming crisis is not an option. Concerted action, grounded in cooperation and sustainable practices, is essential not only to secure a livable future for Turkmens but also to maintain stability in the region.

Rasul Satymov is a researcher with Progres Foundation with a focus on climate change, energy, and water issues in Turkmenistan.

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Can Gabon become a beacon of democratic entrenchment for West and Central Africa?

Will Mortenson — Wed, 04 Jun 2025 14:22:04 +0000

Among West and Central African countries that have experienced coups in recent years, Gabon offers a small sliver of hope.

In 2023, Brice Oligui Nguema, the former head of Gabon’s Republican Guard, took power in a bloodless coup. This coup was carried out just one day after aging President Ali Bongo was reelected in a contest that many within the country viewed as a fraudulent attempt by Bongo and his allies to perpetuate the nearly sixty-year political dynasty that began when his father took power in 1967.

While it would be easy to wrap this event in the same blanket as the many other West and Central African military coups between 2020 and 2024 that disrupted an unprecedented period of peaceful civilian rule across the region, Gabon’s situation is different in several ways.

The military coups and their aftermaths in Mali, Guinea, Burkina Faso, and Niger have followed a similar pattern: They all occurred in poor and unprosperous countries; they were all followed by some sort of in-fighting or conflict within interim governments (and a second coup in the case of Burkina Faso); and the elections promised in all four countries have yet to take place.

By contrast, Gabon enjoys a comparatively enhanced level of national wealth and societal prosperity. With a population of just 2.3 million people and vast reserves of oil, gold, and manganese, Gabon boasts the second-highest gross domestic product (GDP) per capita in continental Sub-Saharan Africa. It also has the third-highest prosperity score among the region’s countries in our Freedom and Prosperity Indexes, which measure prosperity levels across 164 countries by tracking income, health, inequality, environmental health, the treatment of minorities, and education. While Gabon suffers from a level of income inequality that rivals other countries in the region, on the whole, it is more prosperous than its West and Central African counterparts. Furthermore, while Gabon’s coup did give way to an interim military government, there was little to no post-coup conflict. And Gabon held democratic elections on April 12, 2025, that, while not without significant flaws, were nevertheless acclaimed by local, regional, and international observers as peaceful, lawful, and fair.

Gabon is more prosperous than its neighbors

Turning the page on the Bongo dynasty

In the weeks leading up the first election since the 2023 coup, Nguema’s picture could be seen plastered all over the capital city of Libreville. After serving as interim president for nineteen months, he was officially elected president on April 12, winning more than 90 percent of the vote. Both before and after the election, Nguema pledged to “restore dignity to the Gabonese people” and to root out the country’s corruption, which the legal subindex of our Freedom Index indicates is among the worst in Sub-Saharan Africa.

Despite these popular goals, the president has not been without his detractors. Such high vote shares are often indicative of corruption, and critics of Nguema note that he has long been a part of the corrupt political system he pledges to dismantle and that he broke his promise to relinquish power after deposing Bongo. In fact, Nguema is Bongo’s cousin and recently allowed Bongo and his wife to relocate to Angola despite them facing ongoing (but unspecified) corruption charges.

And although voter turnout was high and local observers were largely satisfied with the integrity of the election, Nguema’s most prominent opponent—former Prime Minister Alain Claude Bilie-By-Nze—accused Nguema of taking advantage of state resources to fund his campaign.

Furthermore, his interim government adopted a new constitution in 2024 that the Africa Center for Strategic Studies argues grants too much power to the executive and specifically favored Nguema. For example, the new constitution prevented a major political opponent from running in the election by banning candidates over seventy years of age. It also broke from past tradition by including a clause that allows military members to run in elections, extended the length of presidential terms to seven years, and eliminated the position of prime minister altogether. During Nguema’s time leading the interim government, he also suspended all political parties in a move that critics say gave him a distinct electoral advantage.

While Nguema was greeted with scenes of celebration after carrying out the 2023 coup and won an election victory indicative of overwhelming public support, it remains to be seen whether he is willing and able to instigate meaningful democratic reforms.

Yet, even if competition was restricted in this election, the very fact that it happened and that the Gabonese people were able to peacefully vote for someone other than a member of the Bongo family shows that there is an appetite for change and a willingness to engage in the most fundamental act of democracy.

In short, the years since the coup have provided both reason to believe that a more democratic future in Gabon is possible and reason to fear that Nguema is simply replacing the Bongo family’s form of autocracy with his own.

What the data tell us

The Freedom and Prosperity Indexes highlight a number of trends indicating that a country’s surest path to prosperity involves improving political and economic freedom, as well as the rule of law. Conversely, the data tell us that restricting freedom is a proven way to diminish societal well-being.

When a country experiences a freedom shock—meaning the one-year drop in its Freedom Index score is among the top 20 percent globally since 1995—its progress on prosperity tends to stall or even reverse as time goes on.

A country’s prosperity tends to stall or decline after experiencing a freedom shock

The drop in Gabon’s freedom score from 2022 to 2023 was among the most severe freedom shocks ever recorded—within the top 5 percent of one-year declines over the past thirty years. This decline was driven by a sharp dip in the country’s political freedom score, which was in turn driven by an even sharper fall in its elections score, which measures the extent to which political leaders are chosen in open, clean, and fair elections.

Gabon’s political freedom has declined sharply in recent years

Furthermore, out of the forty-six countries in Sub-Saharan Africa for which we have data, Gabon ranks thirtieth in the judicial independence and effectiveness indicator and thirty-eighth in the legislative constraints on the executive indicator.

Gabon’s judicial independence is below the regional average

Gabon’s executive has fewer legislative constraints than the regional average

It is important to recognize that these issues were fomented by the Bongo regime. However, the disempowered nature of the judiciary and legislature and the recent broad decline in political freedom show that Nguema must act quickly to reverse course before declines in freedom hinder Gabon’s long-term progress on prosperity. The country’s freedom score has changed very little in the time that Nguema has held power as interim president, with political freedom in further, albeit minimal, decline.

Despite Gabon’s impressive prosperity levels and per capita GDP in relation to its neighbors and to the broader Sub-Saharan Africa region, over one-third of the population currently lives in poverty. The Bongo family was known for gorging themselves on resource wealth while much of the population was left to suffer. Despite its high overall prosperity score, Gabon ranks in the bottom third of all Sub-Saharan African countries in the inequality component of the Prosperity Index. It has the fourth-highest unemployment rate in Sub-Saharan Africa, with over 20 percent of the total labor force—and 40 percent of young people—currently unemployed. If Nguema falls back on the autocratic habits of his predecessor and chooses personal wealth over the well-being of his country, any hope for democracy in Gabon that followed the 2023 coup will quickly die out.

The path to enduring freedom and prosperity

The data clearly show that establishing democracy as the political norm will help Gabon set itself apart from its neighbors and enhance national prosperity.

To create a strong and vibrant democracy, Nguema must first come to terms with the idea that his tenure as president is not indefinite. He must also commit himself to empowering core institutions of democracy such as the legislative branch and courts, and he must protect the societal freedoms that are fundamental to thriving democracies. This should include allowing political parties to exist and organize and lifting targeted age limits for presidential candidates.

By committing to competitive democracy and political freedom, Nguema can most effectively enhance prosperity and, in particular, reduce the inequality that has plagued Gabon for so long. It is too early to tell for sure whether Nguema has assumed the presidency with the intention of institutionalizing democracy and reducing inequality in Gabon or with the intention of ruling as an autocrat. What is certain is that the end of the Bongo regime—and the democratic impetus provided by the national election—provides Nguema with the opportunity to turn Gabon into the success story that West and Central Africa has been yearning for. For the good of the people who elected him, Nguema should do everything in his power to capitalize on it.

Will Mortenson is a program assistant at the Atlantic Council’s Freedom and Prosperity Center.

Correction: This article was updated on June 4, 2025, to reflect the fact that Gabon is located in Central Africa, not West Africa.

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Judicial reform must be at the heart of Ukraine’s postwar recovery

Oleksandr Vasiuk — Thu, 29 May 2025 19:22:49 +0000

Whenever the topic of Ukraine’s reconstruction arises, most people tend to think of physical infrastructure such as roads, bridges, homes, and hospitals. But real national recovery does not start with bricks and concrete. It begins with trust. And there is no better test of trustworthiness than the rule of law.

Ukraine is currently fighting for national survival against Russia’s ongoing invasion. Once this battle is won, the most important challenge facing the country will be judicial reform. If Ukraine is to emerge in the postwar years as a stable and prosperous European democracy, the process of recovery and renewal must be based on the firm foundations of a strong justice system. This is not a mere slogan; it is an absolute necessity.

Judicial reform is the key to the country’s entire future economic development. Investors will not come to Ukraine if contracts cannot be enforced or if property rights can be bought and sold through corruption. That is the message Ukraine’s international partners have been repeating consistently for many years. With the massive task of postwar rebuilding looming on the horizon, this message is now arguably truer than ever.

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Once the war ends, Ukraine can expect to receive unprecedented international support as foreign governments seek to participate in what promises to be Europe’s largest reconstruction initiative since the years following World War II. While donor funding from partner countries is likely to be very significant, this will not be nearly enough to cover the estimated rebuilding price tag of around half a trillion US dollars. Instead, much of this money must come from the private sector. However, unless Ukraine has a transparent, reliable, and efficient justice system, private capital will stay away.

If Ukraine hopes to become a success story, it needs courts that can settle disputes fairly, whatever the issue. If legal cases are tainted by bias or drag on for years, this will serve as a major red flag to all potential investors. For this reason, Ukraine’s courts should be recognized as a key element of the country’s infrastructure that is every bit as vital to national recovery as roads or power lines. After all, the justice system serves as the legal framework that makes it possible to build everything else.

Eurasia Center events

Nonresident Senior Fellow

Drones, defense, and diplomacy: Negotiations and the battlefield in Ukraine

Conflict Defense Technologies Europe & Eurasia Politics & Diplomacy

Despite the ongoing war, Ukraine has made real progress in recent years toward meaningful judicial reform. This has included the reform of key institutions like the High Court of Justice, along with the launch of new processes to improve the selection of Constitutional Court judges. It is now crucial to build on this momentum.

Judicial reform must be deep, deliberate, and closely tied to Ukraine’s European future. With this in mind, it is important to maintain the current dialogue with the Venice Commission and use its recommendations to shape genuine change. One of the most effective tools to help achieve this change is the participation of international experts. Their role is not to control the process, but rather to help ensure fairness, transparency, and accountability.

As Ukraine looks to create the conditions for national reconstruction, one judicial reform initiative currently being backed by the Ukrainian parliament is the creation of specialized courts to handle issues like land rights and construction disputes. These courts could help speed up vital cases and take pressure off the existing judicial system.

Work is also continuing toward greater digitalization within the justice system, from electronic courts to online case tracking. Much more can be done in this direction. Other tech savvy countries such as Estonia and Singapore are currently leading the way in digital justice. Ukraine can build something just as bold using tools like blockchain and AI. The expanded use of technology can improve the efficiency of Ukraine’s courts, while also boosting trust levels and leading to greater transparency.

Creating a fully functioning and internationally credible justice system is the necessary starting point for everything else Ukrainians want to achieve, from economic strength and prosperity to the rule of law and a greater sense of national security. It can encourage investors to bet on Ukraine, and can help persuade Ukrainians currently living abroad to return home. Ultimately, judicial reform can serve as a national anchor confirming Ukraine’s place in the heart of Europe.

Amid the horror and the trauma of Russia’s ongoing invasion, Ukrainians now have a once-in-a-generation opportunity to achieve transformational change in the country’s justice system. We must not miss this chance.

Oleksandr Vasiuk is a member of the Ukrainian parliament for the Servant of the People party and head of the Ukraine-USA Strategic Partnership cross-party association.

Victoria Olari (@Olari_Victoria): Research associate at the Digital Forensic Research Lab
Daniel Fried (@AmbDanFried): Weiser Family distinguished fellow and former US assistant secretary of state for Europe
Anca Agachi (@AncaAgachi): Nonresident fellow with the Transatlantic Security Initiative and defense policy analyst at the RAND Corporation

Why Dan won

Dan may be a centrist, but he was not the chosen candidate of Romania’s ruling coalition. “Romanian voters sent a loud message: They reject the old political elite,” Victoria says. “Both Dan and Simion positioned themselves as anti-system challengers, capitalizing on widespread frustration with corruption and governance failures.”
But at the same time, “the preference for an outsider didn’t translate into preference for a nationalist or anti-EU firebrand, which is how Simion ran his campaign,” Daniel tells us. Instead, voters picked a mathematician who “ran a campaign that was pro-Europe, pro-NATO, and pro-Ukraine.”

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The foreign factor

While Russia appeared to back Simion, Daniel points out that Simion “maintained distance from Russian President Vladimir Putin (wise in Russo-skeptic Romania).”
Instead, the populist candidate courted US President Donald Trump’s Make America Great Again movement, traveling to the Conservative Political Action Conference and appearing on Steve Bannon’s podcast. “But this did not translate into support at home,” Daniel notes.
Victoria points out that on Sunday, Simion’s supporters “flooded social media with accusations of fraud and amplified fake news stories that mimicked legitimate outlets and falsely declared Simion the winner.” Simion and his backers also accused the presidents of both Moldova and France of meddling in the election. “These actions risk deepening Romania’s societal polarization,” Victoria says.
But Simion did concede in the end, turning the focus to what Dan’s win will mean for the region. Victoria notes that Dan’s pro-Ukraine stance “strengthens regional security and support for Kyiv.” Dan’s victory will also boost neighboring Moldova’s integration efforts with the European Union, she adds, “fostering closer Romania-Moldova ties and countering Russian influence.”

Romania’s road ahead

While Romanians “made it clear” with their vote that “they are European,” Dan’s mandate will still be “an incredibly difficult one,” Anca cautions, as the newly elected president will need to choose a prime minister to form a pro-European political coalition in the parliament, where far-right parties hold one-third of the seats.
His immediate task will involve building trust in an economy with the highest budget deficit in the European Union (as a percentage of gross domestic product), while guiding foreign policy “at a time when the regional context for Romania has never been more dangerous, given Russia’s continued war in Ukraine,” Anca says.
To succeed in the long run, “Dan will have to face down the unaddressed root causes of discontent,” Anca says—such as poverty, corruption, and distrust of state institutions—“that gave oxygen to far-right parties in the first place and brought Romania to the brink of disaster.”

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What’s at stake for Bosnia and Herzegovina as Milorad Dodik faces a political reckoning?

Agon Maliqi — Wed, 23 Apr 2025 18:22:09 +0000

Note: This article was updated on April 23 to reflect Dodik’s attempted arrest.

Milorad Dodik has dominated politics in Bosnia and Herzegovina’s (BiH) Republika Srpska entity for most of the past two decades. But a court ruling earlier this year has put his political future in question, and the response to his legal troubles has instigated perhaps the greatest institutional crisis in BiH since the end of the Bosnian War in 1995.

In late February, a BiH state court sentenced Dodik to one year in prison and a six-year ban on holding public office for defying the decisions of the Office of the High Representative, the international body overseeing the implementation of the postwar Dayton Accords. If this sentence is enforced by a second-instance ruling expected later this year, then Dodik—who has been sanctioned repeatedly by the United States and United Kingdom for corruption—would no longer hold any formal power.

As is often the case with strongmen who equate their personal destiny with that of their people, Dodik framed the verdict as an enemy attack on the Republika Srpska, and he doubled down on secessionism. The Republika Srpska assembly passed laws blocking state-level institutions from operating within the entity and approved a draft constitution claiming the Republika Srpska’s right to self-determination. Ethnic Serbs were invited to abandon several state-level institutions, while a Republika Srpska army and judiciary were also announced. Then in early March, it was revealed that since December, Dodik had also been under investigation in a second case on charges of attacks against the country’s constitutional order. His failure to appear for questioning led to the issuance of a warrant for his arrest.

While BiH’s constitutional court has suspended the Republika Srpska’s separatist laws, the legal and political quagmire exposed the difficulty that BiH institutions face in exercising their authority in the Republika Srpska. Dodik threatened that his security team and the Republika Srpska police would clash with any BiH agency willing to arrest him. On April 23, BiH special police reportedly attempted to arrest Dodik during a visit to East Sarajevo, but were deterred by heavily armed Republika Srpska police units.

This crisis has also exposed the lack of unity in the European Union (EU) on how to handle Dodik. He still enjoys the strong backing of countries such as Hungary, which reportedly even sent special police units to extract him in case of an arrest. Despite the harsh condemnation of his actions by Western officials and the hardening of sanctions against him by Germany and Austria, many in the West still worry that his arrest could trigger a broader security crisis in the Balkans and would prefer to see Dodik make a more orderly exit from office.

Yet by crossing these major red lines for regional security and openly challenging the authority of the BiH government, Dodik has also exposed his weakness and desperation. With a possible dead end in sight for his secessionist threats, Dodik’s main external backers might already view him as more of a liability than an asset.

Who would follow Dodik down the rabbit hole?

This latest episode is merely the most extreme case of a consistent pattern: Dodik instigates a crisis to extract personal concessions from domestic and international actors. In this case, he is stoking a constitutional crisis, likely in the hopes of winning concessions on his legal troubles and keeping himself in power. His saber-rattling counts on Western fears (as evident in dramatic media headlines) that he will push BiH and the Balkans back into war if he does not have his way. While an attempt at Republika Srpska secession would almost certainly lead to a regional conflict, the number of actors who have already shown they are not willing or capable of supporting Dodik down this rabbit hole indicates, at least for now, that his threats lack credibility.

This includes first and foremost Bosnian Serbs, many of whom share Dodik’s secessionist goals, but may not view the dismantling of state-level institutions, let alone a new war under current circumstances, as serving the interests of the Republika Srpska. There was reportedly no enthusiasm for Dodik’s calls to leave state-level jobs in the entity, while Bosnian Serb opposition parties also denounced the move as self-serving.

The experience of Serbs in northern Kosovo provides a cautionary tale that Bosnian Serbs may be heeding now. In April 2023, northern Kosovo Serbs boycotted local elections, which resulted in Albanian candidates winning with a miniscule turnout of less than 3.5 percent. Only a year ago, it was Dodik himself who warned that a boycott of BiH institutions could lead to a similar scenario for Bosnian Serbs.

Dodik’s gambit also rested on foreign-policy miscalculations. His hopes that the Trump administration would shift US Balkans policy in his secessionist direction were rebuffed by Secretary of State Marco Rubio’s clear condemnation of his actions in March. Russia certainly continues to have an interest in turning the region into a new hotspot to distract Western attention and resources from Ukraine. Dodik himself appeared in Moscow on April 1, and he was given a reception with Russian President Vladimir Putin. Yet there are clear limits to what Russia can do to support the secessionist movement, especially if Dodik’s key backer and neighbor Serbia does not greenlight it.

How Serbia’s leader sees the situation

The leverage that this situation has given to Serbian President Aleksandar Vučiċ illustrates why he has been Dodik’s key backer and enabler over the past decade. Much like the case of Kosovo’s Serbs, Dodik’s troublemaking has been a useful tool for Vučiċ to fuel nationalist narratives at home while maintaining plausible deniability and an image of “constructiveness” in his relations with the West.

Dodik’s political fate may now be a bargaining chip in the hands of Vučiċ, who leads a country drifting toward authoritarianism and who constantly hedges and negotiates with the West on problems he creates. Considering Vučiċ’s own difficult domestic situation, with a large-scale and enduring student protest movement that has threatened his power and shattered his image abroad, it would not be a surprise if he sacrifices a distressed and expended asset like Dodik to the West to further his own goals. If Dodik were to lose Vučiċ’s backing, he would be unable to continue paralyzing Bosnian institutions with his secessionist threats and may have to respect the final court sentence or seek exile in Moscow or Budapest.

The West seems to be done buying Dodik’s threats of regional instability and largely appears determined to see him leave office, whether that means his arrest or resignation and exile. But while Dodik leaving office would be good for BiH and deterrence against Republika Srpska secessionism in the short term, the West is not adopting the same attitude toward his enablers in Belgrade and Budapest.

In defiance of the EU, Vučiċ recently stated that he would join the World War II victory parade in Moscow on May 9 and invited Russia’s Federal Security Service, or FSB, to “investigate” claims that sonic weapons were used against Serbian student protesters (of course, no foul play was found). This most recent foreign-policy signaling by Vučiċ illustrates that while Dodik’s political future seems grim, the underlying conditions behind his troublemaking in Moscow and Belgrade will remain undeterred, waiting for more opportune moments.

Agon Maliqi is a nonresident senior fellow with the Atlantic Council’s Europe Center. He is a political and foreign policy analyst from Pristina, Kosovo.

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The Western Balkans stands at the nexus of many of Europe’s critical challenges. Some, if not all, of the countries of the region may soon join the European Union and shape the bloc’s ability to become a more effective geopolitical player. At the same time, longstanding disputes in the region, coupled with institutional weaknesses, will continue to pose problems and present a security vulnerability for NATO that could be exploited by Russia or China. The region is also a transit route for westward migration, a source of critical raw materials, and an important node in energy and trade routes. The BalkansForward column will explore the key strategic dynamics in the region and how they intersect with broader European and transatlantic goals.

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Peru’s crime wave: A populist opening or a chance for reform?

Martin Cassinelli — Thu, 27 Mar 2025 20:20:34 +0000

On March 21, Peruvians took to the streets to protest government inaction against a surging crime wave. The recent assassination of Paul Flores, a famous cumbia singer, in the capital underscored the deepening security crisis afflicting Peru and its Andean neighbors. News of extortion rackets and contract killings have become routine headlines, and with the 2026 general election approaching, public safety now tops voters’ concerns. Early political campaign ads are already flocking the streets of Lima with candidates proudly presenting themselves as the “Peruvian Bukele” in reference to the Salvadorian president and his heavy approach to crime.

In response to the crime wave, the government on March 17 declared its third state of emergency in less than a year, suspending basic liberties to allow police to make arrests without judicial orders. Yet, while authorities focus on crackdowns against violent crime, they risk ignoring the deeper cause of the crisis: a decade of institutional decay marked by jailed presidents and pervasive corruption.

In the absence of broad-based political reforms and a sincere effort to address corruption as a root cause, Peru might soon fall into the same trap it did in 2021. Amid the devastating COVID-19 pandemic, voters elected populist Pedro Castillo as president. Castillo fed off the discontent against the state and sought to break Peru’s democratic order with an unsuccessful “self-coup,” for which he was later impeached and imprisoned. As Peru enters a new electoral cycle amid a crime wave, candidates must prioritize meaningful institutional reforms over hollow tough-on-crime rhetoric. Otherwise, the country will remain trapped in a cycle in which corruption breeds crime and democracy hangs by a thread.

As in neighboring Ecuador and Chile, the current crime wave has ground Peru to a halt. Between 2019 and 2024, reported extortions increased sixfold, and in 2025 every third Peruvian reports knowing a victim of extortion, many of whom are small business owners. Homicides, too, have doubled since 2019. And in January of this year alone, there were 203 percent more homicides than in January of 2017.

Behind these alarming figures hide strengthened transnational criminal organizations, such as the Tren de Aragua, as well as a myriad of other drug trafficking organizations, mafia syndicates, and gangs that alternately cooperate, collude, and compete for the control of illegal activities. While drug trafficking, homicides, and extortions are terrorizing Peru’s populous coastal cities, Peru’s Amazon has been ravaged by illegal gold mining, where illegal miners have made record profits as the value of gold has soared in international markets. In 2025, over 75 percent of Peruvians report being scared when leaving their homes.

While transnational criminal organizations are the actors behind the current crime wave, it is weak state capacity that has allowed the crime to permeate. The Peruvian sate’s capacity to respond has been impaired by political corruption, often influenced by criminal actors themselves. By 2024, 67 of 130 Congress members (a simple majority of Peru’s legislature) were under criminal investigation. When prosecutors charged Congress members of allegedly being part of criminal organizations, Congress passed a law narrowing the definition of “organized crime,” hindering investigations into corruption and extortion. President Dina Boluarte did not veto this bill, and it became law in August 2024. (Congress later reinstated extortion under the definition of organized crime but left many corruption offenses excluded.) Congress also passed a law in in September 2024 that placed a larger role of the police in criminal investigations, taking functions away from the Attorney General’s Office, which legal experts warned would weaken investigative efficiency. And Boluarte has weakened the Attorney General’s Office as she herself is being investigated for corruption. As a result, the state’s ability to prosecute crimes has been stymied by public officials seeking to blunt investigations against themselves.

Peruvians will vote next year amid a crisis that the state is incapable of protecting its citizens from. The parallels between the 2021 and 2026 elections are clear. In 2021, voters were enraged by Peru’s world-highest per capita COVID-19 death rate and a scandal in which political elites received vaccines before the public. Peruvians’ frustration propelled Castillo—then a little-known populist with no governing plan—to victory. After leading a government ridden with corruption, Castillo and his advisors sought to break the constitutional order with a “self-coup.” Peruvian democratic institutions held up and their attempt remained short-lived.

Now, heading into 2026, voters face a new crisis: a crime wave and a state failing to ensure public safety. This climate is fertile ground for populist promises of a mano dura, or “iron fist,” approach to combating crime. But any real solution must also tackle crime’s institutional roots. Candidates should promote a comprehensive political reform that reduces organized crime’s influence in the country’s political bodies. This reform should include steps that make running for office more difficult for those charged with corruption. In addition, the Attorney General’s Office should be depoliticized and promote a new cohort of competent, apolitical prosecutors and judges.

At the same time, the United States and other partner nations must recognize the risk that corruption poses to the survival of Peruvian democracy. The US State Department should designate Peruvian public officials engaged in corruption and prevent them from entering the United States, an action it took this month against former Argentine President Cristina Fernandez de Kirchner, who was convicted of corruption charges in Argentina. Equally critical is addressing other root causes of crime—poverty, inequality, and lack of education—which have made Peru’s youth vulnerable to recruitment by criminal gangs in the first place.

Politicians promising to be the “Peruvian Bukele” may garner attention. But leaving the institutional causes of crime unaddressed will only deepen Peru’s democratic crisis while doing little to curb crime.

Martin Cassinelli, a Peruvian native, is an assistant director at the Adrienne Arsht Latin America Center of the Atlantic Council.

The post Peru’s crime wave: A populist opening or a chance for reform? appeared first on Atlantic Council.

How greater freedom empowers entrepreneurs and expands access to credit

Jérémie Bertrand, Nina Dannaoui-Johnson, Annie (Yu-Lin) Lee, Caroline Perrin — Mon, 10 Mar 2025 13:00:00 +0000

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Access to credit plays a crucial role for small and medium enterprises (SMEs), which account for 90 percent of businesses globally and generate over 50 percent of employment. However, barriers such as high collateral requirements, discriminatory lending practices, and borrower discouragement—especially among women-led firms—hinder their growth. Evidence from firm-level data in the World Bank Enterprise Surveys and the Atlantic Council’s Freedom Index reveals a strong link between freedom—spanning economic, legal, and political dimensions—and borrower discouragement. In high-freedom environments, borrower discouragement rates drop to 17 percent, while they reach nearly 48 percent in low-freedom settings.

Among these dimensions, legal freedom stands out as the most influential. Strong legal frameworks that protect property rights, enforce contracts, and combat corruption instill confidence in entrepreneurs and encourage credit-seeking behavior. The impact of these factors is particularly significant for SMEs and women-led businesses in low- and middle-income countries, where financial systems remain underdeveloped. Economic deregulation and transparent financial markets improve access to credit, while gender-sensitive policies—such as targeted financial education and credit guarantees—help mitigate the systemic biases that female entrepreneurs encounter.

Global case studies of successful policy interventions offer valuable lessons. New Zealand’s robust property rights framework, Singapore’s pro-business environment, and Kenya’s M-Pesa platform illustrate how strategic reforms can empower entrepreneurs and bridge credit gaps. These initiatives demonstrate that fostering freedom reduces borrower discouragement and drives inclusive economic growth.

About the authors

Fellow

Jérémie Bertrand

Economy & Business English

Staff

Nina Dannaoui-Johnson

Deputy Director

Africa Human Rights

Staff

Annie (Yu-Lin) Lee

Program Assistant

East Asia Rule of Law

Fellow

Caroline Perrin

Nonresident Fellow

Economy & Business English

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Building balanced institutions for prosperity

Ignacio Campomanes, Annie (Yu-Lin) Lee, Joseph Lemoine — Fri, 28 Feb 2025 19:41:22 +0000

The many different paths to freedom

The interconnections among dimensions of freedom

Looking for answers around the world

There is no doubt that the global geopolitical context became more unstable in 2024. The wars in Ukraine and the Middle East seem to have brought the world closer to large-scale open conflict. Other ongoing conflicts around the world, including the civil wars in Sudan, Myanmar, and Yemen, rarely make the daily news, at least in Western media.

The “super-election year” has led to important political changes in several nations. Among developed countries, we have seen a notable trend of incumbents struggling or losing elections. In the United States, Donald Trump made a historical political comeback to the presidency. In the United Kingdom, the Labour Party regained power after fourteen years and five different Conservative prime ministers. Among many, incumbents in France, Germany, Japan, South Korea, and Taiwan all lost ground in elections held in 2024. In the developing world, some countries have experienced dramatic transformations, such as Bangladesh (covered in detail in this volume), while in others the electoral results have debilitated the incumbent government’s majority (India and South Africa among many others).

Global instability is combined today with a series of concerning governance trends incubated in the last decade. The most worrying is the global decline of political freedom since 2013. This process has been well documented in the academic literature, and has recently been the prominent focus of research for policy-oriented international organizations and think tanks around the world. The Freedom and Prosperity Indexes produced by the Atlantic Council’s Freedom and Prosperity Center, which serve as the quantitative background of the country cases analyzed in this volume, clearly illustrate the generalized tendency toward autocratization that affects all regions. As portrayed in Figure 1, the global average of the political subindex has suffered constant erosion since 2013, and is today at a twenty-four-year low. All of its constitutive components have decreased in recent times, but most severely political rights and civil liberties.

Figure 1. Erosion of political freedom since 2012 (global average)

Source: Freedom and Prosperity Indexes, Atlantic Council (2024).

In this turbulent context, the fight for freedom and democracy is crucial and must be waged on every front. This battle is always costly and uncertain. Historical cases, but also very recent episodes covered in this volume, such as those in Bangladesh and Venezuela, show us that national populations bear the largest burden, but external factors are also instrumental. In addition to international pressure and support to domestic agents of change, rigorous analysis and research based on objective data, showing the beneficial effects of liberty in the long run, are crucial instruments.

The Atlantic Council’s Freedom and Prosperity Center wants to serve as a catalyst of such endeavors, particularly through its annual Atlas: Freedom and Prosperity Around the World, of which the present volume is the second edition. This 2025 Atlas features sixteen country studies, offering insights from renowned scholars and practitioners on their nations’ journeys toward freedom and prosperity. It includes timely analyses of countries experiencing dramatic events that may become pivotal in their histories, such as Bangladesh, Georgia, and Venezuela.

The chapters clearly support the conclusion reached in cross-country studies of a causal positive relation between freedom and prosperity. At the same time, the chapters also highlight the specificities and particular characteristics of each country’s institutional evolution. The Freedom Index’s comprehensive approach allows for a disaggregated analysis of different dimensions (political, economic, and legal subindexes) and components (political rights, trade openness, corruption, etc.) of the institutional architecture of a country, which has proven extremely useful to understand the interlinkages, mechanisms, and complementarities between them in the context of each country covered in this volume. This introductory chapter tries to situate these country-specific insights in the broader economics and political science academic literature on the relationship between distinct institutional dimensions and economic development.

Countries around the world differ substantially in terms of institutional attributes. Using the conceptual framework of the Freedom Index, which differentiates between three institutional dimensions—political freedom, economic freedom, and the rule of law—we show that there exists a high level of heterogeneity across countries in terms of their progress in each of these. And looking at the historical evolution of these institutional dimensions, we observe that not all countries have followed the same path.

Knowing that these dimensions are not perfectly correlated, we examine the relationships and interactions between them. Do these institutional dimensions substitute for or complement each other? Is any one of them a necessary condition for the others? Is a particular chronology of institutional development more likely to produce fast-growing prosperity?

In this chapter we focus on four hypotheses proposed in the academic literature: (1) the claim that the rule of law may be a necessary condition for economic and political freedom; (2) the debate on the primacy of democratization or stateness; (3) the discussion on whether democracy fosters or hampers economic freedom; and (4) the hypothesis that economic freedom may be a necessary condition for political freedom.

To end this overview, we provide a brief summary of each chapter included in this volume, focusing on how the mechanisms explained here have operated in the politico-economic evolution of each country. The chapters highlight the need for a deeper understanding of the specific channels through which free institutions foster integral and sustained development and, eventually, prosperity. In the words of 2024 winners of the Nobel Prize in Economics, Daron Acemoglu, James Robinson, and Simon Johnson, further research should be carried out on “how democracy alters economic incentives and organizations and to pinpoint what aspects of democratic institutions are more conducive to economic success.”

The many different paths to freedom

Douglass North defined institutions as “humanly devised constraints that structure political, economic and social interactions.” Modern societies rely on a complex mix of these institutions—like democracy, the rule of law, human rights, and property rights—which often overlap and can be difficult to clearly define. They are debated and interpreted in different ways, and there is no universal agreement on their precise definition.¹

To better understand how institutions influence development, we take a functional approach. Rather than getting stuck in theoretical debates, we use a flexible framework to explore how different sets of institutions function in real-world contexts.

The Freedom Index created by the Atlantic Council’s Freedom and Prosperity Center is a novel attempt in this direction. The Freedom Index is based on the idea that a country’s institutional architecture rests on three pillars: political, legal, and economic. The set of institutions forming each of these can be assessed based on the level of freedom they grant to individuals. We break the Index down into three subindexes—political, economic, and legal—which relate to the ideas of democracy, market economy, and the rule of law.

The political subindex reflects a country’s institutional framework for the selection of those holding executive political power and the limits and controls imposed on the exercise of power. The legal subindex is based on how far citizens and government officials are bound and abide by the law. The economic subindex captures the degree to which scarce resources are allocated by personal choices coordinated by markets rather than centralized planning directed by the political process.

Each subindex is formed by several components. The underlying theoretical conceptualizations and the measures used to quantify them are grounded in the academic literature in political science, law, and economics, as discussed in previous reports. Using this framework, the Freedom Index provides a rigorous quantitative assessment of each dimension and its constituent components for 164 countries, from 1995 to 2023, and allows us to address the question of their interlinkages and relations.

Looking at the scores for the most recent year in the sample (2023), the simple correlations between dimensions for all countries covered by the indexes is relatively high, ranging between 0.68 and 0.8, as shown in the first column of Table 1 below. Nonetheless, this result is heavily influenced by the most institutionally developed countries, which receive very high scores in all threesubindexes.

If we limit our analysis to non-Organisation for Economic Co-operation and Development (OECD) countries, as in column 2, the correlations fall significantly, as low as 0.52 for the correlation between political and economic subindexes. Other subgroups, such as the Sub-Saharan African region (column 3), or the countries with relatively less political freedom (column 4), also present far from perfect correlations between the three subindexes.

These basic results evidence that countries do not necessarily have similar scores in all three sub- indexes, and that these can be fairly uneven. This perception is reinforced when we descend to the component level of the Freedom Index. The correlations between the components of different subindexes are many times below 0.5. Figure 2 shows the scatter plot between political rights versus bureaucracy and corruption for 126 non-OECD countries. As is clearly shown, we can find very different combinations of these two components across countries. The political rights score barely explains 7.6 percent of the variation in the bureaucracy and corruption score. This means that the remaining 92.4 percent of the variation is due to other factors. Some notable cases of great disparities between the scores include United Arab Emirates, Nigeria, and Singapore.

Table 1. Correlations between dimensions of freedom

Notes: Pearson’s correlation. Number of countries included in each column is shown in parentheses.
Low political freedom refers to countries with a score in the political subindex in 2023 below the median.

Figure 2. Political rights vs bureaucracy and corruption (Non-OECD Countries)

Source: Freedom and Prosperity Indexes, Atlantic Council (2024).

We can further theorize about the evolution of the three dimensions of freedom by looking at how these have changed across time within countries. An in-depth analysis of this topic is beyond the scope of this essay, but we can gain insights with the example of two Sub-Saharan African countries.

Rwanda and Nigeria had almost identical scores in the Freedom Index in 1995: thirty-nine and forty respectively. Both have experienced substantial increases, reaching a very similar level by 2023 (53.1 and 53.9). Yet the evolution of the three subindexes shows stark differences between the two countries. Progress in the former has been driven by sustained increases in the economic and legal subindexes, while political freedom barely changed. Meanwhile, Nigeria’s improvement is single-handedly explained by a sharp increase in the political subindex in 1999, capturing the country’s democratic transition, whereas the legal and economic subindexes have fluctuated and do not show significant improvement.

Rwanda and Nigeria exemplify two very different paths of institutional progress that reflect the historical experience of several other countries. Rwanda’s path, based on law and order and economic freedom but limited political freedom, reminds us of South Korea and Spain before their respective democratic transitions. Nigeria’s “democratization first” path is similar to that taken by many Latin American countries in the second half of the last century, which led the third wave of democratization, despite low levels of state capacity and not fully open and developed market economies.

Figure 3. Evolution of freedom dimensions, Rwanda and Nigeria

Source: Freedom and Prosperity Indexes, Atlantic Council (2024).

The interconnections among dimensions of freedom

The evidence shows that the three dimensions of freedom develop unevenly over time and in different parts of the world. This highlights the importance of understanding how these dimensions are connected, whether they support each other or can replace one another, and how they work together to influence overall prosperity.

Most quantitative measures of institutions implicitly assume that the different components can simply substitute for each other.² However, there are several potential complementarities between institutions.³ Understanding how these complementarities function is crucial, especially when assessing the impact of free institutions on economic performance and overall prosperity. Here we raise four questions about these connections. Empirical testing of these questions will follow in future research.

Is the rule of law a necessary condition for political and economic freedom?

The legal subindex measures the rule of law in formal terms, in line with scholars such as L. Fuller or J. Raz. If operating perfectly, the rule of law guarantees that political and economic freedom are effectively upheld, and can thus exert their effects on economic variables. Intuitively, the rule of law is then seen as a container into which substantive freedoms and rights are poured. Severe defects in the establishment of the rule of law, such as widespread corruption, inefficient bureaucracies, or a judiciary that does not ensure that executive power complies with the law, then represent holes and cracks in the receptacle that allow freedom to leak away.

The idea expresses the distinction between de jure and de facto recognition of rights and freedoms. The enshrinement of individual civil or political rights in a written Constitution—such as freedom of expression, voting rights, and equality before the law—has little value if these are not effectively enforced and respected by the general population and, most importantly, by those in public office. Similarly, if the law recognizes property rights and generally allows private economic transactions and free competition, but the state apparatus does not adequately limit theft or demands bribes, the potential for economic freedom is limited. Additionally, if the state routinely expropriates property without proper compensation, it will hinder the development of a competitive market environment and its associated economic efficiency gains.

What comes first, stateness or democratization?

There are different theories on the temporal sequence in which different institutions are built within a country, and whether the order matters for economic outcomes. A prominent one is the “stateness first” argument, which claims that developing state capacity before democratization produces better long-term economic results than democratization processes in weak capacity environments.⁴ Here, state capacity means a formal notion of the rule of law in which a country is able to establish an efficient state apparatus in the Weberian sense,⁵ capable of enforcing and implementing policies and regulations within the territory through an impartial and effective bureaucracy.

In this view, premature democratization is likely to produce clientelistic and patronage dynamics, generating inefficient allocations of resources, reduced productivity, lower quality of public services, increased uncertainty, and overall diminished economic activity. In the worst case, it may be a recipe for internal conflict and violence. Only until a state has solved its problem of credible enforcement, in the terminology of D’Arcy and Nistotskaya, can the benefits of democratization be fully realized.

Despite its prevalence, especially in policy circles, the stateness first argument is not free of critique. On theoretical grounds, it is not clear whether autocratic or democratic governments face better incentives to invest in state capacity. Democracies, by providing a higher degree of legitimacy to political power and the legal system it enacts, can facilitate legal enforcement and compliance by the general population. Moreover, democratic accountability can incentivize leaders to invest in an administrative apparatus that ensures the efficient delivery and provision of public goods. Autocratic leaders, to the contrary, may prefer to underinvest in state capacity in order to secure personal control of public resources and limit the contestation capacity of the population.

Recent evidence shows little support for the idea that countries with high state capacity perform better upon democratization than those that democratize under low capacity levels. Additionally, there is evidence of a positive and significant relation between democracy and growth in the context of weak capacity states in Sub-Saharan Africa.

Does democracy hamper or foster economic freedom?

The question of whether democracies or autocracies are more conducive to liberalization and the promotion of economic freedom has received different answers. The arguments pivot around three main ideas. First, some have argued that democratic building blocks such as separation of powers and the system of checks and balances limit the opportunities of political power to expropriate private resources, and thus better secure property. In this sense, the same democratic institutions that protect individual civil and political rights also serve as a safeguard of property and contract enforcement. In contrast, an autocratic ruler, not bound by any constraints on his or her authority, represents a permanent threat to private property.

The second idea relates to the time horizon of policies in democracies versus autocracies. Liberalization, especially openness to trade and financial flows, can produce intense labor and production reallocations in the short run, which can entail layoffs and other costs before the benefits of such policies are materialized. Whether democracies are better equipped than autocracies to bear the short-run costs of liberalization is not clear. On the one hand, democratic leaders have the legitimacy provided by popular support to implement their proposed policies. But on the other hand, incentives to ensure their reelection may deter them from inflicting short-run costs on the elector- ate. For non-democratic leaders, the length of time they expect to stay in power determines the level of incentives to promote economic liberalization. In unstable autocracies, the ruler is likely to try to seize resources in the short run, before he or she loses power. Instead, stable autocracies may favor economic liberalization in order to increase aggregate output and thus the base of potential taxation rents in the future.

Finally, it has been argued that the relation between regime type and economic freedom depends on mediating factors, especially the distribution of income or wealth. The proposition seems particularly related to the dimension of economic freedom that deals with the size of government in terms of taxation and spending. In highly unequal countries, democratization is likely to generate increasing levels of redistributive taxation and thus harm measures of economic freedom. Similarly, high levels of inequality in wealth and capital may induce voters to favor stricter labor regulations or restrict capital mobility. Recent empirical evidence seems to suggest that, in democracies, economic freedom tends to decrease when the level of inequality is high.⁶

Is economic freedom necessary for political freedom?

Nobel laureates Friedrich Hayek and Milton Friedman posited that politically free societies must also be economically free, so economic freedom is a necessary condition for political freedom and democracy. Hayek warned that Western democracies faced a potential slippery slope toward authoritarianism after World War II, if the central governmental management of the economy required by the war effort were to be maintained or expanded. Once the state is given power over economic decisions, Hayek said, it is only a matter of time before the centrally decided plan differs from the preferences of at least some individuals. The government will need to use its coercive power to limit individual choices and rights. It may also constrain freedom of speech if used to confront or oppose governmental action. Additionally, the government might force individuals into certain occupations or locations, ultimately leading to a totalitarian state. Therefore, he concludes that only within a capitalist system is democracy possible. Friedman asserted that there was no historical example of a society that has enjoyed a high level of political freedom without something close to a market economy.

Neither Hayek nor Friedman argued that economic freedom always sustains political freedom. They saw the former as a necessary but not sufficient condition for the latter. The hypothesis seems to be supported by empirical evidence. Yet, the claim that heavy government intervention in economic affairs inevitably leads to political servitude is contradicted by the experience of some Western countries. This is particularly evident in the Nordic European countries during the second half of the twentieth century. The combination of high levels of political freedom with large government intervention in the economy has proved not only possible, but has led this group to become some of the most prosperous societies of the world today.

A possible explanation may relate to the discussion about the size of government and economic performance. Government taxation and spending arguably reduce economic freedom, but can nonetheless generate positive aggregate economic effects if social benefits exceed the unavoidable distortionary costs. Political freedom, by favoring free public debate and discussion, may thus help identify those public policies with positive net payoffs, and discard those that generate aggregate inefficiencies, allowing for a stable association of democracy and significant government economic involvement.

Looking for answers around the world

Having reviewed some potential relationships between the three dimensions of freedom, the final section of this overview provides a brief summary of each country chapter, with a focus on whether such mechanisms have operated in each country’s institutional evolution in the last three decades or are likely to do so in the foreseeable future.

Some common ideas emerge. First, there is substantial divergence between written norms and implementation of those norms, especially in the developing and least developed countries. This limits the potential effects of institutional reform on economic growth and overall prosperity. Second, democratic erosion and instability are often the consequence of severe defects in the rule of law, in particular political corruption and inefficient bureaucracies. Third, for most authors, the most urgent area for reform in their countries is the one with the weakest performance—their “weakest link.” This highlights the significant complementarities between institutional dimensions, suggesting that balanced development across all areas is essential for prosperity.

Country Chapters

Bangladesh

Ahmed Mushfiq Mobarak provides a timely anal- ysis of Bangladesh, covering the student-led “Monsoon Revolution” during the summer of 2024 that ended with Sheikh Hasina’s loss of power. Mobarak traces the beginning of the democratic erosion of Bangladesh to increasing corruption by the two major political parties since the early 2000s, which led to political instability. Hasina and the Awami League won a supermajority in the 2008 elections, but squandered the opportunity for improving governance, and instead initiated a clear autocratic path. Elections followed the regular schedule, but it is difficult to see them as mean- ingful. Boycotts by the opposition, the atmosphere of political violence, and deep erosion of individual rights dramatically limited the level of contestation in the electoral process. In addition, the autocratic government devoted major efforts to controlling the judiciary, to safeguard its hold on power and to use it as a weapon to persecute the opposition.

The 2024 revolution was diffuse and decentralized—with organic student protests that quickly spread throughout the country. As a result, the post-revolution political leadership and the way forward remain unclear. Muhammad Yunus, the founder of the Grameen Bank and a Nobel Peace Prize laureate, took charge as “chief adviser to the caretaker government” at the behest of students. His international name recognition and stature make him a credible leader, and temporarily stabilized the political uncertainty, but the country’s political future remains unclear. There is a lot of hope among average citizens that ousting a powerful autocratic government was a major achievement, and that the architects of that uprising can ensure better governance going forward by instituting some fundamental reforms and not repeating the mistakes of the past. Given that fundamental reforms are needed, including a reexamination of several aspects of the country’s Constitution, the path ahead is likely neither linear nor straightforward.

Cameroon

Political power is mostly centralized in Cameroon, and as a result there is no effective system of separation of legal powers, with both legislative and judicial branches being dependent on the executive power, as Vera Songwe explains. There are spillovers from political liberty to other aspects of the institutional framework, as evidenced by the country’s poor performance in terms of economic and legal subindexes. The drag imposed by limited political freedom is most notably evident in the very low level of gender equality in the economic sphere, reflecting how lack of representation of significant shares of the population in the political process undeniably harms their interests.

Going forward, the government of Cameroon should focus on two main areas: education and environment. Education remains the fastest way to economic empowerment of populations, and women in particular. In the long run, it can help reduce costs of healthcare as educated women tend to adopt more preventive approaches for themselves and their children. To this end, a policy of free primary education must be complemented by strong indicators of teacher performance to ensure that children are actively learning. Regarding the environment, Cameroon’s environmental resources, if well managed, could be an important source of revenue. Reforestation in particular should be a primary policy focus.

Canada

Randall Morck notes that Canada has kept its place among the freest countries in the world for sev- eral decades. However, he also identifies some worrying recent trends that are affecting several building blocks of the liberal democratic system. Civil liberties show a decreasing trend that has continued well after all measures imposed to fight the COVID-19 pandemic were lifted, driven by a somewhat freedom-restrictive understanding of diversity, equity, and inclusion (DEI) policies. Recent corruption scandals have involved the current government’s party. Judicial independence is also under stress, and particular Supreme Court rulings have generated some degree of legal uncertainty, specifically in relation to the requirement to consult First Nations about major infrastructure projects, which has produced visible negative effects on the construction sector.

The institutional challenges Canada faces will likely be exacerbated if the country is not able to recover strong economic growth in the medium term. In order to do so, enhancing productivity growth must be a priority, through increasing corporate research and development investment. Canada’s traditional openness to trade and capital will be challenged by the announced intention of the new Trump administration to renegotiate the North American Free Trade Agreement (NAFTA), as well as the rising concerns about national security that will likely produce new trade legislation affecting Canada’s relations with China and other trade powers. In addition to economic risks, several social issues will require especial attention in the coming decade, including immigration policy, the evolution of the territorial tensions between Québec and the rest of the regions, and the successful integration of First Nations.

Ethiopia

The recent situation in Ethiopia is a paradigmatic example of a case where a government’s incapacity to provide basic civil stability and peace can put an abrupt halt on development. Abbi Kedir argues that the remarkable economic growth of the 2000–20 period, driven by public investment in infrastructure and industrial expansion, was interrupted by the proliferation of internal conflicts and fighting between the federal government and various groups in regions such as Tigray, Amhara, and Oromia, which disrupted production and trade.

The armed conflicts around the country are the biggest impediment to movement of labor and traded goods, and the carrying out of productive activities. If peace and security are not restored in all regions of the country, the socioeconomic situation will deteriorate further. Agricultural and industrial production, and other employment-generating economic activities such as trade and investment, will continue to suffer. Besides the most pressing issue of security, another big challenge that Ethiopia faces is the alarming demographic trend. Each year, two to three million young Ethiopians enter the labor force, and it is clear that the labor market cannot absorb such a huge number of workers. Any hope of transforming the economy—or even of gaining a meaningful grip on it—is an elusive dream in a country where there are high levels of unemployment, poverty, inequality, destitution, internal conflicts, food insecurity, and an ever-growing and underskilled youth population.

Georgia

The waves of reform Georgia went through between 1995 and 2018 led to a parallel improvement in all three dimensions of freedom, although the establishment of the rule of law persistently lagged behind economic and political liberalization, as noted by Tinatin Khidasheli. Most notably, the country failed to undertake a profound reform of the judicial system, which showed major deficiencies due to a non-transparent and entirely arbitrary selection process, which allowed this crucial pillar of the state to be administered by a small elite of judges for almost two decades. Since 2018, the country has been experiencing a dramatic institutional regression, clearly accentuated in the last months. The data do not yet reflect the passing of recent laws on foreign agents and LGBTQ+ rights, nor the several amendments passed to electoral legislation, reducing the opposition’s and civil society’s capacity to monitor and contest the government. The 2024 parliamentary elections in Georgia produced an even more hostile and polarized environment, with all major opposition parties, civil society monitoring organizations, and international observers claiming major fraud.

Georgia stands today at a critical crossroads. One of the most significant risks the country faces is the ongoing influence of Russia, which exerts considerable power through economic, political, and military channels. The major counterbalanceing force needs to come from civil society, and its wish to look west toward the European Union (EU). A majority of the population are predominantly asking for practical steps to bring Georgia closer to the EU and eventual membership, which serves as a primary catalyst for change. Important milestones, like visa-free travel within the EU for Georgians and free trade agreements, represent advancement and inspire citizens’ hopes for EU membership. Georgia’s future freedom and prosperity depend on leveraging European integration. By fostering resilience, diversifying its economy, and ensuring political stability, Georgia can achieve stability, growth, and greater freedom.

Greece

Elias Papaioannou explains how, at the onset of the financial crisis of 2008, Greece was significantly more prosperous than its institutional quality would have suggested. Given the strength of the institutions-development nexus, this paradox was unlikely to last indefinitely. Sadly, it was income and prosperity that fell away, and dramatically so, as Greece lost a quarter of its output, unemployment tripled, hundreds of thousands of talented Greeks emigrated, the welfare state collapsed, and poverty became increasingly evident. The economic adjustment programs led by “the troika” forced a series of much-needed reforms in areas like pensions, labor, and product and capital markets. Unfortunately, neither the Syriza/Anel coalition (2015–19) nor the New Democracy administration (2019–present) implemented genuine institutional reform, including making markets more competitive, strengthening investor protection, speeding the judicial process, and safeguarding the independence of public agencies.

In the next decade, Greece needs to significantly reinforce all aspects of its institutional framework. Strengthening the judiciary, enhancing checks and balances on the executive, and investing seriously in the rule of law are essential, not only to restore confidence in democracy but also to promote much-needed economic growth. The priorities should be to enhance institutions, tackle corruption, promote economic freedom (by bringing down cartels and freeing product markets), and seriously invest in public administration and independent agencies (e.g., a competition authority). This is easier said than done, and at the time of writing this list does not seem to be the priority.

Japan

Political freedom and the rule of law in Japan have been significantly above the OECD average and experienced only minor fluctuations for the last three decades. Economic freedom, however, is slightly lower, especially in terms of women’s economic opportunities. Kotaro Shiojiri points out that the democratic political debate has directed political agents to focus on those policies demanded by citizens, although the process is sometimes slow. One good example of Japan’s poor performance on women’s economic freedom is the so-called “M-curve,” whereby women in their thirties have much lower labor force participation rates than younger and older age groups. The most recent data show a substantial improve- ment on this issue, but it is still not fully solved even though “womenomics” was a major theme of former Prime Minister Abe’s premiership from 2012–20 and has remained a priority in subsequent administrations.

Japan faces a series of challenges for the next decade. The demographic situation is certainly worrying, as Japan is one of the most rapidly aging societies in the world, and neither policies directed to increase fertility nor immigration is an easy solution to this challenge. A second imperative for the country’s future is to regain solid economic growth. Japan’s labor market lacks flexibility and maintains significant structural rigidities when compared with most developed Western economies. There are pros and cons to this situation that any future reform should weigh up. As Japanese companies look to build job-type employment structures, they have an opportunity to square this circle, maintaining the low levels of inequality for which Japan is rightly praised while also providing more opportunities for flexible and dynamic career paths that will promote economy-wide productivity gains.

Kazakhstan

Kazakhstan is a good case study for the argument that autocratic regimes are better focused on long-run economic policies. Nargis Kassenova explains that the country has maintained a positive trend of liberalization in the last three decades, reflect- ing the goal to integrate into the global economic community. Yet significant fluctuations and inconsistencies have plagued the process, especially since oil revenues started to increase in the early 2000s and the government was clearly tempted to use the windfall to pursue interventionist and protectionist economic policies.

The unexpected resignation of Nazarbayev in 2019, and the “Bloody January” events in 2022, produced a critical juncture for the country. At present, President Tokayev’s reform agenda points to further liberalization of the system, but progress is by no means guaranteed. Besides very significant geopolitical risks that may heavily influence Kazakhstan’s future, in particular a potential Russian military threat, a crucial milestone will take place when Tokayev’s term ends in 2029. If at that point a peaceful transfer of power takes place, it will be a sign of a successful culmination of the democratic transition. Nonetheless, civil society needs to continue exerting pressure to avoid a halt in the reform process in favor of professional state and socioeconomic goals, which could turn the government’s aspiration into becoming simply a functional authoritarian state.

Kuwait

Kuwait’s political regime presents noticeable specificities that make it difficult to compare to the liberal democracies of the Western world, states Rabah Arezki. Relatively fair and free elections coexist with a ban on political parties, and the inviolability of the Emir is combined with strong control of his government by parliament. While Kuwait’s democratic experience has been positive and serves as an example for other countries in the region, the system does not yet represent the interests of all segments of society equally, producing large differences in the situation of women and low-skilled expatriates.

Kuwait’s evolution in the near future is highly uncertain. The new Emir of Kuwait, Mishal Al-Ahmad Al-Jaber Al-Sabah, who came to power at the end of 2023, decided to dissolve parliament and take over some of its prerogative after a parliamentary election won by the opposition, and it is not clear when new elections will be held. The Emir and parliament have to resolve their differences if Kuwait is to remain an important beacon of democracy in the region, continue to build on its track record on civil liberties, and fully embark on a process of economic transformation that can deal with the approaching end of the oil era.

Morocco

Rabah Arezki argues that Morocco has substantially improved in all institutional dimensions during the last three decades, but there are many areas in which the country needs to continue its reform effort toward fully free and open institutions. On the economic front, the most positive progress is found in women’s economic freedom, with the implementation of a new Family Code, known as Moudawana, in 2004. This piece of legislation is seen as one of the most progressive of the region, expanding women’s rights and protections in relation to civil liberties as well as labor and economic aspects. The political environment in Morocco is freer than in most other countries in the region, but again it is still far from the most advanced countries of the world.

The danger for Morocco is to remain stuck in a so-called middle-income trap with low growth and high poverty, which could further ignite social tensions. To reignite growth and transform its economy, Morocco must level the playing field. To do so, issues of market structure and competition must take on greater importance. Additionally, further efforts are needed to balance its economic development, as poverty remains pervasive, especially in rural areas. An important limitation is the relatively high level of debt, which constrains government spending to reduce spatial disparities and support poorer households.

Nigeria

The case of Nigeria illustrates how the challenges of democratization in weak capacity states are exacerbated in resource-rich countries. Zainab Usman explains how the democratic transition of 1999 has been followed by volatile institutional progress, by no means free of inconsistencies. On the economic side, the relevance of the oil industry in generating government revenue and foreign reserves motivates important movements in the legal environment and overall economic policy decisions, and has many times led the government and central bank to heavily intervene in the exchange rate market.

Regarding the rule of law, Nigeria desperately needs a total overhaul of its civil service to tackle corruption and bureaucratic inefficiency. The security situation is also delicate, with ongoing violent conflicts (with Islamists Boko Haram in the north- east, and the separatist movement Indigenous People of Biafra in the southeast) and rising levels of violent crime, including kidnapping for ransom, in various parts of the country. The next few years will tell if the democratic mechanisms that are strong in Nigeria, like legislative control of the executive and freedom of the press, can help push forward efficiency-enhancing reforms that can lead to more balanced institutional development, ensuring increased prosperity for all Nigerians.

Peru

Liliana Rojas-Suarez argues that Peru is probably one of the clearest examples of the potential gap between written laws and their actual implementation and enforcement. In terms of the former, the country is comparable to the most advanced democracies of the world, but the degree of implementation and enforcement is far from such standards. As a result, deficiencies in the state’s capacity to deliver public goods and services, including ensuring security and the enforcement of law, significantly constrain the country’s potential for regaining economic growth and overall prosperity. The weakness of institutions and governance, reflected in excessive bureaucracy, corruption, and a weak and inefficient judiciary, hampers domestic and foreign private sector investment. While maintaining a stable macroeconomic framework is key, it is not sufficient to provide the certainty and security that investors need for long-term and productive investments.

Increasing institutional quality is thus a precondition for the economic reforms required to ensure long-run improvements in prosperity for all Peruvians. The country has an exceptional opportunity for growth in the green transition, given its abundance of crucial raw materials. Nonetheless, if Peru wants to position itself as a world leader in this area, some major reforms must be addressed first. Most importantly, the public sector needs to be able to execute large infrastructure investments and develop value chains related to green manufacturing, renewable energy, and eco-tourism; the country must address the issues of informality and low human capital of the workforce.

Poland

Poland stands as one of history’s most remarkable examples of how embracing democratic institutions and a free-market economy can radically transform a nation and propel it onto a trajectory of rapid development. Nonetheless, Leszek Balcerowicz outlines how the country has undergone a very serious challenge to its institutions in the last decade, with the “bad transition” represented by the accession of the Law and Justice Party (PiS) to power in 2015. On obtaining an ample majority in a free and fair election, the party led by Jarosław Kaczyński quickly revealed its authoritarian ten- dencies, beginning a period of institutional erosion. The most dangerous attack came against the judiciary. Legislative changes in 2016 merged the roles of prosecutor-general and minister of justice, granting a political appointee sweeping powers over the judicial system. Judicial independence similarly eroded under politicized appointment processes. Poland’s judicial system survived this assault primarily due to the vigorous defense mounted by civil society and advocacy groups, together with international pressure, especially by the European institutions.

The positive side of the turbulent tenure of the PiS government is that support for democracy and the rule of law has strengthened in Poland, so there is little concern about the institutional stability of the country after the executive change of 2023. Instead, the more pressing issue lies in sustaining economic growth. One main priority should be a carefully planned privatization schedule that can complete the process initiated in the 1990s, enhancing competition in sectors like energy and oil processing. Another major challenge is excessive fiscal spending, largely driven by social welfare programs. Finally, Poland shares demographic challenges with other developed nations, particularly the rapid aging of its population. Without substantial reforms, economic growth is likely to slow further, and fiscal pressures will intensify.

Spain

Toni Roldán Monés explains how Spain experienced an enormous transformation since the democratic transition of 1975–78, not only in political terms but also on the economic front, completing a successful integration into the European single market and the European Economic and Monetary Union. Nonetheless, the last three decades have not been free of challenges. The two biggest have been the dramatic economic effects of the bursting of the real estate bubble in 2008, with the subsequent sovereign debt crisis, and the Catalan independence attempt in 2017. The former led to an extremely difficult social situation, with unemployment reaching 27 percent, and the imposition of severe austerity measures. However, the crisis also generated significant impetus for reform, which seems to have halted in the last decade. The secessionist challenge showed the strength of the democratic institutions in Spain, especially the judiciary, which was able to resolve the crisis with a firm and strong response according to the legal provisions and constitutional powers granted to the different branches of power.

Looking ahead, a main source of concern is whether the windfall represented by the NextGenerationEU funds—of which Spain, together with Italy, is the largest beneficiary—may translate into insufficient structural reform. The relaxation of political constraints thanks to the apparently easy availability of resources, both external and internal, could lead to a complacency trap, hampering the impetus for reform.

The most pressing challenges Spain faces include: ensuring fiscal sustainability, especially regarding the pension system; a profound over- haul of the education system with the clear aim of improving its quality at all levels; and reform of the federal system, setting up clearer rules regarding the relative powers of the regions and the central government, and the establishment of the necessary coordination mechanisms to ensure the efficient collaboration of all levels of government.

Unfortunately, the political climate of polarization and fragmentation, together with incipient signs of institutional erosion, is not the best environment to carry out such an ambitious set of structural reforms. Regaining the capacity to reach agreements among those with different political views, which Spain exemplified during the demo- cratic transition, will be a necessary condition.

Taiwan

Taiwan’s story in the last three decades is a good example of how democracy can serve as a catalyst for improvements in the other two institutional dimensions. Shelley Rigger argues that the completion of the long, incremental process of democratization led, by the end of the 1990s, to a substantial increase in the accountability of political leaders and public officials at large, improving the overall capacity and efficiency of the public sector to enforce and abide by the law. Similarly, Taiwan’s strong performance in terms of investment and trade freedom was complemented by an extraordinary improvement in gender equality in economic matters, likely explained by the increasing political representation of women.

Unfortunately, the future of freedom on the island does not depend on the Taiwanese people alone. The relationship with the People’s Republic of China (PRC) is by far the largest risk, and will likely determine the evolution of political and economic freedom, as well as Taiwan’s prosperity in the next decade. The PRC opposes both Taiwan’s continued self-government and its democratic system. It is impossible to predict how the geo- political situation may evolve, but the PRC seems determined to bring Taiwan to heel, peacefully if possible, but by force if necessary. So far, the two sides have managed to avoid conflict, in part because the costs and risks of forcible unification are high, and in part because Beijing believes it can prevail without force eventually. It is likely that this stalemate will continue in the near future. If it does continue for the next five to ten years, the situation may evolve to a point where a mutually acceptable arrangement is possible. Or it may not, in which case Taiwan’s democracy will continue to exist under constant threat.

Venezuela

Venezuela seems to exemplify the Hayek-Friedman hypothesis that democracy is incompatible with a socialist economic system. As Sary Levy- Carciente argues, Venezuela’s poor performance in the twenty-first century can be attributed to the political and ideological project known as “socialism of the twenty-first century,” an economic model marked by excessive populism and state intervention, where economic activity and entrepreneurship are severely hampered by wide- spread government interference, inconsistent regulatory enforcement, and a heavy bureaucratic burden. Plummeting economic freedom has been accompanied by a dramatic erosion of political and legal freedoms in Venezuela, driven by the consolidation of executive supremacy, the increasing role of the military in controlling and implementing government policies, and the rise in corruption and lack of transparency, bypassing legal accountability standards.

The sustained deterioration of Venezuela’s political system was epitomized by the crisis following the presidential elections of July 2024, leaving no doubt regarding the autocratic nature of President Nicolás Maduro’s current political regime. As a result, Venezuela finds itself at a crossroads. Two future scenarios can be envisioned: one in which the current regime eliminates any sign of a liberal democracy, resulting in further increases in oppression and poverty; or a diametrically opposed one in which the reestablishment of Venezuela as a liberal democratic republic, anchored in Western values of freedom, individual dignity, and prosperity, leads the country to reclaim its stabilizing role in the Western Hemisphere.

Ignacio P. Campomanes is a nonresident fellow at the Navarra Center for International Development (University of Navarra, Spain) and a senior adviser at the Atlantic Council’s Freedom and Prosperity Center. Campomanes holds a BA in economics and a BA in law from Carlos III University in Spain, MA degrees in economics from Complutense University of Madrid and the University of Minnesota, and a PhD in economics from the University of Minnesota.

Annie (Yu-Lin) Lee is the program assistant at the Atlantic Council’s Freedom and Prosperity Center. Previously, Lee served as a research assistant at Academia Sinica, Taiwan’s national research institute, where she focused on US policy toward Taiwan and China. Her work has been featured by the American Political Science Association, the US-China Perception Monitor, the Carter Center, and the Atlantic Council. She holds a BA in diplomacy from National Chengchi University in Taiwan.

Joseph Lemoine is the senior director of the Atlantic Council’s Freedom and Prosperity Center. Previously, he was a private sector specialist at the World Bank. Lemoine has advised governments on policy reforms that help boost entrepreneurship and shared prosperity, primarily in Africa and the Middle East.

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1 On the conceptualizations of democracy, see for example Jørgen Møller and Svend-Erik Skaaning, Requisites of Democracy: Conceptualization, Measurement, and Explanation (Abingdon and New York: Routledge, 2011). For an overview of rule of law definitions, see Brian Z. Tamanaha, On the Rule of Law: History, Politics, Theory (Cambridge, UK: Cambridge University Press, 2004).

2 Indexes such as the Freedom House Freedom in the World report, the Fraser Index of Economic Freedom, and the World Justice Project Rule of Law Index, among others, all use the simple addition or arithmetic mean of their different areas/components to arrive at the overall score. This implies perfect substitutability.

3 See for example Vanessa A. Boese-Schlosser and Markus Eberhardt, Which Institutions Rule? Unbundling the Democracy-Growth Nexus (Gothenburg: V-Dem Institute, 2022); Sharun W. Mukand and Dani Rodrik, “The Political Economy of Liberal Democracy,” The Economic Journal (2020), 130:627.

4 A classic reference is Samuel P. Huntington, Political Order in Changing Societies (New Haven, CT: Yale University Press, 1996). A recent example is Michelle D’Arcy and Marina Nistotskaya “State First, then Democracy: Using Cadastral Records to Explain Governmental Performance in Public Goods Provision,” Governance (2017), 30:2

5 Max Weber defined the state as an entity that holds a monopoly on the legitimate use of physical force within a given territory. The state apparatus encompasses the institutions and structures through which the state enforces laws, maintains order, and implements policy, including the bureaucracy, military, and legal system. Max Weber, “Economy and Society” (1922) in Economy and Society, Vol. 1, eds. Guenther Roth and Claus Wittich (Berkeley, CA: University of California Press, 2023)

6 See Rainer Kotschy and Uwe Sunde, “Democracy, Inequality, and Institutional Quality,” European Economic Review (2017), 91; or Tim Krieger and Daniel Meierrieks, “Political capitalism: The Interaction between Income Inequality, Economic Freedom and Democracy,” European Journal of Political Economy (2016), 45

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Pavia joins i24 News to discuss the 14th anniversary of Tunisia’s revolt during the Arab Spring

Atlantic Council — Tue, 25 Feb 2025 18:13:57 +0000

The post Pavia joins i24 News to discuss the 14th anniversary of Tunisia’s revolt during the Arab Spring appeared first on Atlantic Council.

From Tunis to Baghdad: Can platform-based politics take root?

Carrie Schenkel and James Storen — Mon, 24 Feb 2025 19:30:13 +0000

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This paper is the fifth in the Freedom and Prosperity Center’s “State of the Parties” series analyzing the strength of multi-party systems in different regions of the world.

The organization of political parties has served multiple distinct roles in the Middle East and North Africa (MENA). In many cases, regimes use them to create a light veneer of democratic legitimacy for authoritarianism; in other cases, parties exist to represent one identity group or are centered around a singular individual. In rare cases, but with a few successful examples, parties exist to represent an ideology. Rarer still, but key to the future democratic success of the region, are true platform-based parties. Vacuums of political leadership have developed due to the limited role parties play in shaping governance, representation, and public policy. In a rapidly changing region, the opportunity for effective, issues-based parties has never been more evident. Iran’s proxies in the region have been significantly weakened and the “Axis of Resistance” dismantled, presenting openings for new political leadership to emerge.

Political parties are not yet poised to meet the moment. In much of the region, long histories of implicit and explicit bans and one-party dominance have left political parties weak, unpopular, and ineffective. Extended periods of suppression and restriction—such as Jordan’s thirty-year party ban, Iraq’s decades of one-party rule under Saddam Hussein, and Tunisia’s twenty-three years of party bans during the Ben Ali era—have resulted in political parties that lack both organizational capacity and broad public appeal. Rather, they are fragmented, ideologically vague, and centered around individuals rather than coherent platforms.

The proliferation of political parties—more than 220 are currently registered in Tunisia, for example—has further undermined any sense of clear policy platforms and the ability to differentiate one party from another. Rather than reforming or uniting under existing frameworks, disillusioned members frequently break away to form new parties, stymieing coalition-building and the development of rooted, comprehensive party ideologies.

Disillusionment with traditional parties has led citizens to favor actors perceived as more directly serving their interests, such as Hezbollah—which positions itself as a resistance force against Israel—or Muslim Brotherhood-affiliated parties, which have gained trust through their provision of essential social services in Egypt, Jordan, and elsewhere. In an era defined by youth-led movements, digital activism, and persistent calls for democratization, these parties stand at a crossroads. Whether they act as agents of change or instruments of entrenched power remains a central question, shaping not only the future of governance within individual nations but also the trajectory of regional stability and development.

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The post From Tunis to Baghdad: Can platform-based politics take root? appeared first on Atlantic Council.

Trump and Putin seek economic reset but businesses may not rush back to Russia

Edward Verona — Thu, 20 Feb 2025 22:19:02 +0000

As the Trump administration seeks to reset relations with Russia as part of a peace process to end the war in Ukraine, Moscow is pushing the idea of increased economic cooperation. During landmark bilateral talks in Saudi Arabia earlier this week, the Russian delegation included the Kremlin’s top investment manager, Kirill Dmitriev, who heads Russia’s sovereign wealth fund. Dmitriev explained that US companies had lost more than $300 billion since 2022 due to withdrawing from the Russian market. Meanwhile, Russian Foreign Minister Sergei Lavrov reported “great interest” among participants “in removing artificial barriers to the development of mutually beneficial economic cooperation.”

This approach seems tailored to appeal to US President Donald Trump, who has since spoken favorably about the potential economic upside of a thaw with Russia. However, it remains to be seen whether foreign companies will be eager to return to Russia, given the experience of the past three years. Since Russia’s full-scale invasion of Ukraine began in February 2022, more than a thousand international companies have exited the Russian market. Others have had their assets seized. Companies mulling renewed operations in Russia will have to weigh up the potential profits again a lack of property rights and other risks that could end up costing shareholders.

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With few exceptions, international companies that left Russia in the aftermath of the full-scale invasion walked away from subsidiaries worth millions or billions of dollars. It is safe to assume that the majority had to write down most, if not all, of the value of their investments in Russia. Some companies managed to sell assets, often to Kremlin cronies at knock-down prices. A few retained an equity interest in the hopes of an eventual rebound in the market. Virtually nobody emerged unscathed.

Companies left Russia in the aftermath of the invasion for a variety of motives. To their credit, some simply found it morally indefensible to remain there while Russia’s tanks rolled across international borders and its troops committed war crimes in Ukraine. Many businesses were less concerned about the morality of continuing to operate in Russia, but were nevertheless sensitive to guilt by association and possible damage to their reputation. Others weighed the benefits of staying in Russia against the cost of complying with international sanctions.

The companies that left Russia for moral reasons are unlikely to go back in the foreseeable future. This is also the case for companies seeking to safeguard their brand reputations. However, when the pickings seem rich, some may jump at the opportunity or bottom fish for low-priced assets. If another reset in US-Russian relations comes about, the United States government might provide inducements for a resumption of bilateral business ties, such as export credit guarantees, political risk insurance, and official backing for equity participation in major projects.

Taking another chance on Russia might seem appealing to some. After all, memories can be short in the business world. It is easy to imagine a new wave of corporate titans overlooking the lessons that a previous generation of expat CEOs learned during the last period of enthusiasm for expansion into Russia. Before proceeding, however, they would be well advised to study the current realities. Today’s Russia is not the country of Boris Yeltsin, who saw the West as a partner. It is not even the Russia of the early 2000s, before Vladimir Putin had fully consolidated his grip on power and completed the transition from fledgling democracy to authoritarian regime. After twenty-five years of Putin’s rule, the Kremlin now dominates all aspects of Russian life, including the country’s business climate.

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As a diplomat and business executive in Moscow in the 1990s and 2000s, and later as head of the US-Russia Business Council, I had a front row seat to the evolution of Russia from a centralized, state-controlled economy into a free market with a vibrant private sector, followed by its devolution into an oligarch-controlled system that more closely resembled a organized crime syndicate than a developed economy. During this period, I encountered a wide range of investors seeking advice or support in coping with the predatory conduct of Russian business partners or the Russian state.

Back then, there was a tendency to attribute most of the problems facing international companies in Russia to the growing pains of an economy emerging from communism. However, the signs of institutionalized corruption gradually became undeniable, including the imprisonment of business leaders and the seizure of companies by state-linked groups. These issues have not gone away; in many cases, the challenges have become even greater.

If a peace agreement is forthcoming, senior executives in Europe and North America will have to assess whether the potential profits from renewing operations in Russia are worth the many risks this would involve. Will major international oil and gas companies that previously invested in Russia want to return to a country where the state must hold a majority stake in any project, and where they are required to sell their gas to a state monopoly? Will any investor want to be at the mercy of the Russian judicial system?

The non-Russian staff of international companies may also not be entirely safe living and working in Putin’s Russia. In recent years, the Kremlin has been accused of arresting numerous foreign nationals on dubious charges in order to use them as bargaining chips in negotiations for the release of Russian criminals and spies being held in Europe and the United States. Any businesses that choose to send staff to Russia will be well aware that they cannot count on the rule of law if their employees become pawns in Moscow’s geopolitical games.

The Kremlin’s efforts to entice Trump with the prospect of mutually beneficial business cooperation make sense. Russia certainly has much to offer, including a vast domestic market and access to unrivaled natural resource wealth. However, it would be naive to expect individual companies to immediately rush back to Russia in light of the very real concerns that exist over the rule of law and the overbearing influence of the Kremlin on the country’s business environment.

Edward Verona is a nonresident senior fellow at the Atlantic Council’s Eurasia Center covering Russia, Ukraine, and Eastern Europe.

With anti-government protests still taking place in cities across Georgia on an almost daily basis, the authorities have also recently introduced new laws limiting public gatherings and criminalizing minor protest actions such as placing stickers on public property. Since protests flared in late 2024, hundreds have been detained, with many reporting human rights abuses while in custody including beatings and torture.

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Critics say these latest steps serve as further confirmation of the Georgian government’s intention to establish a Kremlin-style authoritarian state. In early February, Transparency International Georgia executive director Eka Gigauri told the Associated Press that she believed the authorities were using the same tactics employed by the Putin regime against opponents. “There is nothing new in how they attack civic activists,” she said. “This was happening in Russia years ago.”

Similar sentiments have been expressed by international human rights watchdogs monitoring the current crisis. “The government is relentlessly taking the country into a repressive era that is uncharted for Georgia but all too familiar in authoritarian states,” commented Human Rights Watch Europe and Central Asia Director Hugh Williamson in January 2025.

In recent months, Georgia’s Western partners have become more vocal in their criticism of the country’s increasingly authoritarian policies and apparent turn toward Moscow. This Western response has included imposing sanctions against a number of Georgian officials including billionaire Georgian Dream founder Bidzina Ivanishvili, who is widely seen as the country’s de facto leader and architect of Georgia’s current pro-Kremlin policies. On February 13, the European Parliament adopted a resolution questioning the legitimacy of the current Georgian authorities and calling for fresh elections in the coming months monitored by international observers.

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Meanwhile, relations with Russia continue to improve. Georgia has won favor in Moscow in recent years by refusing to participate in Western sanctions over the Russian invasion of Ukraine. Instead, Georgia has welcomed Russian businesses and has been accused of helping the Kremlin bypass international restrictions put in place in response to the war.

Members of the Georgian Dream party have positioned themselves as the only political force capable of establishing pragmatic relations with Russia. With around twenty percent of Georgia currently under Russian occupation, the threat of renewed Russian military aggression is a highly sensitive issue for Georgian society. In the run-up to Georgia’s October 2024 parliamentary election, Georgian Dream sparked controversy by using campaign posters contrasting peaceful Georgia with war-torn Ukraine as part of election messaging that sought to position the vote as a choice between war and peace.

With international attention now firmly fixed on developments in and around Ukraine, the political crisis in Georgia has slipped out of the headlines. However, this small nation in the southern Caucasus has a geopolitical significance that far outweighs its size. For the past two decades, Georgia has been widely seen in Western capitals as a post-Soviet success story, but the country’s Euro-Atlantic aspirations now hang in the balance. This represents a significant foreign policy challenge for the new Trump administration and for Europe.

Recent repressive measures indicate that the Georgian authorities are intent on escalating their clampdown against domestic opponents and strengthening ties with the Kremlin. If they succeed, it would represent a major victory for Vladimir Putin in the confrontation between the democratic world and an emerging alliance of authoritarian powers including Russia, China, Iran, and North Korea.

Mercedes Sapuppo is an assistant director at the Atlantic Council’s Eurasia Center.

Monopolization is stifling Kuwait’s economy—it’s time to rethink top-down policies

Rabah Arezki — Tue, 11 Feb 2025 17:00:00 +0000

Evolution of freedom

Evolution of prosperity

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Evolution of freedom

Kuwait’s parliamentary monarchy stands out in the region. Indeed, the country is by far the most open in the region, as evidenced by the ten- to fifteen-point differential with the average of the Gulf Cooperation Council (GCC) countries in the Freedom Index throughout the 1995–2023 period. The distance with respect to other monarchies in the GCC, namely Saudi Arabia or Qatar, is much larger, reaching 23.5 and 18.5 respectively. Kuwait’s political regime presents noticeable specificities that make it difficult to compare to the liberal democracies of the Western world. For example, relatively fair and free elections coexist with a ban on political parties, and the inviolability of the Emir is combined with a strong control of his government by parliament. That said, Kuwait’s democratic experience is positive and serves as an example for other countries in the region.

To understand the specificities of Kuwait’s political system, it is useful to explore the relative differences between the components of the political subindex. Perhaps the large difference that stands out is between the scores on elections and legislative constraints on the executive (both above 80 in the last two decades) on the one hand, and political rights (below 40 since 1995) on the other. High degrees of legislative control and restraints on the executive are typically not associated with unprotected political freedoms of association and expression. This is probably the most salient feature of Kuwait’s exceptionalism. Even though political parties are prohibited, explaining the low score on political rights, independent candidates compete in regularly held elections to the National Assembly. These individuals cover a wide spectrum of politics, such as the merchant class, urban progressives, Islamist movements and other tribal groups. These fifty elected members of the legislative body hold¹ significant power to approve and oversee the Emir’s appointed cabinet, and a majority of them must ratify all laws. The high score on legislative constraints on the executive does reflect a real feature of Kuwait’s political arrangement.

Finally, it should be noted that civil liberties are also significantly better upheld in Kuwait than in many of its neighbors, but these freedoms are not yet granted to important shares of the population, especially women. It is expected that the voting rights granted to women in 2005 will favor a gradual movement towards gender equality in all areas of social and political life, but progress appears to be slow.

It should be noted that Kuwait was ahead of its regional neighbors in terms of competitiveness and financial markets until the invasion by Iraq in 1990. Despite being liberated fairly fast, the effects of the invasion were traumatic for Kuwait, and the Iraq war(s) also produced a sense of uncertainty for foreign investors, on top of brain drain out of Kuwait. Indeed, the invasion steered Kuwait toward economic isolation. The country became less competitive and others such as Bahrain, the United Arab Emirates (most notably the emirate of Dubai), Qatar, and more recently Saudi Arabia have become economic powerhouses in the region. That said, the oil sector remains vibrant and an important source of foreign exchange receipts. Gross domestic product (GDP) per capita is still high, but economic reforms in Kuwait have stalled. The new Emir has put a focus on recovering the economic dynamism of the past; whether he succeeds will depend on his ability to formulate a vision for transformation, including to diversify away from oil, with the cohesive support of the population.

Turning to the legal subindex components, the low score on control of corruption may be at least partially capturing perceptions of corruption more than actual corruption. To be sure, issues of nepotism and monopolization of the economy are pervasive, although some efforts to limit dominance and corruption have been undertaken. The anti-corruption policy triggered by past high-profile scandals may have had unintended consequences up to today. In other words, anti-corruption measures have been divisive and politicized. They also introduced important delays and disruptions in the attribution of public works projects, which are important for bolstering the Kuwaiti economy.

Informality is low in Kuwait. It should be noted that the labor market is highly polarized, with higher-skilled workers on one side and lower-skilled workers who are mostly expatriates on the other. Kuwaitization policies have been put in place to favor Kuwaitis, especially for higher paid jobs. Kuwait, like many countries in the GCC, relies heavily on expatriates for both high- and low-skilled jobs, especially for the latter whose elasticity of labor supply is very low. Concerns about the treatment of low-skilled expatriates have been an important issue in the GCC. In Kuwait, the situation for foreign workers is relatively better on account of higher levels of freedom of religion and other civil liberties.

Lack of gender equality is clearly evident in the women’s economic freedom component of the economic subindex, where Kuwait receives the seventh lowest score among the 164 countries covered. As in other countries in the region, traditional norms heavily affect the situation of women, especially in areas related to economic issues for married women. While traditions weigh in on women’s rights, resource abundance—especially oil—has been an important factor influencing the relative position of women in society. In an influential paper, Michael Ross1 provided evidence that the oil sector, being capitalistic, is not intensive in labor and hence demands less female labor than other sectors. In turn, oil-rich countries have substantially lower female labor force participation than oil-poor ones (for example, compare Algeria with Morocco), which in turn reduces women’s political voice and influence. As a result, these countries are left with strong patriarchal norms, laws, and political institutions. This explains the fact that the ten countries at the bottom on women’s economic freedom are Middle East countries with relatively high oil reserves.

Evolution of prosperity

The Prosperity Index illustrates the relative economic stagnation of Kuwait in the last two decades. Moreover, focusing on income per capita as a measure of prosperity, the country has been on a decreasing path since the Great Recession. Decreasing oil prices in the last ten years obviously play an important role, but Kuwait’s sluggish economic performance is not circumscribed to the oil sector. Kuwait has had difficulties attracting foreign investment in the same way it used to do during the 1980s, which should be a crucial priority in the coming years.

Inequality among Kuwaiti citizens may not be so large, due to the very substantial scheme of subsidies and redistributive transfers financed by oil rents, but the real source of inequality lies between national and foreign workers. When foreign workers are considered, any inequality statistic drastically worsens for the country. That situation is likely to persist in the future, even though it would be in Kuwait’s interest to protect workers better in all respects, as the spread of COVID-19 has made the interconnectedness clear.

In terms of education, there has been a significant effort to reform the system in order to ensure universal enrollment and increase the average years of schooling, which is adequately reflected in the data used by the Prosperity Index. Nonetheless, the current deficiencies of Kuwait, as well as other countries in the region, are about quality of education more than just quantity. The old social contract whereby the youth would get a high-paying job, mostly in the public sector, is no longer viable given f iscal restraint. It is thus all the more important that Kuwait furthers its efforts to improve education quality to allow Kuwaitis to perform outside the public sector.

The data on health show a significantly harder negative shock due to COVID-19 in Kuwait than in the rest of the region. This is surprising as, in general, the healthcare system of Kuwait is high quality. Comorbidity may have been an important factor. Also, importantly, foreign workers were not as well protected as nationals during the pandemic, and the death rate may have been significantly higher among this group. The overall assessment of the healthcare system of Kuwait remains positive, even though our data reveal an element of duality in the system which could have systemic effects.

Kuwait has several environmental challenges that may be overlooked by the indicator used in the Prosperity Index; such as sandstorms, which are detrimental to health, especially for pregnant women and people with respiratory diseases like asthma; or access to water. But obviously the main concern is the oil industry. The relatively good score obtained by Kuwait can be related to the fact that oil extraction does not account for a majority of the emissions produced by fossil fuels, but these are “exported” to the rest of the world, where actual oil consumption takes place. That said, large economies importing oil are as much to blame for emissions related to hydrocarbon use as oil exporters like Kuwait.

Finally, the minorities component needs once again to be adequately situated in terms of the point of comparison. With respect to the rest of the Middle East and North Africa region, Kuwait performs relatively well, as it is considerably more tolerant regarding freedom of religion and other civil liberties. Moreover, even if imperfect, the democratic mechanisms described above favor an egalitarian treatment of different social groups. Anyhow, if we compare Kuwait to well-established democracies in Europe or North America, the gap is still substantial, including in the area of gender equality.

The path forward

The new Emir of Kuwait, Mishal Al-Ahmad Al-Jaber Al-Sabah, came to power after the death of his brother at the end of 2023. After parliamentary elections, which were won by opposition candidates, the Emir decided to dissolve parliament and take over some of its prerogative. The dissolution is the culmination of long-standing tensions between parliament and the Emir. Notwithstanding there have been dissolutions in the past, that move by the Emir raises uncertainty about the future of democracy in Kuwait. There is also uncertainty on the horizon over which new elections will take place. The Emir has justified his actions on account of a gridlock over important issues related to the tackling of corruption and economic diversification of the economy. The Emir and parliament have to resolve their differences, so Kuwait remains an important beacon of democracy in the region and continues to build on its track record on civil liberties as well as making needed improvement on laws regarding women.

Besides these important political tensions needing resolution, Kuwait should embark on economic transformation. Indeed, the end of the oil era is looming and makes transformation imperative. Kuwait is known to be home to the world’s first sovereign wealth fund which aims to safeguard the economy from fluctuations in oil prices and support the welfare of future generations. Despite having been ahead of the pack, Kuwait has struggled to transform its economy. Other countries in the region have taken the lead, which should inspire Kuwait. Dubai, for example, facing the depletion of its oil reserves, transformed itself into a global trade and financial hub and is acting as a magnet for companies’ headquarters in the region and beyond. That said, Kuwait, like most countries in the Middle East and North Africa region, is plagued with the issue of economic concentration and monopolization. That excessive concentration limits innovation and slows down productivity, in addition to frustrating entry into different sectors. Oil export revenues, which constitute almost the entire source of foreign exchange receipts, finance imports and other non-tradable services. Unfortunately, the monopolization of these sectors has stifled the economy and benefits a small business elite.

To transform, Kuwait needs to address a myriad of institutional deficiencies, such as pertaining to corporate governance, legal systems, and competition. For example, large public sector employment financed by oil revenue has stifled the impetus for innovation. Economic policies that are not geared toward changing attitudes are unlikely to deliver the needed transformation agenda for Kuwait. Saudi Arabia aims to augment the longtime source of its riches with non-oil income. As part of its ambitious plan to transform its economy, the country issued a public offering of a minority share of the state-owned oil company, Aramco. That is a step toward emulating publicly owned companies in advanced economies, such as Exxon or British Petroleum—which once concentrated on oil, but broadened their focus to become energy companies, balancing their oil assets with other forms of energy.

The focus on the end goal of diversification has too long kept countries like Kuwait from getting the process right. Transformative policies should move away from top-down approaches that pick which sectors to develop. Instead, they must develop an environment that promotes demonopolization and changes the incentives of managers and tech-savvy young entrepreneurs and helps them, their firms, and ultimately the whole economy reach their potential.

Rabah Arezki is a former vice president at the African Development Bank, a former chief economist of the World Bank’s Middle East and North Africa region and a former chief of commodities at the International Monetary Fund’s Research Department. Arezki is now a director of research at the French National Centre for Scientific Research, a senior fellow at the Foundation for Studies and Research on International Development, and at Harvard Kennedy School.

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Cameroon’s future relies on empowering its women

Vera Songwe — Mon, 10 Feb 2025 17:00:00 +0000

Evolution of freedom

Evolution of prosperity

The path forward

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Evolution of freedom

Indexes are only as good as the data they use and the methodology they follow. However, for Africa, indexes are an important determinant of how citizens perceive progress in the country, how bilateral donors make decisions on when, where, and how to extend support, and, lately, they are a fundamental component of rating agency assessments. As African countries seek to improve access to more affordable capital and crowd in more foreign direct investment, it is crucial that they pay attention to these indexes. Cameroon is no exception. In addition, indexes can provide rare insights into the linkages between issues such as environmental freedom and gender prosperity. The data on Cameroon suggest a strong link between economic freedom, health, education, and gender empowerment. This essay will focus on that and draw lessons for the future.

Cameroon’s score in the Freedom Index (47.6) is well below the average for the African continent (64.03) and many similar countries such as Senegal (68.7) and Côte d’Ivoire (61.7). The overall freedom measure is a composite score of the legal, political, and economic subindexes, where Cameroon ranks 133rd, 120th, and 144th respectively, out of 164 countries covered by the Indexes.

Cameroon’s poor performance in the Freedom Index since 1995 is mainly determined by the political and legal dimensions. The political subindex includes four main components: elections, political rights, civil liberties, and legislative constraints on the executive. Political power is centralized in Cameroon, unlike Senegal, for example, and as a result there is no effective system of separation of powers, with both legislative and judicial branches being dependent on the executive power. The level and trend of different components of the Index capture this general assessment.

The low levels of legislative constraints on the executive and judicial independence, compared to Côte d’Ivoire, for example, reflect the high level of concentration of power in the executive. The judiciary is subordinated to the Ministry of Justice, and the president is entitled to appoint judges (this is not unlike the United States but the degree of independence of the judiciary is also about implementation of policies) and only the president can request the Supreme Court to review the constitutionality of a law. Regarding the legislative, the formation of political parties has been permitted since 1997, and political rights are protected by law. Parliament is also highly dependent on the presidency, which appoints thirty out of the one hundred members of the Senate, the second legislative chamber established in 2013.

Strong executive power could and should actually benefit women’s economic freedom but currently does not. There are spillovers from the political subindex to other aspects of the institutional framework of Cameroon. This is visible in the economic subindex, which measures trade and investment openness, protection of property rights, and economic opportunities for women. Regarding the latter, Cameroon’s score in the women’s economic freedom component (60) is—surprisingly—among the lowest in the world, ranking 140th among the 164 countries covered by the Indexes. Despite a ten-point increase in 2018, reflecting the introduction of legislation dealing with workplace nondiscrimination and sexual harassment, Cameroon’s performance in this component is still significantly lower than that of other countries in the region, such as Côte d’Ivoire (95), Senegal (72.5), Nigeria (66.3), Gabon (95), and Kenya (83.8).

Important areas affecting gender equality, where Cameroon does not yet grant legal protection similar to the countries mentioned above, include civil liberties such as freedom of movement and marital rights, and financial inclusion legislation regarding access to banking services, asset ownership, and administration. While implementation of some of the more restrictive legislation may differ from the reality on the ground—for example, women can own property in their name today—the lack of changes to the legal documents opens the door for predatory compliance and legal battles in some cases.

Having women in government leadership positions has led many countries in the region to advance significant improvements in women’s rights and opportunities. One illustrative example is the case of Ngozi Okonjo-Iweala in Nigeria, who introduced several policies aimed at empowering women during her periods as finance minister (2003–06 and 2011–15), such as the Growing Girls and Women in Nigeria (G-WIN) program. This created a gender-responsive budgeting system that ensured a certain share of public procurement went to female entrepreneurs. Similar legislation can be identified in Kenya, with the Access to Government Procurement Opportunities program introduced in 2013, as well as in Côte d’Ivoire and the Democratic Republic of the Congo. Adopting some of these tried and tested programs in Cameroon could help improve women’s economic freedom de jure and de facto.

Cameroon’s commitment to open and free trade is ambiguous, despite its very strategic location. Total trade to gross domestic product (GDP) has decreased substantially in the last decade, from 50 percent in 2014 to 39 percent in 2023, well below the average for Africa (74.49 percent). On the one hand, the country imposes relatively high tariffs on imports besides primary necessity goods, established at 10 percent for raw materials and equipment goods, 20 percent for intermediary and miscellaneous goods, and up to 30 percent for fast-moving consumer goods, implying an average tariff rate around 18 percent, more than double the average for Africa. With women being the most active small and medium entrepreneurs in cross-border trade, 20 percent tariffs have the potential to disproportionately affect them as a group.

On the other hand, Cameroon has signed trade agreements with the European Union, United States, China, Japan, and several other nations. In 2020, the country also ratified the African Continental Free Trade Area Agreement, the signature African trade agreement. Cameroon is also a member of the Economic and Monetary Community of Central Africa, which aims a common market among Central African countries. Nonetheless, Cameroon has a negligible trade relationship with Chad, Equatorial Guinea, Gabon, Central African Republic, and the Democratic Republic of the Congo, the other five member states. More generally, inter-Africa trade is still marginal, with only 12.7 percent of Cameroon’s export earnings coming from African partners, and less than 10 percent of total imports in 2023. For example, Cameroon’s trade with Nigeria—the largest economy in Africa—was less than 1 percent in 2021. The two countries having difficult and high tariffs undermines their collective prosperity. Policies to improve trade between the two countries will also disproportionately support small women-owned businesses.

The most relevant factor regarding investment and capital movement regulations in Cameroon is the fact that the national currency, the Central African CFA franc, is shared by the five neighbors mentioned above, and is pegged to the euro at a fixed exchange rate. This has the benefit of providing stability and predictability but also constrains Cameroon’s capacity to autonomously determine its monetary, investment, and capital flows policies. Another factor certainly influencing the investment climate in Cameroon is the security situation in the country and the region. With low tariffs in the sector, foreign capital continues to focus on extractive industries and infrastructure, and the repeated efforts of the government to expand international investment to other sectors have not borne the expected fruits.

Two other features of Cameroon’s institutional framework stand out in the legal subindex components, namely, the high levels of corruption across all levels of the administration, and the low level of security. Both of these unduly penalize women, who are generally the most affected by conflict and petty corruption.

Cameroon is host to a large number of refugees as a result of the conflict in the subregion, and this has impacted civil liberties. With respect to security, relatively high levels of small criminality have combined with a surge in terrorist attacks, especially in the last decade, with the emergence of Boko Haram and other Islamist groups, as well as the unrest in the north and southwest of the country. These different violent conflicts, together with the substantial immigration flows coming from Nigeria, Libya, Central African Republic, Chad, and other neighboring countries, have increased the need for tighter security within the country.

Evolution of prosperity

On the Prosperity Index, measured as the average of six constituent elements (income, inequality, minorities, health, environment and education), Cameroon performs better than its peers but still remains below the African average. The country has outpaced the low regional average in prosperity growth at least since 2005. Education, health, and environment seem to be the areas where improvements have been most palpable, and will be the focus of the following paragraphs.

The health component of the Prosperity Index, based on life expectancy data, shows a change of tendency around the late 1990s. This is not a feature unique to Cameroon; a similar inflection point from decreasing to rapidly increasing life expectancy is also observable in other African countries such as South Africa, Gabon, and Côte d’Ivoire. An important push in the fight against AIDS, substantially financed by programs led by the international donor community such as the US President’s Emergency Plan for AIDS Relief, was instrumental in this case. Additionally, the increased availability of vaccines for different diseases and some progress in terms of infant and maternal mortality have contributed to this positive evolution.

Nonetheless, there is still huge room for improvement. First, total public expenditure on health has been below 4 percent of GDP since 2001 (3.82 percent in 2021, the last year of available data), not yet close to the necessary level to ensure substantial and sustained betterment in health outcomes, usually estimated between 5 and 7 percent. For comparison, the average for Sub-Saharan Africa in 2021 is 5.1 percent, and for the Middle East and North Africa region reaches 5.76 percent. Similarly, health expenditure per capita in Cameroon was in 2021 just $155.56, substantially lower than in Nigeria ($220.40), Gabon ($411), or the average of the Sub-Saharan Africa region ($203.70).

Not only is aggregate spending relatively low, but also the destination of healthcare investment is not optimal. In the last decades, Cameroon has consolidated a series of big training hospitals, mainly located in big cities. On the contrary, investment in primary and preventive healthcare has been deficient, especially in rural areas, creating wide inequalities across the country. Recent disease outbreaks underscore the need for improved strong healthcare systems at the local level. As for other least developed countries, the potential gains of basic health interventions to ensure generalized access to vaccination and maternal and infant care are enormous, as the experience of other African countries has shown.

Turning to education, the data on school enrollment show a very significant acceleration since the early 2000s, when Cameroon started to grow faster than the regional average. It is important to note the very low initial level of this indicator, but the progress is still remarkable. Free primary education was introduced in the year 2000, and this is probably one important factor explaining the trend in the last two decades.

Nonetheless, families still need to cover the costs of uniforms and books, which is a significant barrier for an important share of the population. Recall that, according to the World Bank, 23 percent of Cameroon’s population is today living in extreme poverty (under US$2.15 a day), and thus such costs are very significant for them. Moreover, secondary school tuition and fees are not subsidized, which constrains educational attainment for a much larger fraction of children.

Two areas requiring substantial improvement are, first, the poor quality of the education received, which undermines actual learning outcomes of Cameroonian students. Learning poverty, the share of children not able to read and understand an age-appropriate text by age ten, is estimated by the World Bank at a high 71.9 percent, with girls especially disadvantaged.

Second, there are important sources of educational inequality, particularly gender and regional based. School enrollment rates are significantly lower for girls than for boys at all levels of the educational system, heavily influenced by high rates of child marriage and early childbearing among girls.

The attempt to impose French curricula across the whole country led to heated debate, protests, civil unrest, and ultimately, violent clashes in some parts of the country. As a result, schools closed for two years (2018–19), and before they had fully reopened, the COVID-19 pandemic hit and schools were closed again. This combination of shocks has probably generated a very significant slowdown in educational attainment that is not yet captured by the data used in the Prosperity Index.

Cameroon’s score on the environment component is heavily influenced by one of the variables used to compute it: access to clean cooking technologies. Although this indicator has improved consistently in the last twenty-five years, from barely 10 percent of the population to almost 30 percent today using clean technologies, once again we observe striking spatial differences across the country and between rural and urban populations. Cameroon produces gas and therefore could rapidly improve on this indicator. New cooking stoves are widely available and easily diffused. The executive has the power to improve on this indicator and save lives while improving livelihoods.

Most importantly, the Prosperity Index does not include any indicator on deforestation, which is extremely relevant for Cameroon, which has the second largest forest area in the Congo Basin, from which many women earn an income.

The evolution of tree cover areas reveals a loss of 1.53 million hectares between 2001 and 2020, of which 47 percent was in primary forests. As a result, forest as a percentage of land decreased from 47.6 percent in 1990 to 43.03 percent in 2020. In 2021, Cameroon was seventh on the list of the world’s top deforesters, with 89,000 hectares of forest lost. This trend not only threatens to significantly alter weather and crop patterns in the country, affecting women disproportionately, but may lead to deteriorating health conditions as nature and Cameroon’s biodiversity are altered significantly.

This situation is by no means unavoidable but requires a clear policy commitment if it is to be averted. Cameroon has important gas reserves, and the low usage of wood by households in cities proves that there are possible alternatives. Obviously, providing access to gas and other forms of energy to rural areas requires an important investment in infrastructure and creation of logistic networks that are not yet in place, but certainly should be a priority for the government and the international community in the near future. Cameroonian women not only suffer from a very unequal legislative environment, but also due to structural conditions on these areas that further hamper their personal development compared to men.

The path forward

The strength of data lies in its capacity to tell stories and be scrutinized. The data on Cameroon need more attention and the authorities should work with the groups that collect the original data used to build these Indexes, along with the Cameroon National Statistics Office, development institutions, and other research institutions that collect data, to ensure representation of Cameroon is accurate, especially since these data are often used by market players to inform investment decisions.

In the interim, one crucial conclusion from the data is the interdependence between the health, education, and environment components and the women’s economic freedom component. This interconnectedness is a double-edged sword, as weak legislative focus undermines women’s economic empowerment, which leads to poor health and education outcomes and in some cases may also lead to environmental degradation.

Bottom-up or top-down policies could help move these indicators, building on the successes already achieved in these domains, first by focusing on laws that provide women with better economic empowerment. This essay has cited several examples of initiatives in other countries which could be adapted to fit the national context and implemented in Cameroon.

Education remains the fastest way to economic empowerment of populations and women in general. In the long run it can help reduce costs of healthcare as educated women tend to adopt more preventive approaches for themselves and their children, reducing the cost of healthcare which is not only high but still comprises lots of risks for women. To this end, the policy of free primary education must be coupled with robust teacher quality and performance indicators to ensure that children are actively learning. A year of lost learning, even if it appears free, is costly for teacher, student, and parent. This kind of waste undermines the economy in the long run as an unskilled population is an economic cost to the country over time.

Cameroon’s environmental resources, if well managed, could represent an important source of revenue for local populations and women in particular in an economic environment where carbon markets are growing, protection of fauna and flora is valued, and organic production commands a premium from markets. Support by government to reforestation projects could help generate resources for rural populations while promoting more nature tourism, building on the strengths of the country. An important component of the women’s health and environment nexus, however, would be policies which help women use cleaner cooking practices, as unsafe technologies claim the lives of many women.

Overall, the policies needed to improve the economic freedom components for women are well within reach of the Cameroonian government, as many are policy-based first and foremost. In addition, it would serve the government well to work with the Indexes to scrutinize the data and scoring so that they can provide a more accurate report on the economic freedom of women in Cameroon.

Vera Songwe is a nonresident senior fellow in the Global Economy and Development practice at the Brookings Institution and chair and founder of the Board of the Liquidity and Sustainability Facility. Songwe is a board member of the Mo Ibrahim Foundation and previously served as undersecretary-general at the United Nations and executive secretary of the United Nations Economic Commission for Africa. Songwe’s expertise includes work on Africa’s growth prospects in a global context, with a focus on improving access to sustainable finance.

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After the Monsoon Revolution, Bangladesh’s economy and government need major reforms

Ahmed Mushfiq Mobarak — Tue, 28 Jan 2025 14:15:43 +0000

Evolution of freedom

Evolution of prosperity

The path forward

Evolution of freedom

Movements in the Freedom Index suggest that the institutional environment of Bangladesh has experienced substantial volatility since the 1990s. After the democratic revolution of the early 1990s, the country had a period of credible elections with relatively peaceful alternation of power between the two main Bangladeshi political parties, the Bangladesh Nationalist Party (BNP) and the Awami League. The Index shows a clear institutional deterioration during the 2000–08 period, coinciding with governance approaches by both major parties that appeared to intensify unhealthy political competition. In an environment with escalating corruption, the leadership and allies of both parties intensely focused on holding onto power at all costs, leading to increased political tensions. Widespread corruption by those in power became the norm, and both parties became increasingly eager to hold on to power by any means necessary. The main political tool employed by a marginalized opposition was to impede the functions of government. In particular, calling general strikes with increasing frequency (and of longer duration) became the political weapon of choice for the opposition, to signal their street-level organizational capabilities to the government and to citizens. The strategy was deployed to erode the dominance of the party in government, but it came at the expense of the citizenry because it disrupted economic activity and the freedom of movement. An extreme example was to call general strikes to coincide with important visits by foreign investors exploring investment opportunities. This was designed to weaken the government and undermine its ability to attract investment, and it came at a high cost to the country’s economic prospects.

Escalating corruption and this form of destructive political competition created a situation of increased political instability up to 2006, when scheduled elections could not be held, and a military-backed caretaker government remained in power for two years.¹ The deep fall in the political subindex driven by a more than forty-five-point decrease in the elections component reflects this episode. The election score rebounds when elections that were widely considered free and fair were held in 2008. The Awami League received a supermajority as citizens used the 2008 election to express their deep discontent with the heightened corruption and misgovernance under the pre-2006 BNP regime. But the subsequent Awami League government, led by Sheikh Hasina, squandered the opportunity for improving governance. Instead, governance trends indicated a shift toward more centralized authority, as evidenced by a sustained decline in political and civil liberties scores. Examples of these autocratic tendencies include the abolition of the caretaker government system, widespread persecution of opposition political leaders accused of war crimes, and the rapid deterioration of citizens’ civil rights based on security concerns after terrorist episodes and an attempted military coup in 2012. Repression of both political opponents and ordinary citizens, more severe restrictions on speech, and increased government corruption became the norm. The Awami League exacerbated the type of misgovernance that had led the BNP to be voted out of office. Despite these concerns, the Awami League maintained in power for fifteen years amidst reports of increased political repression of citizens.

Elections held during the last fifteen years have been characterized by boycotts by the major opposition party and were not free or fair, so the relatively high election score assigned to Bangladesh in the political subindex is not an accurate reflection of the poor quality of politics and governance during this era. Elections followed a regular schedule, but it is difficult to see them as meaningful. Beyond the opposition election boycotts, the atmosphere of political violence and deep erosion of individual rights dramatically limited the level of contestation in the electoral process. Bangladesh’s extremely low score on legislative constraints on the executive partly explains why it was so easy for the Awami League to create an autocracy so quickly.

The legal subindex further confirms the erosion of the system of checks and balances necessary in a functioning democracy, clearly showing a negative trend in the two components that deal with the legal framework of the country: clarity of the law and judicial independence and effectiveness. The two-year caretaker government during 2006–08, and constitutional changes made by the subsequent Awami League government generated a state of legal uncertainty and insecurity. The twenty-point drop in the level of judicial independence since 2010 reflects the autocratic government’s efforts to control the judiciary to safeguard its hold on power and to use it as a weapon to persecute the opposition.

The improvement of the security component of stricter measures that curtailed some civil liberties. Mass protests and strikes, which were popular in the early 2000s, were no longer permitted, which resulted in a reduction in open street clashes and insecurity. But this also reflects political repression, so this clearly imposed costs on citizens. The data obviously do not yet reflect the mass student protests that began in July 2024, which ultimately resulted in the ouster of the autocratic government.

Also notable is the sustained improvement in Bangladesh’s informality score after 2005. The government made a big push towards digitalization of public services, including in tax administration. Digitizing third-party information improves the government made a big push towards digitalization of public services, including in tax administration. Digitizing third-party information improves the government’s ability to collect taxes, particularly Value Added Tax, which in turn limits firms’ capacity to operate in an informal shadow economy. This fact could also explain the small progress in bureaucracy and corruption observed in the data from 2004 to 2016, but it is important to stress that the level of this component is still exceptionally low for Bangladesh, not only creating discontent with the government and the state apparatus, but obviously generating substantial economic costs and inefficiencies.

Finally, the economic subindex evolution is driven by the movements in two components, namely trade and investment freedoms. The improvement in trade freedom in the late 1990s is a product of the adjustment programs imposed by the International Monetary Fund and the World Bank around this period, which forced a liberalizing process in several economic sectors. The ten-point fall in this component in 2013 is likely the result of stricter labor and workplace regulations implemented after the Rana Plaza disaster, which led to workplace injuries and deaths for hundreds of garment factory workers. Garment buyers in Bangladesh’s export destination countries pushed for these regulations. The sharp collapse of investment freedom between 2005 and 2008 is definitely capturing the political uncertainty of those years, and the rapid recovery when finally a government was formed captures the initial enthusiasm once the crisis was resolved.

It is important to comment on the surprisingly low level of women’s economic freedom observed in the data. Bangladesh scores almost eighteen points below the regional average in 2023, and the indicator only shows a mild improvement between 2007 and 2011. I think this might be explained by the distinction between the legal definition of women’s economic freedom versus actual practice. The real situation of women in economic affairs is probably better in Bangladesh than one would infer by looking at the formal legislation. For example, the Bangladeshi female labor force participation rate (39.5 percent) is significantly higher than in many neighboring countries such as India (29.9 percent) and Pakistan (25.9% percent), and the average for South Asia (30percent).² The rapid expansion of the garment industry in the 1980s and 1990s created many new job opportunities, especially for women. That improved returns to education for girls, which led to greater investments in girls’ schooling. Bangladesh achieved the Millennium Development Goal of gender parity in educational enrollment by 1995, fifteen years ahead of schedule. Girls’ primary school enrollment has exceeded that of boys since then. As a by-product, early marriage and early motherhood have decreased dramatically. These improvements in women’s economic opportunities do not seem adequately captured by the legalistic approach embedded in the World Bank Women Business and the Law Index which determines the quantitative score on this component.

Evolution of prosperity

The positive evolution of the Prosperity Index fairly reflects the situation of the country in the last three decades. Despite the institutional volatility and bad governance, Bangladesh has outperformed most regional neighbors economically, and this has closed the prosperity gap, especially since 2014. Scholars have referred to this as “the Bangladesh paradox.” Early improvements in health and educational indicators created the preconditions for economic growth. Bangladesh’s health and educational achievements exceed what the country’s income per capita would predict. The country has made substantial progress in material wellbeing, and unlike some other countries in the region, has not suffered a major economic crisis in the last three decades.

The flat performance of the inequality component of the Index may reflect a lack of detailed data. Economic growth in the country has been obviously urban-biased, with increased activity in sectors such as construction and infrastructure that have benefited cities more than rural areas. Those sectors are also heavily prone to corruption and graft, leading to massive wealth accumulation at the high end of the income distribution.

The health and education components of the Index show that Bangladesh’s improvement has outpaced that of its regional comparators since 1995. While school enrollment has massively improved since 1995, a measure of average years of education does not adequately capture the quality of learning that happens in school. Learning and human capital remain important challenges for Bangladesh today. I suspect that a quality-weighted measure of education would not present as optimistic a picture.

Considerable progress has been made in the health sector, thanks to a determined commitment to ensure child vaccination and access to maternal and neonatal healthcare. A vibrant non-governmental organization sector in Bangladesh has played a positive role to deliver basic services. Again, the quality of healthcare remains poor, and there are emerging areas of concern such as worsening mental health—an issue that needs greater attention from policymakers.

I think the evolution of the environment score masks two opposing trends. Increased economic prosperity in rural areas expands access to cleaner burning cookstoves and other technologies that protect environmental health. Much of the population has remained rural, which probably drives the aggregate positive trend of the indicator. However, in urban areas, outdoor air quality has clearly worsened with increased manufacturing and construction activities (including emissions from brick kilns), and the attendant loss of green space. Increasing prosperity has also led to a proliferation of motorized vehicles and increased congestion, and a lack of urban planning has allowed the urban living environment to deteriorate. These detrimental effects are not adequately captured by the component.

The path forward

An autocratic government that had steadily consolidated its power was finally ousted by a student-led “Monsoon Revolution” during the summer of 2024. The revolution was diffuse and decentralized— with organic student protests that quickly spread throughout the country—and was not organized under the banner of any political party. As a result, the post-revolution political leadership and the way forward remain unclear. Dr. Muhammad Yunus, the founder of the Grameen Bank and a Nobel Peace Prize laureate, took charge as “chief advisor to the caretaker government” at the behest of students. His international name recognition and stature make him a credible leader, and temporarily stabilized the political uncertainty. But as I write, the country’s political future remains uncertain.

Given the political instability and challenges that Bangladesh has faced, citizens are willing to give an unelected caretaker government some leeway and time to govern and reform political institutions. For the moment, all parties, the military, and civil society appear to have implicitly agreed and acknowledged that the caretaker government should remain in power for at least eighteen months, so that they have sufficient time to institute reforms. But important sources of uncertainty remain unresolved. First, the political parties, and especially the recently-ousted Awami League, may pursue strategies to regain influence, which could lead to political instability. Misinformation propagated by right-wing groups in India seems deliberately aimed at destabilizing Bangladesh by inflating fears of religious conflict. However, the impact of these efforts is not yet clear. Second, to maintain legitimacy, the caretaker administration will have to perform, since it does not derive legitimacy from any election. Governing a country with a population of 175 million is a complex undertaking. The bureaucracy and other government institutions, including public universities, were reportedly subject to political influence during the Awami League’s administration. This makes reform even more complex. Third, the power of Bangladeshi political parties has traditionally stemmed from grassroots and street-level organization, with a power hierarchy that extends into rural areas. The caretaker government and the students who led the July 2024 Monsoon Revolution do not have the same political infrastructure and organization.

Bangladesh is in uncharted territory. There is a lot of hope among average citizens that ousting a powerful autocratic government was a major achievement, and that the architects of that uprising can ensure better governance going forward, by instituting some fundamental reforms and not repeating the mistakes of the past. Whether those hopes of a nation can be successfully realized remains to be seen. Given how fundamental many reforms need to be, including a re-examination of several aspects of the country’s constitution, the path ahead is likely neither linear nor straightforward.

Ahmed Mushfiq Mobarak is a professor of economics and management at Yale University and the founder of the Yale Research Initiative on Innovation and Scale (Y-RISE). Mobarak conducts field experiments in Bangladesh, Sierra Leone, and Nepal to investigate the adoption of welfare-enhancing innovations and behaviors, and the scaling of effective development interventions. His research has been covered by major global media outlets and published in journals across disciplines. He received a Carnegie fellowship in 2017 and was named in Vox’s inaugural list of “50 scientists working to build a better future.”

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1 The caretaker government system of Bangladesh was introduced in 1996 to ensure a fair and free electoral process. An unelected interim government appointed by the incumbent executive would be tasked with organizing an election within ninety days, and hand over power to the newly elected government within 120 days. The system was abolished in 2012.

2 ILO estimates for labor force participation rates for females as a share of total female population aged 15–64, obtained from the World
Bank data portal.

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Experts react: What does Maduro’s third-term power grab mean for Venezuela’s future?

Atlantic Council experts — Fri, 10 Jan 2025 18:58:30 +0000

Meet the new boss, same as the old boss. On Friday, Venezuelan strongman Nicolás Maduro was sworn in for a third six-year presidential term, six months after an election widely viewed as stolen in Maduro’s favor. Vote tallies collected by the opposition after the election showed that opposition candidate Edmundo González, not Maduro, secured more votes. Ahead of Friday’s inauguration, the Maduro regime cracked down on dissent, including by temporarily detaining María Corina Machado, another prominent opposition leader. Maduro digging in comes as the Biden administration imposed news sanctions on Venezuelan officials, and as many leaders in the Western Hemisphere, including US President-elect Donald Trump, expressed their support for González. So, what’s next for Venezuela? Atlantic Council experts share their insights below.

Click to jump to an expert analysis:

Geoff Ramsey: Trump should take note of the Maduro regime’s internal tensions

Iria Puyosa: The new sanctions are insufficient to remove Maduro from power

Lucie Kneip: The Venezuelan opposition will need to unite around a theory of change

William Tobin: Going forward, the US should better balance oil sanctions with sanctions against individuals

Latin American leaders across the political spectrum are rejecting Maduro’s power grab

The voting tally sheets overwhelmingly showed that González won Venezuela’s presidential election on July 28, 2024. It’s even a point on which Trump and US President Joe Biden agree. Both have referred to González as president-elect, with Trump doing so over social media yesterday following the reported detention—and release—of opposition leader Machado.

So, in what type of country does a president lose an election—and there’s evidence to back it up—but then goes ahead and assumes another term anyways? “It’s a dictatorship,” says Chile’s president, Gabriel Boric, in reference to Maduro’s government. Boric is one of many Latin American leaders who have categorically rejected Maduro’s claim that he won the July presidential election. On that point, there is agreement among Boric on the left to Argentinian President Javier Milei and Panamanian President José Raúl Mulino on the right—both countries which González has visited. González also visited the United States in the past week, where I had a chance to speak with him.

In a fragmented and polarized region, what Maduro has achieved is to bring leaders from across the political spectrum together to reject his new power grab. Brazil, Colombia and Mexico—although not recognizing Maduro’s win—unfortunately had representatives present at today’s inauguration. But at least the presence was limited to the current ambassadors serving in the country. Perhaps the highest-level foreign official at the inauguration was the speaker of Russia’s Duma, Vyacheslav Volodin.

The continued large-scale regional rejection of Maduro is no small feat. The region is historically divided. But the critical question is how to avoid complacency and leverage this unity to further support the democratic opposition. Regional governments, including the incoming Trump team, should accelerate diplomatic coordination to give new momentum to the opposition and to make life harder for Maduro and his accomplices. At the same time, these governments should work to avoid burdening the Venezuelan people with more hardships. It’s a delicate tightrope to walk, but it’s necessary to give further hope to the overwhelming number of Venezuelans who cast a vote for democracy and freedom in July.

—Jason Marczak is vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center.

Trump should take note of the Maduro regime’s internal tensions

By assuming yet another illegitimate mandate based on a fraudulent election, Maduro has confirmed that he is willing to cling to power at all costs. Opposition leader Machado and election winner González are deeply popular in Venezuela, but Maduro has the guns and thugs on his side—and he’s not afraid to use them. Yet in spite of the mounting number of political prisoners and the recent reported detention and release of Machado, it is easy to overstate how strong Maduro really is.

In the wake of July’s stolen election, Maduro has had to reconfigure his cabinet completely, placing more and more power in the hands of hardliners in the Chavista coalition. A key benefactor of Maduro’s drive to assume a new mandate is Interior Minister Diosdado Cabello, a longtime rival who Maduro has kept at arm’s length since taking power in 2013. Entrusting him as top enforcer may well be a sign of just how few friends Maduro has left inside Chavismo. Others in the coalition, meanwhile, may well have doubts about the idea of six more years of economic chaos, violence, and international isolation.

When Trump takes office on January 20, his team should take careful note of these internal dynamics. The goal should be to combine pressure with incentives that can disrupt regime cohesion, presenting key figures in the ruling coalition with dilemmas in a way that makes a democratic transition more appealing than clinging to power. For this strategy to work, the next US administration will have to keep sanctions policy nimble and responsive to events on the ground, and avoid a “set it and forget it” approach. Sanctions alone are unlikely to unseat Maduro, unless they are accompanied by a clear roadmap to lift them, giving fence-sitting regime figures a blueprint to follow. The first Trump administration’s Democratic Transition Framework, presented in 2020, laid out a vision for change involving power sharing and reconciliation, and it may be worth dusting off this time around as well.

—Geoff Ramsey is a senior fellow at the Atlantic Council’s Adrienne Arsht Latin America Center.

The new sanctions are insufficient to remove Maduro from power

In response to Maduro’s illegitimate swearing-in for another term as president of Venezuela—despite González’s electoral victory—the Biden administration has slightly increased pressure on his authoritarian regime. The new measures include raising the rewards for Maduro and Cabello to a maximum of twenty-five-million dollars and sanctions against two thousand individuals involved in repression, violation of human rights, and electoral fraud. However, the US oil company Chevron’s license to operate in Venezuela remains in place.

Indeed, the new sanctions are insufficient to remove Maduro and Cabello from power. The ruling coalition, which White House representatives are now labeling as “narcoterrorists,” can continue to collaborate with transnational criminal networks that include allies in Iran and Russia while simultaneously increasing repression against democratic political leaders and human rights defenders in Venezuela.

Venezuelans are again taking to the streets in large numbers, demanding a transition to democracy and the inauguration of González. The Biden administration has an opportunity to take more decisive action to support Venezuela’s democratic re-establishment. Helping to pave a clear path for Venezuela’s return to democracy could become a significant legacy for Biden in the Western Hemisphere. Delaying meaningful action could risk losing this crucial opportunity, especially since the opposition is now strategically united, the people are mobilized, and the ruling coalition is showing cracks.

—Iria Puyosa is a senior research fellow at the Atlantic Council’s Digital Forensic Research Lab.

The Venezuelan opposition will need to unite around a theory of change

Maduro’s illegitimate re-inauguration is the latest scheme in the authoritarian government’s campaign to eliminate resistance to its consolidation. To add insult to injury, regime affiliates briefly detained Machado during her first public emergence after months of hiding, rattling supporters domestically and abroad. While swaths of the Venezuelan opposition quickly condemned her detention, it remains to be seen how the opposition will respond to tests of its ability to unify in 2025, given differences in attitudes toward electoral participation, negotiations, and pressure tactics.

Heading into the 2025 subnational elections, opposition coalition candidates will have to determine whether it’s worth throwing their hat in the ring given the electoral conditions. Some may decide that the government’s blatant fraud at the national level will be even more easily achieved at the local level, while others may seek to draw on the infrastructure of their strongholds to procure as much regional power as possible, in which case they will need to develop a clear strategy of mobilization. The regime will seek to exploit these conflicting strategies to undermine the opposition’s political will to rise to the occasion.

Maduro’s government has historically proven adept at taking advantage of internal divisions by providing opportunities for disgruntled splinter groups within parties to gain footing by positioning themselves more closely to regime affiliates. This strategy of party cooptation is likely to continue in many of the major parties unless the opposition can find a way to resolve internal differences and coordinate on defining a theory of change.

Beyond electoral participation, opponents of Maduro will continue to face repression through the targeting of political figures, journalists, and human rights activists, as well as crackdowns on protests and digital censorship. Maduro’s best strategy is to stoke fear and fatigue with protests and mobilization. International allies will be critical in supporting political participation and free speech as Maduro seeks to further stifle these tenets of democracy.

—Lucie Kneip is a program assistant at the Adrienne Arsht Latin America Center.

Going forward, the US should better balance oil sanctions with sanctions against individuals

As Maduro illegitimately steps into office for his third term today, Venezuela’s oil sector is in sustained yet marginal recovery. In recent months, Venezuela surpassed the one-million-barrel-per-day milestone for the first time since mid-2019.

The oil sector in Venezuela has been experiencing a secular decline since the early 2000s, and production output from Venezuela’s degrading oilfield infrastructure began to drop dramatically during the first half of 2014. An oil price crash sent dominoes cascading for Venezuela’s state oil company, Petróleos de Venezuela, SA, which faced declining demand at the same time as it confronted a sizeable volume of maturing debt, the beginning of central bank monetization, and intensifying operational inefficiencies.

The sanctions imposed on the oil sector under the “maximum pressure” campaign from 2018 to 2022, spanning the Trump and early Biden administrations, exacerbated but did not cause this decline. However, the strategy did divert most of Venezuela’s oil to China at discounted prices, and led Iranian service company NIORDC to play a key role in maintaining output. Phantom traders from China and Iran handled virtually all of Venezuela’s exports in 2021.

The recent uptick in Venezuelan oil output has come with the reentry of Western firms, most substantially since April 2024 under the US Treasury Department’s policy of “specific licensing.” Under this policy, individual firms can seek authorization from the Office of Foreign Assets Control to operate in Venezuela under transparent and restricted terms, which strictly limit remuneration to Maduro’s enablers. Under this policy, approximately half of Venezuela’s exports have been routed to the United States or to Europe since May 2024. This effectively represents a diversion from China and increases transparency.

There is doubt that a renewed maximum pressure strategy would achieve its aims. In any case, it is incumbent on the Treasury Department to ensure that Maduro cannot use the oil sector as a cash cow, and to continue to tighten its clasp around Maduro’s network of enablers through individual sanctions.

—William Tobin is an assistant director at the Atlantic Council’s Global Energy Center, where he focuses on international energy and climate policy.

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Morocco’s government must foster greater economic competition

Rabah Arezki — Thu, 09 Jan 2025 18:31:21 +0000

Evolution of freedom

Evolution of prosperity

The path forward

Explore the Morocco country scorecard

Evolution of freedom

Morocco has substantially improved in all institutional dimensions during the last three decades, as measured by the progress in the Freedom Index. The Kingdom navigated the Arab Spring, which rocked certain countries in the Middle East and North Africa (MENA) region. As a result, a diverging trend has emerged between the sustained improvement in Morocco and the deterioration in MENA’s regional average since 2013, resulting in a gap of more than eleven points in their respective Freedom Index scores. As this chapter will detail, there are many areas in which Morocco still needs to continue its reform effort toward fully free and open institutions, building on recent positive trends.

The economic subindex shows a very sharp discontinuity in the year 2004, where Morocco’s score jumps more than eight points, opening a very substantial gap with respect to the rest of the region. A closer look at the components included in the economic subindex evinces that it is primarily driven by an extensive improvement in women’s economic opportunities, produced by the implementation of a new Family Code, known as Moudawana, in 2004. This piece of legislation is seen as one of the most progressive of the region, expanding women’s rights and protections in relation to civil liberties like marriage, divorce, child custody, and inheritance; as well as labor and economic aspects such as workplace protection, equal pay, maternity leave, and access to credit.

Morocco has historically been fairly open to international trade and foreign investment. The European Union-Morocco Association Agreement that entered into force in the year 2000, creating a free trade area with the European Union, has certainly expanded exporting opportunities. Yet, the concentration of trade relations with Europe may have slowed down economic integration with neighboring countries in the Middle East and Africa. The signing of the African Continental Free Trade Agreement in 2018, and its ratification in 2022, will likely favor the expansion of Morocco’s trade and investment flows with the rest of Africa in the coming decades.

The different components of the economic subindex are not wholly capturing domestic aspects of free and fair competition. Like in most countries in the Middle East and North Africa, Morocco is subject to an important level of market concentration in many sectors, especially non-tradable sectors. That is despite progress made in the competition policy framework. Leveling the playing field will be paramount if Morocco wants to ignite productivity and job creation.

The political environment in Morocco is complex, as evidenced by the large differences in the scores of the four components of the political subindex. Following the Arab Spring, a new Constitution was adopted which aimed at fostering more democracy, reinforcing the independence of the judiciary, combating corruption, and better protecting women and minorities. As a result of the new Constitution, judicial independence and effectiveness scores increased by ten points. While the Constitution brought important strides, critics argue that the concentration of power has not changed. Political rights in Morocco are better protected than in most other countries in the region, but the overall level is still far from the most advanced countries of the world. Freedom of expression is fairly protected, but it is limited. As a result, the press cannot fully fulfill its role as a public watchdog, including on issues of corruption. Morocco performs poorly in the bureaucracy and corruption component of the legal subindex.

The positive trend in terms of reduction of informality reflects efforts by the authorities to formalize the economy. The enrollment of informal workers into the public health system is, however, proving difficult. The trend in informality is linked to progress toward poverty reduction in Morocco. Yet poverty remains pervasive, especially in rural areas. The informal sector serves as a shock absorber, Evolution of Prosperity and as such, adopting a more inclusive approach as opposed to coercion is desirable. Reduction in barriers to entry into the formal sector is the way to go to reduce informality.

Evolution of prosperity

The evolution of the Prosperity Index since 1995 illustrates the sustained improvement in standards of living in Morocco, which has reduced the gap with the average of the MENA region. It is important to note that the regional average includes several low-population, oil-rich countries, namely the Gulf monarchies, which partially explains the persistent gap.

An important factor that increased the cohesiveness of Moroccan society, and certainly improved the recognition and protection of minorities, is the acceptance of the Berber language as official in 2011. This historic step has produced positive spillovers in terms of cohesiveness but it remains to be seen whether this will translate into reduced regional inequality in the medium term.

Regional inequalities are significant in several components included in the Prosperity Index, The Path Forward such as income, education, and health. Increasing economic prosperity in the last decades has disproportionately benefited urban populations in cities, which have also been the destination of most investments and growth-enhancing public policies. As a result, there are still sizable pockets where poverty is severe.

The performance of the educational system reflects that duality. While access to primary education has become universal, the quality of education is uneven. Indeed, the quality of education is much lower in rural than urban areas, further exacerbating spatial inequalities. The situation of the healthcare system is not very different, and suffers from several issues already mentioned, like the large disparities along the urban-regional divide.

The path forward

Overall, Morocco has made notable progress toward economic transformation, but further efforts to balance its economic development are needed. Morocco’s experience with economic development is unbalanced. On the one hand, there are pockets of rapid development, and on the other, pervasive poverty remains, especially in rural areas. In 2021, Morocco has started to implement a “new development model” to improve human capital, boost productivity, and foster inclusion. Despite the progress, economic growth remains tepid and poverty is pervasive. What is more, Morocco is faced with a relatively high level of debt. The lack of fiscal space constrains government spending to reduce spatial disparities and support poorer households.

The danger for Morocco is that it could remain stuck in a so-called middle-income trap with low growth and high poverty, which could further ignite social tensions. To reignite growth and transform its economy, Morocco must level the playing field. To do so, issues of market structure and competition must become more central. That would help jumpstart productivity and create good jobs. Take the example of the telecom sector, where anti-competitive practices have long made the quality and cost of digital services expensive.

Barriers to the adoption of so-called general-purpose technology such as quality and affordable internet are an important factor keeping Morocco in the middle-income trap, and also could further the divide between urban and rural areas. The pervasive lack of contestability, and the slow pace of technology adoption, help explain why Morocco is stuck in low growth. Governments play a key role in the regulation of entry in key “upstream” sectors such as telecom. Meanwhile, the lack of availability of frontier technology may have forced firms into low-productivity activities and limited their trade and economic growth.

More generally, unfair competition that results from markets dominated by connected firms deters private investment, reducing the number of jobs and preventing countless talented youngsters Rabah Arezki from prospering. This lack of fair competition is the underlying reason that Morocco, like other Middle East and North African economies, is unresponsive. The lack of contestability leads to cronyism and what amounts to rent-seeking activity, including, but hardly limited to, exclusive licenses, which reward their holders and discourage both domestic and foreign competition.

Morocco has adopted a competition framework to champion open competition, but the limited independence of the competition authority reduces its ability to decisively shape the market structure of the economy. An integral part of the competition and contestability agenda is transparency and data availability. Morocco, like other countries in the Middle East and North Africa, trails behind other similar middle-income countries on government transparency and the disclosure of data in critical areas on the degree of competition in sectors. Greater transparency would help build a consensus over the need for more competition to stimulate growth and job creation.

Rabah Arezki is a former vice president at the African Development Bank, a former chief economist of the World Bank’s Middle East and North Africa region and a former chief of commodities at the International Monetary Fund’s Research Department. Arezki is now a director of research at the French National Centre for Scientific Research, a senior fellow at the Foundation for Studies and Research on International Development, and at Harvard Kennedy School.

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Sanctioned kleptocracy: How Putin’s kremligarchs have survived the war—and even prospered

Ilya Zaslavskiy — Wed, 08 Jan 2025 18:00:00 +0000

Russia’s full-scale invasion of Ukraine in February 2022 challenged much of the common Western understanding of Russia. How can the world better understand Russia? What are the steps forward for Western policy? The Eurasia Center’s new “Russia Tomorrow” series seeks to reevaluate conceptions of Russia today and better prepare for its future tomorrow.

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Introduction
How did we get here?
Where are we now?
What can we do about the Russian weaponization of kleptocracy?
Apart from sanctions, what else can the West do about the Russian weaponization of kleptocracy?
Acknowledgements
About the author

By the time Russia launched its full-scale war against Ukraine in February 2022, the Kremlin’s transnational kleptocracy had achieved substantial global reach. It had penetrated every continent with corrupt practices, boasted abundant finance for its operations, and found every vulnerable strategic point where it could challenge the United States and its allies politically. Crucially, it had also inserted itself in key global financial and natural resources value chains in a way that ensured that it would be extremely difficult for the West to disentangle from it or counter it through sanctions or other measures.

With such a high level of global infiltration, even today’s unprecedented Western sanctions are only partially curbing Russia’s weaponized kleptocracy. Despite setbacks, Kremlin-led networks are still capable of undermining the West and its allies. This report will seek to answer three questions.

• How and why did the West allow this to happen?
• What is the state of the Kremlin’s kleptocratic networks today?
• What policy measures can combat Russian kleptocracy?

How did we get here?

Until the end of his first presidential term in 2004, Vladimir Putin was hiding his true intentions for imperial revanchism and deploying weaponized kleptocracy as a foreign policy tool. First, he needed to consolidate power. He also needed to leverage the global economy and rising commodity prices to augment his resources and assets, as well as those of his inner circle. This period of consolidation coincided with an era of rising living standards (measured by rising personal income, socioeconomic indicators, and other measures) as Russia recovered from the economic crisis of 1998.

Early in Putin’s tenure, leading Western politicians—including UK Prime Minister Tony Blair, Italian Prime Minister Silvio Berlusconi, German Chancellor Gerhard Schröder, and even US President George W. Bush—assisted Putin, sometimes wholeheartedly and sometimes inadvertently, in his kleptocratic exploitation of globalization. So did large Western corporations such as British Petroleum (BP), Shell, and Exxon. Many focused on securing their share of economic benefits in trade with Russia, seeing this as a win-win scenario, while ignoring warning signs, including Putin’s brutal war in Chechnya and his suppression of dissent.

The United States was also preoccupied with its war on terror after the September 11, 2001, attacks and including the subsequent invasions of Afghanistan and Iraq. At the time, Washington shifted foreign policy attention from Europe to the Middle East, devoting resources to combat al-Qaeda and other extremist groups and, in the process, neglecting transatlantic security.

Putin and his kleptocratic proxies leveraged these US priorities to their advantage, portraying the war in Chechnya as part of the Global War on Terror—despite Putin and his security services escalating the conflict in Chechnya themselves to consolidate their grip on power. The Kremlin also pushed a model of trade that prioritized big energy deals, turning Western partners into effective political lobbyists. In the process, it co-opted Western political and economic elites.

Big, high-profile deals with Western majors were the order of the day. A good example was the Tyumen Oil Company (TNK)-BP oil joint venture, which earned praise from Western media.

Vested interests and naïve Western experts persuaded the public that such deals would lead to Russia’s development and integration into the global economy, cementing democratic practices. These beliefs persisted despite warning signs like the arrest of oil tycoon Mikhail Khodorkovsky, the takeover of his Yukos oil company, and the suppression of independent television channels such as Vladimir Gusinsky’s NTV. The Kremlin presented such moves as part of Putin’s battle against unruly oligarchs and, for the most part, the West went along.

In the case of the Yukos takeover, Western governments issued statements about the need for fair legal processes and respect for property rights but did not take strong diplomatic or economic action. I personally observed Western diplomats and energy executives in Moscow in 2006–2008, noting that geopolitics and the desire to maintain stable relations with Russia—particularly given its energy dominance—muted a stronger response from Western governments and investors. In her highly acclaimed book Putin’s People, Catherine Belton noted that when Rosneft successfully carried out an $80-billion initial public offering in the West in 2006 (using expropriated assets), the result was “presented as a triumph for Putin as he played host to the [Group of Eight] group of developed nations in St. Petersburg that summer,” protests and the threat of lawsuits notwithstanding.

Russia and its emergent transnational kleptocracy were steadily gaining wealth, technology, and power. As they did, they began exporting their own business “understandings” (i.e., criminal informal practices) to the West. Putin, meanwhile, put his weight behind elevating his loyal cadre of “kremligarchs”—that is, tycoons with strong connections to Putin’s Kremlin regime.

It should be noted that Putin’s kremligarchs are qualitatively different from the Boris Yeltsin-era oligarchs, the so-called “seven bankers” who controlled much of the Russian economy in the 1990s and enjoyed independent political power. Instead, Putin’s kremligarchs are economic and political agents for the Putin regime with a track record of carrying out both economic and political operations against the West on behalf of the Kremlin. They have access to billions of dollars and extensive connections in the former Soviet space and Europe. They are supported by the Russian propaganda machine, as well as Kremlin-connected organized crime groups and the security services.

The term “kremligarch” is, therefore, a more accurate description of Russia’s business elite under Putin than the outdated term “oligarch.” While the 1990s oligarchs were powerful businessmen who had significant influence over political decisions, the situation changed dramatically under Putin’s rule. As he steadily consolidated power, noncompliant figures like Khodorkovsky were arrested, exiled, or stripped of their assets, signaling the end of any independent power among Russia’s wealthy elite.

“Kremligarch” reflects the reality that these individuals are no longer even partially autonomous. Instead, they operate under the Kremlin’s direct control, serving as extensions of state power. Their wealth and personal security are contingent on loyalty to Putin, and their economic enterprises thrive only through state contracts, tax breaks, and alignment with Kremlin interests. Their enterprises should not be considered businesses in the Western sense, as there is no free market or private property; the kremligarchs’ ownership rights came at the whim of a systemically corrupt judicial system hijacked by Putin’s proxies. The term “kremligarch” highlights these individuals’ roles as custodians of Kremlin assets rather than free-market entrepreneurs, and it helps to dispel the misleading notion that they possess political independence.

In Putin’s second presidential term, from 2004–2008, the Kremlin’s kleptocratic networks took advantage of rising commodity prices, which leveraged their uninhibited penetration of the global financial system. Putin’s kleptocracy worked hard to undermine neighboring states, including Ukraine, through a variety of corrupt political and economic means, such as corruption in the gas sector and undermining of other strategic industries.

Putin’s kremligarchs also expanded their horizons beyond the former Soviet Union and Eastern Europe—moving into Western Europe, the Middle East, Africa, and South America. Examples include the US-sanctioned kremligarch Viktor Vekselberg’s control of mining assets in South Africa, kremligarch Dmitry Rybolovlev’s use of banking assets and cryptocurrencies to influence politics in Uruguay, and the lucrative operations of the late kremligarch Yevgeny Prigozhin and his mercenary Wagner Group on three continents.

The Putin regime and its kremligarchs have also tested other subversive techniques. The Nord Stream 1 pipeline project co-opted Schröder, who served as German chancellor from 1998–2005 and took an executive position with the project upon leaving office. So flagrant was Moscow’s cooptation of the former German leader that his name became a moniker for compromised officials—“Schröderization” refers to the process of Western politicians being corrupted by Kremlin cash.

The Kremlin also became more ruthless and brazen, eliminating whistleblowers who exposed the regime’s dark underbelly. The 2006 poisoning of Russian security service veteran Alexander Litvinenko, who had defected to the United Kingdom and was cooperating with British law enforcement, was the most dramatic example. This period culminated in Russia’s 2008 invasion of Georgia, which had distinguished itself for its fight against Moscow-backed corruption, its democratic reforms, and its determined effort to join Euro-Atlantic institutions. The West yet again failed to grasp that the invasion was also the first open military shot in the Kremlin’s war on democracy abroad.

The Western response to Russia’s 2008 invasion of Georgia was notably muted, as the West failed to impose serious consequences on Moscow. Despite initial condemnation, European leaders, particularly French President Nicolas Sarkozy, brokered a ceasefire that largely favored Russian interests. The European Union and NATO were hesitant to escalate tensions, prioritizing diplomatic engagement over sanctions or military intervention. Under Bush, the United States issued critical statements but refrained from taking meaningful security steps or economic action against Russia, largely due to concerns about broader geopolitical relations and economic interdependence. The passive Western response emboldened Russia, signaling to Moscow that further territorial aggression in its “near abroad” might not provoke a strong Western backlash.

The 2008 global financial crisis temporarily mitigated Russia’s openly aggressive approach. The crisis caused a dramatic drop in the price of oil—Russia’s main economic driver—which led to a significant decrease in government revenues. This forced the Kremlin to prioritize stabilizing its domestic economy, curtailing its ability to invest in military expansion and to project power abroad. Russian foreign policy became more restrained as the government diverted resources toward supporting key industries and ensuring macroeconomic stability during the downturn.

This was during the period of “the tandem,” when Putin temporarily stepped down as president in favor of his loyal crony Dmitry Medvedev. Putin remained in de facto power as prime minister and returned to the presidency in 2012. During this period, Putin restrained himself from his previous hyperactive and aggressive foreign policy role, while Medvedev played the role of a more cooperative president who sought to attract Western investments and could abstain from standing in the way of NATO’s airstrikes against the Libyan regime, even if he still advocated for a multipolar world and Russia’s special interests in the so-called near abroad.

Not only did the West refrain from imposing serious sanctions on Russia following the invasion of Georgia, but it did not enact any effective countermeasures to Moscow’s use of weaponized corruption. The West largely allowed business-as-usual trade relations with the Kremlin, while Russia continued to export its corrosive practices on multiple levels, including state and corporate levels. These practices ranged from monopolistic abuses by Gazprom in Europe to bribes and cooptation of the mechanisms of Western politicians, academics, and other influential figures and institutions. Western policy at this time was defined by US President Barack Obama’s reset with Moscow, which effectively exchanged stable relations for Russia’s acquiescence on sanctions against Iran’s nuclear program and supply routes to Afghanistan.

As a result, Putin’s team was able to leverage the reset to ensure continued appeasement by the West while the Kremlin could continue its global kleptocratic advance, rising military spending, and revival of imperialistic policies toward Russian neighbors.

For Russia, 2012 was a turning point when any hope for far-reaching domestic reform died. Putin formally returned to power following the Medvedev interregnum and made it clear that he would use any means necessary to remain indefinitely in the Kremlin. It was at this time that Putin’s Kremlin also escalated its political warfare against the West, stepping up military support to the dictatorial regime in Syria, openly claiming imperial-style interests in the post-Soviet space, holding the largest military exercises since 1991, deploying disinformation campaigns (including through adoption of an anti-LGBT propaganda law in 2013) to counter Western values, and giving asylum to and amplifying messages from fugitive US whistleblower Edward Snowden.

However, even Russia’s forceful and illegal annexation of Crimea, its armed intervention in Ukraine’s Donbas region in 2014, and the shooting down of Malaysian Airlines Flight MH17 were insufficient to awaken the West to the danger emanating from the Kremlin. Western sanctions in response were unified but tepid, and business continued as usual.

These sanctions focused narrowly on targeted measures like asset freezes and travel bans on key individuals involved in the violent grab of Ukrainian territory. Only a few kremligarchs were targeted and most of them, like Gennady Timchenko, an insider from Putin’s inner circle, already had little economic exposure to the West. While the sanctions caused economic strain in Russia, particularly with capital flight and a weakening ruble, they were not severe enough to force a policy reversal. This allowed Russia to consolidate its hold on Crimea without facing crippling consequences. Major Western policymakers continued with consumerist, transactional, or outright appeasing approaches to Moscow.

Emboldened by the tame Western response, the Kremlin became more aggressive. In 2015, Russia launched a military intervention in Syria after a request by the government of dictator Bashar al-Assad for military support in its fight against domestic opposition. This bold move, along with the widening scale of operations in Africa by Kremlin-connected mercenary groups like Prigozhin’s Wagner Group, showed that Putin’s regime was prepared to act as a global arsonist and extortionist in places beyond Russia’s immediate neighborhood.

For many experts, Moscow’s increasing belligerence highlighted that Putin’s regime was not just an authoritarian kleptocracy focused on amassing wealth but one driven by a deeply ingrained anti-Western ideology and willing to act on these beliefs even if it meant sacrificing some financial gains.

Finally, after the majority of members of the US Congress acknowledged Russia’s meddling in the 2016 US presidential elections, the criteria for sanctioning Russian officials and oligarchs (as the US administration continued to call them) expanded in mid-2017 with the enactment of the Countering America’s Adversaries Through Sanctions Act (CAATSA). This marked a significant shift in US sanctions policy against Russia by expanding the criteria for targeting the Russian elite. CAATSA allowed for sanctions based not only on direct involvement in specific actions like the annexation of Crimea or gross human rights violations but also for those close to Vladimir Putin’s regime. The law outlined broad metrics such as proximity to Putin, net worth, and documented corruption as grounds for inclusion on sanctions lists. This widened the scope of potential sanctions to include individuals integral to Russia’s political and economic systems.

While conceptual applicability of sanctions expanded, actual designations lagged. The Kremlin list, published in January 2018, was initially only a warning. It included ninety-six Russian oligarchs and 114 senior political figures, sending a signal that these individuals were under scrutiny for their ties to the Kremlin. However, this list was not equivalent to sanctions. When the United States imposed sanctions in April 2018, the list was much narrower, targeting only seven oligarchs, including only three kremligarchs outside of Putin’s tight Saint Petersburg circle: Oleg Deripaska, Viktor Vekselberg, and Suleiman Kerimov, all of whom had limited economic exposure to the United States at the time.

Where are we now?

The start of the full-scale war against Ukraine should be seen in a dual light. On one hand, it is proof that Putin’s plan to use kleptocratic corruption and hybrid and limited warfare alone was not enough to crush Ukraine’s drive for Western integration. But it is also an example of the consequences of two decades of Western appeasement. When Russia invaded Georgia in August 2008, just as the global financial crisis was hitting, Russia’s economy was at its most vulnerable since 2000. Strong sanctions at this juncture might have deterred future aggression.

By unleashing full-scale war in February 2022, Putin took a calculated risk that the West would be as passive in defending Ukraine as it was in defending Georgia in 2008—or Ukraine in 2014.

It also shows how acceptable and normalized massive violence against peaceful neighbors as a tool of foreign policy has become for the Russian elite, including the kremligarchs. They no longer feel the need to limit their actions only to hybrid war or to create façades and plausible deniability as much as they did before 2022. Russian politicians and economic agents now openly defy international economic institutions, rule of law, and norms. The kremligarchs no longer pretend to be private Western-style businessmen. Instead, they seek more state support and try to protect any remaining trade links in the global economy. Some, like Mikhail Fridman and Oleg Deripaska, are providing various forms of support to the Russian army.

The kremligarchs’ ability to weather the post-2022 Western sanctions shows how resilient and globally entrenched they have become. Russia is now under more sanction mechanisms than Iran, Venezuela, and North Korea combined. Yet even these sanctions can only partially reduce resources available for the war as Russia continues to expand its military budget.

Western countries have also taken different approaches. US sanctions targeted Russian financial institutions by cutting many of them from the Society for Worldwide Interbank Financial Telecommunications (SWIFT) international payment-messaging system, suspending stock and US dollar exchanges, and restricting access to the global financial system. The United States also stepped up sectoral sanctions against Russian exports of mineral resources and production, as well as restricting technology transfers. The United States sanctioned many, but not all, key kremligarchs (for example, Roman Abramovich, Leonid Mikhelson, and Dmitry Rybolovlev remain unsanctioned in the United States).

The European Union, United Kingdom, and other Western allies aligned with some of the US sectoral sanctions, but did so after the United States took action, and often in a limited way. Instead, they placed much greater emphasis on individual sanctions, designating hundreds of kremligarchs and other political figures and officials— in numbers greater than those sanctioned by the United States. This reflects priorities, capabilities, and the fact that the Russian elite had used Europe as their primary destination for business and leisure before 2022.

Since 2022, most kremligarchs simply moved their funds to Dubai and other Gulf and Asian jurisdictions outside of Western purview. Some found visa and financial loopholes to continue their pre-2022 lifestyles and operations. But one thing did not change: their main currency remains loyalty to the Kremlin, not their nominal assets. Not a single prominent kremligarch defected to the West or even spoke unequivocally against Putin’s war of aggression.

This is the result of the Kremlin’s carrot-and-stick policy. In terms of incentives, the Kremlin keeps money flowing to the kremligarchs. Forbes reported that Russia’s wealthiest individuals added $72 billion to their collective fortunes over the past year, bringing their combined wealth to $577 billion. This marks a recovery from 2022, when their total wealth had plunged to $353 billion due to Western sanctions. For context, in 2021, Russian billionaires’ total wealth stood at $606 billion.

Russia’s economy shrank 2.1 percent in 2022 under the pressure of Western sanctions, but it was still able to sell oil, metals, and other natural resources to global markets—in particular to China, India, and the Middle East—and to increase its kremligarchs’ wealth in 2023.

Putin has repeatedly touted the failure of Western sanctions to cripple Russia’s economy, highlighting that the country’s gross domestic product (GDP) grew by 3.6 percent in 2023, outpacing any of the Group of Seven (G7) nations responsible for the sanctions. There are different views on the quality of this alleged economic growth, with some Western experts arguing an economic catastrophe is lurking for Russia beneath its nominal GDP growth, possibly as early as 2025. Russian opposition figure Vladimir Milov also supports this view, arguing that Russia’s wartime growth is unsustainable, artificially is driven by state spending, and paints a misleading picture of the country’s economic resilience.

Despite the debate over Russia’s true economic performance, the size of the nominal economic decline or growth is less relevant when it comes to the effect of sanctions on kremligarchs. As long as the political system remains intact and can sustain the war effort, the loyal kremligarchs’ wealth and place in the system are largely preserved.

More important than the carrots are the sticks. The Kremlin has put in place a highly repressive system that commandeers resources for the war effort without any significant resistance, including from the kremligarchs. Putin’s Russia is shifting to a “mobilization economy,” in which state power is used to redistribute property, excluding disloyal business figures and transferring their assets to a new, Kremlin-loyal elite, adding new people to the ranks of old kremligarchs. In this system, loyalty to the Kremlin must be proven constantly.

In this sense, the kremligarchs’ staunch loyalty to Putin resembles a Mafia mentality that does not allow one to leave the boss’s operations without explicit permission. The wave of suspicious accidental deaths among top Russian officials and important business figures after 2022 is a constant reminder to all kremligarchs that their perceived disloyalty will be punished through Mafia-style executions.

What can the West do about the Russian weaponization of kleptocracy?

The guiding principle of any policy recommendations is that Western policymakers need to take the kremligarchs seriously as a security threat. They are among the most effective agents of the Kremlin abroad, employing sophisticated kleptocratic methods with the support of Russia’s propaganda machine, security services, and organized crime networks.

Such wide acknowledgement will enable Western governments to allocate more resources to establish a systemic whole-of-government response to the threat. Sanctions should target not only family members or nominal owners of kremligarchs’ assets, they should also include those who aid various operations of kremligarchs against Western democratic values, norms, and institutions.

Western policymakers should be skeptical of arguments suggesting that the West try to divide the Russian elite through the selective application of sanctions. There are no credible examples of such tactics working.

Below is the list of improved sanctions that would be more effective in assisting Ukraine and improving Western security against Russian revanchism.

1. Create a multilayered, systemic response to stop imports of electronic chips, other sophisticated equipment, and raw materials used in Russia’s military-industrial complex.

Over the last two years, Western media have reported extensively on illegal smuggling or the exploitation of sanctions loopholes that allowed Russia to get access to critical technology to produce drones, missiles, and other weaponry used in Ukraine. Kremlin surrogates and covert agents have been instrumental in these smuggling operations using third countries and sophisticated manipulation of financial mechanisms. A recent report from the Independent Anti-Corruption Commission shows that, via third countries, as many as fifty-eight Russian enterprises get dozens of parts for Russian jets from up to two hundred enterprises outside of Russia.

Given the scale of such smuggling, imposing sanctions alone is not enough. Sanctions should be monitored closely, and sanctions policies should be updated regularly to be effective. Western governments should ensure stricter export controls, and manufacturing companies should monitor and analyze the movement of dual-use goods abroad with enhanced due diligence and advanced know-your-customer policies.

Western governments have slowly reacted by increasing staff in the Office of Foreign Assets Control (OFAC), the Bureau of Industry and Security (BIS), and similar bodies in G7 and EU states, expanding the list of prohibited items and passing some of the monitoring responsibilities to the banking sector. These are all useful, albeit limited and reactive, steps.

A more systemic and lasting solution would be not to shift the enforcement burden from the understaffed public sector to the private sector, but to beef up the public sector and create better coordination “among customs, export control agencies, intelligence services, and financial institutions to map out the entire supply chain and identify evasion tactics.” With enhanced capacity, the United States would be better positioned to implement a robust compliance system for the manufacturing and technology sectors, similar to what was done with banks post-9/11, using collaboration, warnings, and enforcement actions to curb the flow of Western-made components to Russia and ensure adherence to know-your-customer principles.

2. Enforce and expand sanctions on Russian fossil fuel exports by the United States, G7, and EU.

Russia’s full-scale invasion of Ukraine would not have been possible without its fossil fuel revenues, which have now surpassed €780 billion globally and continue to rise.

Stemming these flows requires better enforcing and lowering the $60-per-barrel oil price-cap mechanism created by Ukraine’s Western partners. The West can do this by limiting the number and scope of licenses that facilitate oil trade financing. To improve enforcement, banks’ ability to support the sale of Russian oil above the price cap should be restricted by the US with restriction measures supported by other Western allies. This could be achieved by tightening the scope of licenses that allow financing for oil trade by US Treasury and its G7/EU counterparts. They can also enhance enforcement by introducing (or threatening) secondary sanctions against third-country insurers, traders, and shippers who help Russia evade the price cap. This would penalize entities outside of sanctioning nations that assist Russia in circumventing the cap. This would also help improve the attestation mechanism to ensure that buyers and sellers provide shipowners and insurers with adequate pricing information to verify that Russian oil is being sold below the price cap, thus ensuring compliance.

Another key is closing the “refining loophole,” which allows EU and G7 countries to import oil products—mainly diesel, jet fuel, and gasoline—produced from Russian oil at refineries in third countries such as India, Turkey, or the United Arab Emirates.

The European Union must go beyond its limited liquefied natural gas (LNG) sanctions (and the United States should assist it politically) by adopting a full embargo on Russian LNG, as current measures barely affect Russia’s gas revenues. With Russia recently surpassing the United States as Europe’s top gas supplier, a complete ban is essential to stop the booming trade in Russian LNG (especially by Novatek, a company owned by kremligarchs Mikhelson and Timchenko), which continues despite prior bans on coal and crude oil.

New oil and gas production and new export projects should be sanctioned. Just as sanctions helped halt the development of Arctic LNG 2, other as yet unsanctioned Arctic projects—including the already functioning Yamal LNG and prospective pipelines in Siberia, from within Russian oil fields to its Arctic ports, and from gas fields in Western Siberia overland to China—should be prevented from realization. US sanctions should counter these efforts. Actions could include pushing all LNG service companies out of the sector through the threat of secondary sanctions and imposing further sanctions on new Russian production projects (such as Vostok Oil and the Yamal LNG expansion) along with the corresponding new export flows from these projects.

Western governments should also pressure SLB (formerly Schlumberger) to swiftly exit Russia, as its continued operations and technology support are crucial for enabling Russian oil and gas projects, especially following the departure of other Western competitors after the 2022 Ukraine invasion.

3. Create a systemic Western response to the growing problem of the Russian shadow tanker fleet.

Closely related to the question of poor enforcement of the oil price mechanism is a massive illicit development—the Russian shadow oil and LNG tanker fleet—which has been formed over the last two years by Russian transnational kleptocracy. This matter is so crucial that it deserves detailed analysis.

In setting up the shadow tanker fleet, Russia has followed other bad actors like Iran, Venezuela, and North Korea, which have been under various embargos for many years and have developed their shadow fleets to circumvent sanctions. Russia, however, has taken this kleptocratic endeavor to the next level.

The G7 and EU oil price cap was introduced in 2022 to prevent Russian oil exporters from legally selling crude oil at more than $60 per barrel, with the goal of reducing Russia’s oil revenue and its ability to wage the war against Ukraine. The necessary condition for this measure to be effective is a ban by the UK and other Western governments on Western insurance companies providing protection and indemnity (P&I) insurance for Russian oil cargo sold above the price cap.

In response, learning primarily from Iran’s experience over the last two decades, Russia has created an unprecedented shadow fleet of hundreds of oil tankers whose primary goal is to sneak oil above the price cap without proper P&I insurance. This enabled the Kremlin to largely circumvent the cap and to add hundreds of billions of dollars and euros to its war chest. Multiple kremligarchs from Novatek, Sovcomflot (and its newly set up proxy companies in the Gulf countries), Rosneft, Lukoil, Rosatom, and other entities and proxies are involved in this massive endeavor.

While there are varying estimates regarding Russia’s financial ability to increase such shadow fleets at the same rapid pace, what it has already achieved is staggering. Just in the last two years, the shadow tanker fleet directly servicing Russian oil exports is estimated at between three hundred and 1,400 vessels. No one knows the number for sure because Russia has invested billions of dollars in this new shadow market and elevated it to a massive and global phenomenon with multiple destinations including Gabon, Liberia, Cameroon, Palau, the Cook Islands, Saint Kitts and Nevis, Vietnam, the Marshall Islands, and Panama acting as flag-of-convenience states. This means that Russian proxies can operate hundreds of ships that fly flags from countries with lax maritime regulations, making it nearly impossible to track ownership and the true origin of cargo.

Through its shadow tanker fleet, Russia is also exporting other corrupt practices, using offshore accounts, cryptocurrency, and illicit finance to pay for change of ownership, circumvent local maritime regulations, and hire uninsured and otherwise “flexible” vessel staff. Companies frequently hire crews that might not have strong moral principles or industry standards, and that are ready to switch off transponders, manipulate automatic identification systems, forge documentation, do dangerous ship-to-ship transfers in open seas, or engage in other operations that would obscure ship routes or crude origin from G7 or EU authorities.

Worryingly, around 80 percent of these shadow oil tankers are more than fifteen years old and unreliable, and they represent a serious risk of malfunction, collision, spillage, or other human and environmental damage. Given the enormous reach of the Russian shadow fleet, it is only a matter of time before a major incident occurs. Such a disaster could result in massive amounts of taxpayer money spent in countries around the world to clean up oil spills, as well as shipping companies spending huge sums on damage caused by old uninsured vessels. The increasing risk of disaster can impact both the global environment and that of countries in whose waters these accidents occur, as well as legal shipping. The escalating situation presents significant risks to compliant vessels, the environment, and the affected countries overseeing the waters in which these incidents occur.

The Atlantic Council’s Elisabeth Braw is right to point out that the potential danger is a choice by Russia, which is instrumentalizing the shadow fleet and deliberately passing all risks associated with it to coastal states.

In turn, Russia is weaponizing the export of corruption and undermining international rules, of which the shadow fleet is just one example. Allowing hundreds of potentially dangerous old vessels with owners and crews open to illegal activity should be seen in the larger context in which Russian hackers try to damage Western infrastructure and commercial ships engage in massive espionage against strategic maritime assets. The Russian military deliberately provokes NATO ships and warplanes, and the Russian navy tries to illegally interfere with the global maritime trade in the Black Sea.

To respond to the growing problem of the Russian shadow tanker fleet, policymakers must first consider that the potentially massive threats coming from the shadow fleet are not only about the war in Ukraine and undermining of Western sanctions, but about multiple impacts on the environment and different coastal countries around the world. To address this, the following pragmatic instruments should be used.

Western allies should enable enhanced intelligence sharing on tanker movements and ownership structures.
Countries allowing their flags to be used by shadow fleets should face diplomatic and economic pressure from EU and G7 states.
EU and G7 entities, among others, should prevent the sale of tankers to operators who do not comply with the price-cap policy, and to Russian or undisclosed buyers.
OFAC and European sanctioning agencies should step up their sanctioning of individual oil and LNG tankers from a few vessels to hundreds, and should also step up enforcement of oil price-cap implementation.
The United States, European Union, and Western allies should enable greater coordination on sanctions, including bans on P&I insurance and maritime services to LNG tankers licensed by Russia for navigation through the Northern Sea Route in the Arctic.
New sanctions should be added to target not just the oil itself, but also all the companies and individuals across the value chain who facilitate its transport using shadow fleets. If the shadow fleet is downsized and mainstream compliance is tightened, this would incentivize Moscow to revert to a volume-over-value export strategy.

Western allies should realize that the price for Russia’s military upper hand in Ukraine, achieved through petrodollars, or for massive environmental accidents, is greater than the risk of a spike in global oil prices. As such, the oil price cap should be lowered and secondary sanctions on non-cap countries should be gradually introduced so that all Russian oil exports are banned.

4. Expand the list of Russia’s export commodities to be sanctioned by the United States, G7, and European Union.

Russia relies heavily on exporting metals like aluminum, nickel, copper, zinc, and cobalt. But Russia’s significance to global markets is limited, constituting no more than 6 percent of global supply in any of these commodities. There is ample evidence to refute the widespread concerns that imposing sanctions on Russia’s metal exports would disrupt the global economy. Of course, there is a difference between export targets with a varying degree of disruption and unintended consequences for Western economies that need to be constantly assessed. That is why, in 2022, the EU had to choose which particular steel and other metal products it could sanction and decide on long phase-out periods for them. In April 2024, the United States and the United Kingdom jointly announced a ban on imports of Russian aluminum, copper, and nickel, pushing Russian metal producers to rely even more heavily on China to facilitate production and exports.

Any sanctions in the metals sector will carry a price tag for the West. However, we should not forget that the revenue generated from these metal exports still plays a significant role in fueling Putin’s aggressive military actions. Thus, sanctioning more of Russia’s metal export commodities—including the sensitive subsidiaries of NLMK in Europe and among joint ventures of Rusal and Nornickel with Chinese companies—is imperative. The West must focus on hampering Putin’s ability to finance further aggression, as long as the adverse effects for the West and the global economy are limited.

Apart from sanctions, what else can the West do about the Russian weaponization of kleptocracy?

Sanctions and their better enforcement alone are not a panacea. As Russia continues its war against Ukraine, it is evident that relying solely on sanctions and their enforcement is insufficient to address the multifaceted challenges posed by Russian kleptocracy. The United States and its allies need to adopt a nuanced and comprehensive strategy that goes beyond sanctions. The West should craft an updated containment strategy that recognizes the role of Russian kleptocracy in fueling aggression and destabilization and addresses the root causes of the problem, while minimizing the risk of escalation.

Moreover, Russia’s alliances with other authoritarian regimes, such as China and Iran, amplify the risk of broader geopolitical destabilization and that these kleptocracies will continue learning from each other to undermine Western democratic institutions and security.

An updated containment strategy would crack down more forcefully on Russian financial flows and other global avenues of political and economic infiltration. This entails not only targeting sanctioned individuals and entities but also disentangling the Western financial system from the networks of corruption and illicit finance that underpin Putin’s regime. The West needs to acknowledge that Russia has chosen to engage in a hybrid war against the West and hot wars against its partners. Western leaders can’t afford to keep open business and legal avenues that Russian kleptocracy freely uses. The West must consider options to reduce all trade with Russia, as it did during certain periods of the Cold War, and must designate Russia as a terrorist state like North Korea for its war crimes, political murders, and other horrific actions.

The West must learn from past mistakes and acknowledge the cost of appeasement in dealing with the anti-Western kleptocratic Kremlin regime. Two decades of diplomatic overtures and economic engagement have only emboldened Putin and his kremligarch network and facilitated their expansionist agenda. As the war in Ukraine continues, the West cannot afford to repeat the same mistakes. Instead, it must adopt a firmer stance that prioritizes the defense of democratic values and the rule of law, and that necessarily includes full economic and financial disentanglement from Russia.

Acknowledgements

I would like to extend my deepest gratitude to those who made the preparation of this report possible. First and foremost, I am grateful to Brian Whitmore for inviting me to participate in the Eurasia Center’s critical “Russia Tomorrow” series and for his careful guidance and dedication throughout all stages of this work.
I owe a special debt of appreciation to Ambassador John Herbst and Ambassador Daniel Fried for their vital insights, thought-provoking questions, and thorough peer review, which significantly enhanced the quality of this paper. I would also like to thank Andrew D’Anieri and Aleksander Cwalina for their excellent editorial supervision and overall support in preparing this paper. Their expertise and consistency were instrumental in shaping the final outcome

Special gratitude goes to my brother Alexander Zaslavskiy for his sharing of political and industry knowledge, which provided valuable perspectives for this work. My heartfelt thanks go to my family for their unwavering moral support throughout 2024, a period marked by dedication and focus on this paper.

I am appreciative of Oleh Savitskyi for sharing his insightful views. Finally, I am grateful to Jeff Fleischer and Cate Hansberry for their diligent work in providing the final editorial touches and for overseeing the publication process.

About the author

Ilya Zaslavskiy is a specialist in due diligence, sanctions, kleptocracy, energy regulation, and political risks. His expertise spans anti-corruption, policy reform in the mineral extraction sector, corporate governance, climate change issues, and advocacy for robust policies countering post-Soviet kleptocracy, especially Kremlin-connected oligarchs and entities. His latest work includes containment policy against Russian hybrid threats, and this briefing paper is written in his independent expert capacity on Western sanctions against Russia.

Currently, Zaslavskiy also works as a senior campaigner with Razom We Stand, a Ukraine-based and internationally active peace, clean energy and climate organization. In prior roles, he was senior program manager at the Center for International Private Enterprise (CIPE), head of research at DC-based Free Russia Foundation, fellow at Chatham House and Legatum Institute, and collaborated with the Atlantic Council, Hudson Institute, Martens Centre, and other leading think tanks. He also worked on climate change issues at a Danish company RCF, and in the gas business stream at TNK-BP in Moscow before 2010. He holds a BA degree in Modern History (First Class), an MPhil in International Relations from the University of Oxford, and an Executive Master of Management in Energy from BI Norwegian Business School.

The Eurasia Center’s mission is to promote policies that strengthen stability, democratic values, and prosperity in Eurasia, from Eastern Europe in the West to the Caucasus, Russia, and Central Asia in the East.

Ukraine seeks further progress toward EU membership in 2025

Kateryna Odarchenko — Thu, 19 Dec 2024 21:43:28 +0000

Ukraine has long identified membership of NATO and the European Union as its twin geopolitical objectives as it looks to achieve an historic turn to the West. With seemingly little prospect of an invitation to join NATO while the war with Russia continues, the Ukrainian government will be hoping to advance further on the road toward EU integration in 2025. Progress in the country’s EU bid is realistic, but Kyiv will likely face a series of obstacles during the coming year, both domestically and on the international stage.

Ukraine’s EU aspirations first began to take shape in the aftermath of the country’s 2004 Orange Revolution. However, the European Union initially showed little sign of sharing this Ukrainian enthusiasm for closer ties. Instead, it took nine years for Brussels and Kyiv to agree on the terms of an Association Agreement that aimed to take the relationship forward to the next level.

When the Association Agreement was finally ready to sign in late 2013, Russia intervened and pressured Ukrainian President Viktor Yanukovych to pull out. This led to protests in Kyiv, which then spiraled into a popular uprising following heavy-handed efforts to disperse students rallying in support of EU integration. The Revolution of Dignity, as it came to be known, reached a bloody climax in February 2014 with the murder of dozens of protesters in central Kyiv. In the aftermath of the killings, Yanukovych fled to Russia.

Yanukovych’s successor, Petro Poroshenko, signed the EU Association Agreement months later. By then, Putin had already decided to intervene militarily, seizing control of Ukraine’s Crimean peninsula and sparking a war in eastern Ukraine. This was the start of an undeclared Russian war against Ukraine that would eventually lead to the full-scale invasion of 2022.

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As Russian troops approached Kyiv during the opening days of the invasion in February 2022, Ukrainian President Volodymyr Zelenskyy officially applied for EU membership. This gesture underlined the historical significance of the country’s European choice at a time when Moscow was openly attempting to force Ukraine permanently back into the Kremlin orbit.

Amid the horrors of Europe’s largest invasion since World War II, EU officials and individual member states also recognized the importance of Ukraine’s European integration. In June 2022, Ukraine was granted EU candidate status. This was followed in late 2023 by a decision to start membership accession negotiations, with talks beginning in June 2024.

The dramatic progress made since 2022 has led to growing confidence in Ukraine that EU membership is a realistic goal for the country. It is certainly a popular option. The number of Ukrainians who back joining the EU has been rising steadily since the 2014 Revolution of Dignity, with recent polls consistently indicating that more than three-quarters of Ukrainians would like to see the country as part of the EU.

This overwhelming public support means there is unlikely to be any shortage of political will in Kyiv to adopt the policies that will bring Ukraine closer to achieving EU membership. Nevertheless, the pathway forward is complex and demanding. Effective governance reforms, particularly in the fight against corruption, are essential for Ukraine’s EU aspirations. Aligning with EU legal standards across 35 policy areas including taxation, energy, and judicial reform will also require a monumental effort.

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Ukraine will be hoping for an accelerated period of EU integration progress when Poland takes on the six-month rotating presidency of the European Council in January 2025. This follows on from a Hungarian presidency that brought few benefits for Ukraine, and should create favorable conditions for constructive engagement on key reform issues.

Looking ahead, Ukraine’s EU bid is likely to encounter additional obstacles and headwinds as the prospect of membership draws nearer. Ukraine’s agricultural prowess in particular is set to present both opportunities and challenges. Ukraine is already a major exporter of agricultural products to the EU. If the country is able to join the single market and eliminate existing barriers including tariffs and quotas, this would potentially overwhelm European markets.

Increased Ukrainian grain exports to the EU since 2022 have already become a controversial issue in many EU member states, sparking protests and border blockades. This opposition will only grow in the coming few years, with EU farmers pressing their governments to act in their interests and prevent Ukraine from achieving unrestricted access.

Labor flows of Ukrainian workers may also create some concerns among existing EU members. While millions of Ukrainians are already living and working in the EU including many with refugee status, membership could lead to an influx similar to the large number of Poles who moved to other EU member states following Poland’s 2004 EU accession. To address these concerns, transition periods may be necessary.

How soon could Ukraine achieve EU membership? EU Ambassador to Ukraine Katarína Mathernová has expressed confidence that Ukraine could join by the end of the decade. This was echoed by EU Commissioner for Enlargement Oliver Varhelyi, who stated in October that Ukraine could potentially secure membership by 2029 if it completes the necessary reforms.

Meanwhile, Ukrainian President Volodymyr Zelenskyy has underscored the nation’s determination to achieve fast-track integration. While there is strong support for Ukraine’s membership bid in most EU capitals, the accession process is rigorous and requires unanimous approval. Further progress is likely in 2025, but the road to full membership remains long and challenging.

Kateryna Odarchenko is a partner at SIC Group Ukraine.

Jonathan Panikoff: A moment for Israel and Gulf states to reshape the region’s future rather than react to it

Gissou Nia: Assad should still be held accountable under international law. Here’s how.

R. Clarke Cooper: Russia is losing its Middle Eastern power projection—and great-power claims

Mark N. Katz: Assad’s fall may not be a total loss for Putin

Danny Citrinowicz: With its proxies crumbling, Iran will rethink its security strategy

Emily Milliken: Will Yemen’s Houthi rebels be the next Iranian proxy to fall?

Thomas S. Warrick: Postwar planning for Syria is now at the top of the agenda

Arwa Damon: Among Syrians, there is a sense that nothing is guaranteed and everything is possible

Sarah Zaaimi: The new Syria could normalize relations with Israel and reshuffle the region

Richard LeBaron: Arab leaders won’t like the shattering of Syrian stability

Karim Mezran: Libya offers important lessons for Syria’s next steps

Joze Pelayo: The new Syria can be a friend to the US—if the Trump administration seizes the moment

Alex Plitsas: There is much to be done to prevent a terror sanctuary from emerging

Nicholas Blanford: Hezbollah is now in the worst position of its four-decade history

Daniel Mouton: There are three scenarios for Syria’s future—and the US can shape which one emerges

Alia Brahimi: The lesson for other Arab regimes—illegitimate governments cannot be propped up forever

The Middle East’s power balance has rapidly shifted. The US will need a new strategy.

The fall of the Assad regime less than two weeks into a coordinated assault by a broad array of opposition groups has, with shocking speed, changed the map and power balance in the Middle East and beyond. The long suffering of the Syrian people under a brutal regime that killed, tortured, dispossessed, and exiled millions of its people has ended. The Iranian hegemonic project in Syria, too, has ended, and with it Hezbollah’s privileged position. While the future of Russian bases, the US-backed Syrian Democratic Forces in northeast Syria, interim governance, counter-terror activities, and Syria’s new role in the region may take months to take shape, it is clear today that Syria will be ruled by an opposition coalition with the support of a majority of Syrians.

Several analytic toplines stand out at this early stage. First, Assad’s hold on power was far more tenuous than was broadly perceived internationally, especially by those counseling reconciliation and normalization. Second, Iran and Russia have suffered a dramatic loss of influence in Syria and the region as a result of wars in the Middle East and Ukraine, making it impossible for them to save Assad in 2024 as they did in 2014-15. Third, Turkey is the only country that seems to have had a winning strategy for Syria: opposing Assad while negotiating with his backers, hosting refugees, supporting the opposition politically and militarily, and combating the People’s Defense Units (YPG), an offshoot of the anti-Turkey terror group Kurdistan Workers’ Party (PKK), in northern Syria. Ankara now has unrivaled economic, diplomatic, and military leverage over the stabilization and rebuilding process, and the goodwill of an overwhelming number of Syrians. Fourth, the US approach to Syria for the past decade—tolerating Assad and his Iranian patrons, hyper-focusing on the Islamic State, providing humanitarian assistance but ceasing political and military aid to the opposition, giving open-ended support to the YPG/PKK—has collapsed. Washington, and Jerusalem, will have to come up with a coherent and constructive approach to the new management in Damascus.

—Rich Outzen is a geopolitical consultant and nonresident senior fellow at the Atlantic Council Turkey Program with thirty-two years of government service both in uniform and as a civilian.

Assad’s fall is a once-in-a-lifetime opportunity for the region

The Assad regime, which has ruled Syria since 1971, was deeply authoritarian, a key part of Iran’s regional influence and the destabilization of the region, and the author of countless human rights abuses. Its collapse presents both challenges and opportunities for Syria, the region, and the international community.

Syria

The fall of the Assad regime could pave the way for political reform, democratization, and the rebuilding of a war-torn nation. With Assad gone without resistance, there is an opportunity to create an inclusive government that represents Syria’s ethnically and religiously diverse population, fosters economic recovery, and allows refugees and internally displaced persons to return. The Biden administration should work with international partners to support a transition to such a government, and ensure that all stakeholders, including opposition groups, civil society, and minority communities, have a voice in shaping Syria’s future. The Biden administration should also prioritize immediate stabilization and humanitarian funding to rebuild infrastructure, provide healthcare, and support the momentum for a quick return of refugees and displaced persons. The resumption of the United Nations (UN)-led Damascus-based humanitarian response across Syria to prevent the situation morphing into chaos is also an important step to support.

While engaging with Hayat Tahrir Al-Sham (HTS), a US- and UN-designated terrorist organization, will present its challenges, the designation presents important leverage for the United States and international partners. The Trump administration, through dialogue with Turkey, could use that leverage to ensure HTS walks the walk as an acceptable actor within the Syrian scene and affirm it is no longer threatening US or regional security. The next US administration, working through international organizations, should also focus on fostering economic recovery and preventing the re-emergence of extremist groups.

The region

Assad’s fall completely disrupts the influence of Iran and Hezbollah, which have heavily supported and depended on the Assad regime. It will also decrease sectarian tensions fueled by the regime’s survival, reducing the risk of regional spillover conflicts. The United States should use this opportunity to coordinate a more firm regional policy toward Iran’s malign activities. Moreover, a power vacuum in Syria could lead to regional instability and risk Syria becoming a field for regional competition over hegemony, potentially creating more chaos and empowering extremist groups if not appropriately managed.

A stable, post-Assad Syria could catalyze peace and cooperation among neighboring states, but that requires serious diplomatic engagement from the United States with the region. To that end, the United States should engage in multilateral diplomacy with Turkey and Qatar and mediate responses with key regional stakeholders, including Saudi Arabia, the United Arab Emirates, Israel, and Jordan, to ensure a coordinated approach to Syria’s stabilization. Encouraging dialogue between adversarial states could also help reduce tensions and foster cooperative security arrangements.

The United States

For the United States, Assad’s collapse helps counter terrorism, curb Iranian influence, and promote stability in the Middle East. The fall of Assad will end his regime’s policy of sponsoring terrorism, which lasted for decades. It will weaken alliances between Iranian proxies and diminish the power of Russia in the region. However, it also poses the risk of prolonged instability, requiring the United States to engage diplomatically in shaping the outcome. US sanctions could be a helpful tool if sanctions removal could be linked with concrete progress toward a stable and inclusive governance model that contributes to the region’s stability.

The fall of the Assad regime presents an opportunity to address longstanding issues in Syria and the region. However, it is not a panacea and could lead to further instability if not carefully managed. The Biden and Trump administrations must adopt a balanced and strategic approach, focusing on inclusive governance, humanitarian support, and regional stability. An opportunity of the kind that now presents itself in Syria comes only once.

—Qutaiba Idlbi is a senior fellow with the Atlantic Council’s Rafik Hariri Center and Middle East Programs where he leads the Council’s work on Syria.

A moment for Israel and Gulf states to reshape the region’s future rather than react to it

The overthrow of the Syrian regime was so long coming and yet, shockingly, so rapidly achieved. The fall of Assad provides immediate closure on his rule in Syria, even as his horrific brutality will continue to echo for decades. But the sudden end of the Assad era leaves open the question of what comes next—with significant reasons for caution and concern that there could be fragmentation and chaos in the country. But no matter what follows in Syria, the implications of Assad’s departure will reverberate throughout the region.

For Israel, the overthrow of the regime is almost certain to be seen with mixed emotions, as the Israelis are uncertain if the devil they know will ultimately be replaced by a new devil they won’t. But there is opportunity, as well. Israel is unlikely to take a public victory lap but is entitled to one. The reality is that it was Israeli strikes in Lebanon over the last few months against a wide range of Hezbollah officials and weapons caches, and strikes in Syria preventing resupply to Hezbollah, that weakened the group to the point that Syrian opposition forces felt confident they could take advantage and try to capture Aleppo. Doing so required opposition forces to be confident that there wouldn’t be (sufficient) reinforcements to the Assad regime from Hezbollah, as had been a key issue in the past.

While Israel may not have intended or planned for the Syrian opposition to take advantage and use this development to overthrow the regime, Israel would be wise to immediately leverage it as a point of commonality and use it to seek out a quiet, private engagement with emerging leaders. If Israel wants to better ensure its security in the north, it should reach private, serious agreements with a new Syrian government that the country won’t be used to transfer weapons to Hezbollah to rebuild the group. Having a Lebanon that is in line with the Taif agreement and not dominated by Hezbollah, and a Syria not allied with Iran, would better ensure Israel’s long-term peace and security than any amount of interdiction or other strikes could.

Gulf states—some of which had assumed the Assad regime was here to stay and re-welcomed him and Syria into the Arab League—are likely to have mixed reactions about his fall and the next steps they should take. While Doha might be more inclined to provide financial resources for whatever government emerges in Damascus, long-standing concerns by Abu Dhabi and Riyadh over Islamist-led governments, combined with a reluctance simply to give away free money, as opposed to investing in countries, may cause them both to wait to see what leadership actually emerges in Syria.

It’s too early to know if the overthrow of the Assad regime will bring greater prosperity to the Syrian people and security to the region—ultimately the Syrian people will determine their future governance. But moments like this are rare and all too fleeting. If Israel, Gulf states, and other regional actors are wise, they’ll take this moment as an opportunity to try to shape the region’s future and not just react to it.

—Jonathan Panikoff is the director of the Atlantic Council’s Scowcroft Middle East Security Initiative and a former deputy national intelligence officer for the Near East at the US National Intelligence Council.

Assad should still be held accountable under international law. Here’s how.

Syrians have worked thirteen long years to take down their dictator—and an even longer fifty-plus years if you count the whole of the now defunct Assad dynasty. The international community must center Syrians in this moment, respect their aspirations for their country, and support them in achieving the pluralistic vision of a free, democratic Syria that so many fought for with their lives and livelihoods.

Even before the shock of Assad’s overthrow has worn off, Syrians who have spent more than a decade working on political processes, justice initiatives, and social change are swinging into action to realize the goals of their hard-won revolution.

On the justice front, the international community, global institutions, and national courts can take immediate action to support Syrians.

First, the chief prosecutor of the International Criminal Court (ICC) can hold Assad and his former officials to account by swiftly opening a preliminary examination into transboundary crimes in the Syrian conflict. The ICC’s mandate in the matter would be limited to crimes against humanity of deportation, persecution, and other inhumane acts committed against Syrian civilians who fled to Jordan, an ICC member state. However, initiating a preliminary examination into these crimes would send a strong signal that the ICC is fit for purpose and that Assad will not continue to enjoy impunity for some of the worst crimes committed in this century. And ICC member states can support this push by making their own referrals to the court, similar to their referrals on Ukraine, Palestine and Afghanistan. In tandem, efforts should be made to encourage any interim government in Syria to accept the jurisdiction of the court, similar to how Ukraine did in 2014, with a path to eventual ICC membership once a proper governance structure is established and laws passed.

Second, France can proceed with its Assad case. In June a French appeals court upheld an arrest warrant against Assad, then a sitting head of state, for chemical weapons attacks against Syria’s civilian population. This was precedent setting, due to questions around Assad’s head of state immunity. With that question no longer in dispute, the proceedings should move ahead and with the option for in absentia trials in the French system—where the defendant does not have to physically appear. This means that Assad’s reported presence in Moscow with a refusal to appear or inability to be extradited will be irrelevant to evidence being heard on this critical chapter in Syria’s conflict. This case in France is just one of many universal jurisdiction processes that are currently done, in progress, or anticipated in national courts with the ability to prosecute alleged perpetrators in the Syrian conflict for war crimes and crimes against humanity. All those processes must continue and be supported by outside countries, particularly as more former Assad regime officials responsible for violations may try to leave Syria in this moment.

Lastly, there will be open questions about what will happen to the case that The Netherlands and Canada have brought against the Assad regime at the International Court of Justice (ICJ) for violations of the Convention against Torture. Because the ICJ adjudicates disputes between states and not against individuals, Assad himself would not “stand trial” there—rather this will fall into a new twist on a gray area that other country disputes have found themselves in, such as those involving the former Yugoslavia, Myanmar, and the Taliban. Either way, Syrian victims and survivors should be centered in these considerations and all attempts made to secure justice and redress for them.

—Gissou Nia is the director of the Strategic Litigation Project at the Atlantic Council. She previously worked on crimes against humanity cases before the International Criminal Court and is counsel on submissions to the ICC Office of the Prosecutor.

Russia is losing its Middle Eastern power projection—and great-power claims

The liberation of Damascus by Syrian rebels, led by Hayat Tahrir al-Sham (HTS), which is designated by the United States as a terrorist group, reflects the increasing degradation of the multinational ground forces supporting the Assad regime. But it also reflects a likely catastrophic loss of Russia’s significant investment in the Assad regime and Russia’s foothold in the Mediterranean.

The collapse of the Assad regime represents a contraction of Russia’s ability to project power in the region—and thus its claim of being a great power. Russia may now face losing a warm-water naval base as well as an air base. The damage to Moscow’s ability to maneuver in Africa and the Mediterranean may have a strategic impact on Russian influence across the world.

—R. Clarke Cooper is a nonresident senior fellow with the Atlantic Council’s Scowcroft Middle East Security Initiative and is the founder and president of Guard Hill House, LLC. He previously served as assistant secretary for political-military affairs at the US Department of State.

Assad’s fall may not be a total loss for Putin

The fall of Syria’s Assad regime, which Moscow had backed for so many years, is a severe blow to Russian influence in the Middle East. There is, however, one silver lining in it for Moscow: the fall of the pro-Russian Assad regime will not lead to its replacement by a pro-Western regime, as occurred in the “color revolutions” of earlier years. Russian President Vladimir Putin’s ongoing good relations with other Arab governments—including Saudi Arabia, the United Arab Emirates, Qatar, and Egypt—are also likely to remain strong.

The real question now is whether Russia will be able to keep its naval and air base in Syria. The anti-Assad forces that have just prevailed may not be inclined to let them stay—especially since Russian warplanes based in Syria had repeatedly bombed them right up until recently. If, however, a power struggle now ensues among the victors in Syria, this may provide Moscow with an opportunity to work with some against others. One possibility is Russian support for an Alawite statelet along the Mediterranean coast where its two bases are located (the Alawite minority was the backbone of the Assad regime). Moscow can even cite US support for the Syrian Kurdish statelet in northeastern Syria as setting a precedent for Russia doing something similar for the Alawites.

Still, Moscow retaining its naval and air base may not be possible, either because a new Sunni-dominated Syrian government proves to be strong and expels the Russians or because Syria descends into such chaos that the safety of the bases cannot be maintained.

—Mark N. Katz is a nonresident senior fellow with the Atlantic Council’s Middle East Programs and professor emeritus of government and politics at the George Mason University Schar School of Policy and Government.

With its proxies crumbling, Iran will rethink its security strategy

The fall of Assad is another nail in the coffin of Iran’s Axis of Resistance, which will prompt Tehran to reconsider its security strategy.

In a matter of weeks, Iran lost its pillars in the Axis of Resistance. After the heavy blow that Hezbollah suffered at the hands of Israel, the fall of Assad is a fatal strike on Iran’s influence efforts in the Middle East. There is of course a connection between the two, since it is clear that the weakness of Hezbollah and especially the elimination of its leader Hassan Nasrallah, who was personally committed to saving Assad, accelerated the overthrow of the Syrian regime.

It is difficult to overstate the importance of the Assad regime to Iran. Without him, Iran’s ability to rebuild Hezbollah’s power has weakened dramatically, as has its ability to threaten Israel from this arena. But above all, Syria enabled the same territorial continuity from Iran to Lebanon that established the “Shia crescent” and gave Iran unprecedented strategic depth while keeping the wars away from its borders.

But the collapse of the regime shows how much the tools in Iran’s hands to save Assad without Hezbollah were almost non-existent. This fact also indicates Iran’s weakness and its limited ability to influence what happens in the Middle East without its proxy. Now Iran will have to calculate a new course and find a solution that will strengthen its ability to deter Israel and the United States on its own, with no real support of its proxies.

Iran will likely now seek to strengthen its conventional capabilities, including fast-tracking its Su-35 deal with Russia, rebuilding its air defense system, and replacing its missiles that were damaged in the Israeli attack. But Tehran will also likely think about whether to update its nuclear strategy, either to advance toward a nuclear bomb or to submit more significant compromises to the West in hope of reaching a nuclear agreement that will reduce the danger of an external attack on Iran. And so, the dramatic events in Syria also require a focus on what is happening in the decision-making circle in Tehran.

—Danny Citrinowicz is a nonresident fellow with the Atlantic Council’s Middle East Programs and a member of the Atlantic Council’s Iran Strategy Project working group. He previously served for twenty-five years in a variety of command positions units in Israel Defense Intelligence.

Will Yemen’s Houthi rebels be the next Iranian proxy to fall?

The fall of the Assad regime removes yet another major node in Iran’s network of allies and proxies, making the Houthi rebels in Yemen an even more indispensable ally. Yemen’s Houthis and their leader, Abdul Malik al-Houthi, have already assumed a more prominent role within Iran’s Axis of Resistance after the loss of key leaders within Hamas and Hezbollah such as Yahya Sinwar and Hassan Nasrallah. The loss of the Assad regime will strain Iran’s presence and influence in Syria, meaning that Tehran may double down on its support for the Houthis—who have continued claiming attacks on Israel and international maritime traffic in recent weeks—as a means to maintain influence in the region.

However, the regime’s ability to provide the Houthis with resources—including arms shipments—could be impacted due to possible disruptions to Iran’s supply routes that run through Syria as well as Iraq and Lebanon. At the same time, Yemeni government forces and their allies in the region may find inspiration in the Syrian rebels’ success in overthrowing the Assad regime and undertake a new effort to militarily expel the Houthis in Yemen, potentially reigniting the war after almost three years of relative calm in the country.

—Emily Milliken is the associate director of media and communications for the N7 Initiative at the Atlantic Council’s Middle East Programs.

Postwar planning for Syria is now at the top of the agenda

The United States was not directly involved in the ouster of Assad, but the United States has a huge stake in what comes next. A more stable Syria that frees itself from Iranian and Russian dependence, doesn’t export terrorism, lets its refugees come home, stops being a transit country for aid to Hezbollah that threatens Israel, stops treating the drug Captagon as a source of foreign exchange, and eventually lives alongside Israel in peace, perhaps joining the Abraham Accords in time: all these unthinkable things are now possible. But this will not happen spontaneously, without outside help and support. Postwar planning for Syria needs to go into high gear.

The basic infrastructure exists to give immediate aid to the Syrian people, but it needs funding and political support from the United States, along with European and Middle Eastern countries. The immediate question for the Biden administration is whether to allow the US Agency for International Development (USAID) and other US-backed aid agencies to send urgent help into Syria. And while the United States has limited ties with HTS, which Washington has designated as a Foreign Terrorist Organization, HTS is not the only group in the Syrian opposition that now controls Damascus. Who is dominant among those groups depends on who gets what kind of external aid. While Turkey’s aid to these groups is done to support Turkey’s national interests, most of Turkey’s interests and the United States’ are aligned in western Syria. The United States can cooperate closely with Jordan and Israel, with whom its interests are also aligned.

The incoming Trump administration will have different voices competing for Trump’s ear. The isolationist wing will be arguing that other governments should take the lead in postwar Syria. While those voices are not totally wrong, other voices will remind Trump that weakening Iranian influence, supporting Israel’s security, and peace in Lebanon are, collectively, one of the biggest wins that a Trump administration could hope to achieve. Peace in the Middle East is one of Trump’s greatest ambitions, and if he listens to the right advisers, he could go a long way toward achieving it.

—Thomas S. Warrick is a nonresident senior fellow in the Scowcroft Middle East Security Initiative and a former deputy assistant secretary for counterterrorism policy in the US Department of Homeland Security.

Among Syrians, there is a sense that nothing is guaranteed and everything is possible

There is a certain pragmatism to what we are seeing now in Syria, not just in how the fighting forces coordinated but also in the attempt to preserve a temporary governance structure. The lessons of past failures are being taken into consideration, although it’s too soon to tell if it’s just lip service or if it will hold. What has transpired over recent days, though, is in many ways uniquely Syrian—coming at a time when most of the world had shown a willingness to write off Syria and the hundreds of thousands killed, tens of thousands detained, and millions displaced, and to “normalize” relations with the Assad regime.

“Stay out of it” is a message I’m hearing from a lot of Syrians who have already learned the bitter lessons of both abandonment and extreme meddling by external actors. Syrians will be quite reluctant to trust any form of outside interference. But at the same time there is an awareness that the country’s new leadership will need to make compromises and bargains. There is a recognition that nothing is guaranteed, and that Syria’s future is filled with risks and the potential of more violence—be it in the form of a civil war or Israel encroaching on more Syrian territory. There is a certain wariness, apprehension, and anxiety coupled with the elation that we’re seeing. No one knows at this stage what is going to happen next. Everyone is spinning, from those in the streets to those in governments around the world.

—Arwa Damon is a nonresident senior fellow at the Atlantic Council’s Rafik Hariri Center and Middle East Programs; the president and founder of the International Network for Aid, Relief, and Assistance (INARA); and a former international correspondent for CNN.

The new Syria could normalize relations with Israel and reshuffle the region

After more than sixty-one years of the Ba’ath party’s rule and thirteen years since the uprising ignited in Daraa, Syria’s agony has finally reached a denouement, and the Syrian people can finally obtain closure and reclaim agency over their political future. While other Arab Spring countries were able to topple tyrannical leaderships and change regimes with varying success or failure, Syrians were held hostage by foreign powers’ interference and calculus, which maintained Assad at the top of a failed political system and forcibly displaced more than fourteen million Syrians internally and externally. These events also mark the end of the last of the Nasserist Arab nationalist regimes in the region—the end of an entire despotic ideology.

The current political alternative to Assad is far from ideal as the opposition remains fragmented. Rebel leader Abu Mohammad al-Jolani has a questionable past tied to international terrorism, and the rebel factions have various allegiances to regional powers, especially Turkey. However, the Syrian people should be allowed to determine their own sovereignty and to establish the transition of power they wish for their country without international guardianship. They will also have to resolve some existential questions about relations with their immediate neighbors. It is not out of the realm of possibility to imagine new leaders in Damascus normalizing relations with Israel and reshuffling regional dynamics to mark a true rupture with the Ba’athist doctrine.

Once the dust settles, there will surely be arduous negotiations over Syria’s future among the new masters of the land, yet initial indications seem promising. So far, the rebels are maintaining a plural and inclusive discourse calling for national unity and a peaceful transition of power. Jolani gave instructions not to desecrate shrines and minority cultural heritage sites, such as the Sayyeda Zaynab sanctuary. Islamic State of Iraq and al-Sham (ISIS) militants had vandalized the shrine, a revered location for Shia Muslims, and the incident became one of the reasons Shia militias, especially Iraqi Popular Mobilization Units, engaged in fighting in Syria. Even the traditionally pro-Assad Alawite cities, including Latakia, seem to be relieved that the Assad era is over, which is a positive indication that minority groups would likely join the political transition rather than engage in yet another costly civil war.

—Sarah Zaaimi is a nonresident senior fellow for North Africa and deputy director for communications at the Atlantic Council’s Rafik Hariri Center & Middle East programs.

Arab leaders won’t like the shattering of Syrian stability

Regimes in the Middle East most value stability. Political change of any kind, violent or non-violent, is considered a threat, not an opportunity. So there will be no congratulations for the Syrian people emerging from Arab leaders and no rush to embrace a new regime that is likely to be dominated by Sunni fundamentalists. There is unlikely to be a rapid response to the needs of the Syrian people as they emerge from the nearly fifty-four-year rule of the Assad family. Most Arab states were openly supportive of Bashar al-Assad, preferring a cruel, Iranian-supported dictatorship to any other options.

Among Arab states, perhaps only Qatar, which supplied aid to some Syrian opposition forces, will step forward to help now. Syria’s neighbor Israel has long preferred the quiet that the Assad family was able to impose on their border and will be wary of what comes next. Most Arab states (and Israel) will also view the revolution in Syria as a net plus for Turkey and therefore a net minus for Arab interests. Meanwhile, Assad’s supporters in Moscow and Tehran will be left to wonder how things went so badly so quickly.

—Richard LeBaron is a nonresident senior fellow with the Atlantic Council’s Middle East Programs. He is a former US ambassador to Kuwait and a former deputy chief of mission at the US embassy in Israel.

Libya offers important lessons for Syria’s next steps

It’s true that making comparisons between different countries is always a delicate and insidious effort. Nevertheless, the recent events in Syria bring to mind the events in Libya that brought the Qaddafi regime to a bloody end in 2011. Has Libya’s recent history anything to teach to Syria and its people?

While joyful manifestations and apparent happiness are welcome and to be expected, they should be limited in time and scope so as not to alienate and marginalize the supporters of the previous regime (even if they only consist of a small minority). This would with time form a hardcore group of opponents to any process of opening up and developing institutions. In other words, regimes that have held power for decades have deep roots, and they can often do fatal damage in the aftermath of their ouster.

A second lesson Libya can teach Syria is how to deal with foreign powers, whether regional or global. Libyans allowed foreign powers to divide and separate them in order for each one of them to exercise at least a veto power on political and economic developments. The new Syrian elites should strive to find a common denominator among themselves, and instead of rushing to elections they should organize a National Reconciliation Conference to draft the main principles and values that apply to all Syrians. Only after this moment of deep reflection and foundation-building of a new national interest based on a shared identity should the country proceed to elections.

—Karim Mezran is director of the North Africa Initiative and resident senior fellow with the Rafik Hariri Center and Middle East Programs at the Atlantic Council.

The new Syria can be a friend to the US—if the Trump administration seizes the moment

The transition in Syria presents an opportunity for the United States to regain influence in Damascus and encourage any emerging Syrian authority to contribute to regional stability, coexistence, and peace. The incoming Trump administration should prioritize assisting a transitional government in holding free and fair elections, enabling Syrians—who have endured years of brutality under dictatorship—to shape their own future. A future Syrian administration is likely to welcome US support and may even become a friend of the United States, given the widespread animosity toward Iran and Russia due to their support for the Assad regime.

Will the new administration see this opportunity? At forums I have attended across the region over the past month—from Sir Bani Yas in Abu Dhabi to the Middle East Policy Forum in Dohuk and the Doha Forum in Qatar—policymakers and experts consistently expressed concern over the unpredictability of President-elect Donald Trump’s approach to the Middle East. His policies remain a mystery, likely subject to rapid change depending on the influence of his advisers and who’s the last person in the room with him. However, Trump needs to recognize the value in supporting an orderly transition and a stable future for Syria, where Iran and Russia’s influence has been significantly diminished.

The Trump administration should also seize the opportunity by facilitating dialogue between the new Syrian administration and Israel. And it should collaborate with Qatar and Turkey, which played critical roles in the rapid progress leading to this moment, to help reintegrate Syria into the rules-based international order.

—Joze Pelayo is an associate director at the Atlantic Council’s Scowcroft Middle East Security Initiative.

There is much to be done to prevent a terror sanctuary from emerging

On Sunday, Syrian rebel factions collectively defeated and ended the regime of Assad after a long and bloody civil war. Assad and his father before him were dictators who hailed from the Alawite Shia religious minority that accounts for approximately 10 percent of the Syrian population. They ruled with an iron fist, brutalizing and oppressing the remaining 90 percent of the population.

Assad’s departure is being widely celebrated by all facets of Syrian society. After thirteen years of fierce fighting, rebel groups of various ideologies, ethnicities, religions, and political agendas achieved what no state power has been successful at doing through the elements of power they have sought to employ.

With the fall of the regime, there will no longer be a Shia government in charge of Syria. This effectively ends the famed “Shia Crescent,” which allowed Iran to influence if not control foreign and security policy stretching from Tehran through Baghdad to Damascus and southern Lebanon. Unlike in Iraq, democratic elections in Syria will not produce a Shia-led government given the country’s demographics. This will make it more difficult for Iran to rearm and support Hezbollah and other proxies in the region, as Syria had served as a logistics hub for Iranian weapons. The land and air bridge that allowed Iran to arm and resupply Hezbollah and other terror groups and militias in the region is gone.

While there is much to celebrate—the end of Iran’s stranglehold, the promise of newfound freedom for the Syrian people—the road ahead is fraught with uncertainty and risk. In the past twenty-four hours, a rebel faction with historic ties to al Qaeda that was designated as a terrorist organization by the United States since 2018 has taken control of Damascus. Israel has seized territory in the buffer zone with Syria and bombed strategic weapons sites. And Turkey has bombed Syrian Kurdish rebels backed by the United States, according to reports I have seen from the US-backed Syrian Democratic Forces.

The international community should seek to achieve the following objectives in Syria to prevent a failed state that can be used as a sanctuary and launching point for transnational terrorism:

Prevent an escalation between rebel factions and encourage unity in victory
Deny terror groups access to strategic weapons and systems left by the regime
Protect ethnic and religious minorities
Encourage and enable democratic institutions and elections

—Alex Plitsas is a nonresident senior fellow with the Middle East Programs’ N7 Initiative and former chief of sensitive activities for special operations and combating terrorism in the Office of the Secretary of Defense.

Hezbollah is now in the worst position of its four-decade history

BEIRUT—The stunning and sudden collapse of the Assad regime threatens to greatly complicate the geostrategic links between Iran and Hezbollah in Lebanon and raises the possibility that the Iranian-led coalition known as the Axis of Resistance is coming apart. Since assuming power in July 2000, Assad had been the linchpin connecting Iran in the east of the region to Hezbollah in the west, offering strategic depth, a source of weaponry and political support and serving as a conduit for the transfer of Iranian weapons. The critical importance of the Assad regime to Tehran was amply demonstrated more than a decade ago when Iran and Hezbollah took the unprecedented and controversial step of openly intervening in the Syrian civil war to protect their ally from being overthrown.

Now that Assad and his regime are gone, Hezbollah is isolated in Lebanon at a time when it is recovering from the blows of a devastating thirteen-month war with Israel. The November 27 ceasefire agreement between Israel and Hezbollah calls for the prevention of weapons being transferred into Lebanon from Syria. Although Hezbollah has said it will abide by the ceasefire agreement, the new realities in Syria suggest that even if the organization wanted to restock its arsenal with weaponry coming from Syria, it may no longer be possible. The collapse of the Assad regime will likely lead to the eventual emergence of a new form of governance that better reflects the Sunni-majority demographics of Syria, one that is unlikely to view Iran and Hezbollah with much warmth. That and the continued aggressive behavior of the Israel Defense Forces in Lebanon (the ceasefire notwithstanding) places Hezbollah in the most uncomfortable position in its forty-two-year history.

—Nicholas Blanford is a nonresident senior fellow with the Atlantic Council’s Middle East Programs.

There are three scenarios for Syria’s future—and the US can shape which one emerges

Given the enormity of the Assad family’s fall from power, it is impossible to predict the full extent of the effects on the region. Three possible futures await Syria:

A perfect world: On the surface, the fall of the Assad regime appears to be a net positive for the United States and its allies in the region. A cruel despot is gone, and Iran no longer has a land-based supply line to its proxies in Syria and Lebanon. However, this future depends on Hayat Tahrir al-Sham (HTS) and the other factions that banded together against Assad choosing to work together and govern responsibly. Due to the multiple groups and external actors in Syria, this path is unlikely to occur absent a responsible guiding hand.
Chaos and violence: A more likely scenario, unfortunately, is a culmination of the same societal and religious-ethnic cleavages that have been witnessed across the Middle East because of the Arab Spring. Libya collapsed following the removal of Muammar Gaddafi, Yemen effectively remains mired in internal conflict, while other states in the region have largely recovered from or avoided the effects of the Arab Spring. Syria may follow the path of Libya and descend into chaos. Competition for power among Syria’s different armed groups would create havoc for the Levant region.
Factionalization: This future would involve a continuation of many of the present partitions within Syria. While HTS recently expanded its control south through Damascus, other areas of the country remain under the control of other armed groups. Continued disunity and ungoverned spaces will allow for a resurgence of extremist activity, as well as the potential return of Iran and its proxies.

The United States can help determine which future comes to pass. Instead of watching events develop in Syria, the Biden administration could act to shape the initial steps taken by any new governing body in Damascus. First, active US diplomacy and humanitarian assistance could guide a new governing body while reinforcing the principles of inclusion and accountability. Second, Syria needs considerable reconstruction assistance. The amount of need will far outstrip the organizational ability of any new government, as well as the absorptive capacity of remaining Syrian institutions. The United States, other countries, and international organizations can fill organizational gaps and accelerate reconstruction efforts. Third, millions of Syrian refugees will want to return home and are more likely to do so in an environment of good governance and active reconstruction. Putting Syria on the path to recovery is the best insurance to prevent a return of Iran and its proxies, as well as a return of extremists operating out of ungoverned spaces.

Initial steps taken by the White House and the State Department will be instructive. If we see calls between US President Joe Biden and regional heads of state, and if we see regional diplomacy led by Secretary of State Antony Blinken, then it will be an indication that the Biden administration is trying to fashion a positive future for Syria. Finally, if we see the appointment of someone resembling a Syria reconstruction envoy in the waning days of the Biden administration, this person may be able to use the intervening weeks before the Trump administration takes office to help guide the new government as well as channel regional assistance to Syria.

The region recognizes the need to rehabilitate Syria, so there should be no expectation the United States needs to pay for all of Syrian reconstruction. But the United States should take immediate steps to avoid the dire circumstances that played out in other post-Arab Spring countries. There’s no reason Syria’s future should be worse than its past.

—Daniel E. Mouton is a nonresident senior fellow at the Scowcroft Middle East Security Initiative of the Atlantic Council’s Middle East Programs. He served on the National Security Council from 2021 to 2023 as the director for defense and political-military policy for the Middle East and North Africa for Coordinator Brett McGurk.

The lesson for other Arab regimes—illegitimate governments cannot be propped up forever

Since 2011, Syrians have dealt with a double moral calamity: the sectarian vengeance of an endlessly brutal regime and the indifference of the outside world, even as Russian military and mercenary forces swept in to rescue it from collapse, and children were tortured, starved, or killed in staggering numbers.

As the Syrian people convulse with rapture and relief, the celebrations are no doubt stalked by sorrow and made heavy by the weight of more than a decade of darkness and loss. The joy of the present must also be tempered by a lack of clarity around what is to come. There are many moving parts in Syria right now, which means that there are many possible futures.

While Syria’s future is uncertain, there are clear messages for other Arab regimes. For example, rival governments in Libya and military rulers in Egypt have similarly hollowed out the state, turning to smuggling and crime to remain afloat and apart from their subjects, and inviting comparisons with gangsterism and the mafia. Recent events in Syria call into question the sustainability of this path, along with the broader strategy of accursing the population and spurning the very concept of legitimacy.

The fall of Assad also calls into doubt the value and dependability of a defense alliance with Russia, as well as the ultimate capacity of foreign militaries, militias, and mercenaries to indefinitely prop up governments that have been rejected by their people.

The seemingly removed and unconnected events of Russia’s decision to invade Ukraine in February 2022 and Hamas’s attack on Israel on October 7, 2023, have resulted in a butterfly effect in Syria, with consequences that will cascade through the region.

As for the United States, while Trump has made plain that he is not interested in developments in Syria, it is likely that, one way or the other, developments in Syria will be interested in him.

—Alia Brahimi is a nonresident senior fellow in the Middle East Programs and host of the Guns for Hire podcast.

The post Experts react: Rebels have toppled the Assad regime. What’s next for Syria, the Middle East, and the world? appeared first on Atlantic Council.

Why Georgia’s pro-democracy protests failed

Alex Scrivener — Thu, 28 Nov 2024 19:49:19 +0000

On the cold, damp morning of November 25, around two thousand people held a gloomy protest in front of Georgia’s parliament building. As ultimately unnecessary phalanxes of police protected the building, the determined last holdouts of Georgia’s once-huge protest movement were left to contemplate how they came to be so comprehensively defeated.

This protest, against what the opposition and the country’s president have called a rigged election, was meant to be big. The opposition called for people to take days off work and mobilize overnight to prevent the new parliament from convening.

Instead, what occurred in front of the parliament building was barely a protest. It was more like a funeral—and not a particularly well-attended one. The hundreds of thousands of pro-European Union (EU) citizens who filled the streets in the spring to protest the government’s crackdown on civil society largely elected now to stay at home.

Unless something drastically changes, it seems like the ruling Georgian Dream party will be able to consolidate some form of authoritarian governance and that the country’s EU membership hopes are in tatters.

But most painfully for pro-EU forces, Georgian democracy did not die heroically in a hail of Russian bullets, or under the batons of riot police. It appears to be dying because it’s too cold outside and Georgians are too depressed and nihilistic to resist.

How did this happen? And how did a Georgian Dream party seen as being a vector for Kremlin interests manage to win in a country that consistently polls as one of the most anti-Russian and pro-EU in the world? How does an election almost universally criticized as being insufficiently free and fair lead not to sustained protests but to passive acquiescence to authoritarian rule?

Like its role model of Viktor Orbán’s Hungary, Georgia demonstrates that defeating democracy is terrifyingly easy if you use the right tactics. The playbook will no doubt be studied carefully by would-be dictators across the world.

Here is how Georgian Dream stole an election and got away with it:

1. Find the Goldilocks level of election manipulation—not too much, not too little

Discussion of rigged elections often invokes places where the dictator wins by ego-boosting but comically large and improbable margins. But the key to modern authoritarianism is to nudge the scales just enough to win and still be believable. This requires using a range of methods that individually don’t seem significant but collectively get the regime over the line.

Georgian Dream is expert at this. Vote-buying is one such tactic. Stories abound of voters getting paid in exchange for their votes. But when that fails, intimidation is also very effective. Many polling stations had gangs of burly intimidating men present as “observers” but who in fact enforced the ruling party’s interests. The ruling party also had video cameras inside most polling stations, which is legal in Georgia. This was what Iulian Bulai, the head of the Council of Europe parliamentary observation mission, meant when he said there was a feeling of “Big Brother is watching you” during the election.

Combined with serious issues related to the secrecy of the ballot—the Organization for Security and Co-operation in Europe mission reported that “voter secrecy was potentially compromised in 24 per cent of observations”—this made for an intimidating environment.

There is also growing evidence of direct, brazen fraud alongside the softer methods. Statistical analysts have pointed to the presence of a so-called “Russian tail” in turnout patterns, which is indicative of fraud and multiple voting. Reports also abound of multiple voting using ID cards either taken or bought from other voters, an allegation recently corroborated by a whistleblower who claims that his team was paid to vote 163 times this way.

But the key to all of this is moderation. The regime did not rely on a single method. When caught red-handed (as in one case where ballot stuffing was caught on camera in southern Georgia) this enabled the authorities to hold up their hands and call it an isolated incident. The aim was not to emerge with a Vladimir Putin-style 80 percent or more of the vote, but to cheat just enough to boost the ruling party from the 40-42 percent the exit polls suggested to the 54 percent it officially got.

2. Embrace older, rural conservatives, and use their fears and homophobia

This is a tactic common for right-wing populist movements in many countries. From the Brexit campaign to Orbán’s Hungary, the playbook looks quite similar. But the version of it that works best in Eastern Europe adds extra emphasis on anti-LGBTQI+ attitudes. Before the election, Georgian Dream adopted a law that makes it a crime to spread what it terms “LGBT propaganda.” It has also taken advantage of the older generation’s weaker fealty to democracy and involves a close embrace of the country’s powerful and thoroughly Russian-infiltrated Orthodox Church.

Georgian Dream also used fear very effectively to mobilize older voters.

“No to War–Choose Peace” was a key ruling party slogan, and posters featured images of destruction in Ukraine juxtaposed with Georgian monuments to drive home the point. The message was very much one of “vote for us or Russia will invade again.” Georgians may not have much love for Russia, but there is little appetite for war.

3. Embrace the Kremlin . . . from behind an EU flag

Anyone traveling to Georgia during the election campaign would be forgiven for believing that Georgian Dream was the primary pro-EU force in the country. Their posters featured large EU flags and the slogan “Towards Europe with Dignity.” Despite constantly bad-mouthing Brussels and refusing to take the steps required for EU membership, Georgian Dream was careful to hide their amenability to Russian interests behind a patina of pro-EU messaging.

This message, although cynical, was not altogether false. Georgian Dream does see itself as part of a European project, albeit that of the European populist far-right represented by Orbán and the leader of the French National Rally party, Marine Le Pen.

The message gave ostensibly pro-EU but functionally anti-Western voters sufficient cover to vote in line with Russian interests without openly doing so.

4. Allow but ignore protests and free speech (unless it gets to a critical level)

A crucial difference between the new authoritarianism of Georgian Dream and the older version is the attitude toward free speech and protests. Old-style dictators do not allow any protests and seek to muzzle critical voices. Georgian Dream took the opposite approach of, to paraphrase Georgian Dream’s billionaire founder Bidzina Ivanishvili, letting them shout until they get tired.

During the spring, some of the biggest protests in Georgian history took place with hundreds of thousands of people in the streets to oppose the so-called Russian law, referred to this way by its detractors in reference to its origin as a piece of Russian legislation. The law demanded that civil society organizations register as nefarious-sounding “vectors of foreign influence” and was judged by the EU as being incompatible with membership.

For months, protests ground Tbilisi and other major cities to a halt. The regime occasionally responded with police brutality and the use of “titushky” thugs to beat up protesters. But overall, they allowed the protests to continue until they ebbed by themselves, as thoughts turned both to the summer holidays and to the October elections.

Ivanishvili was proved right. When the elections came, there was no more energy. The youth, having seen their spring protests fail, largely shrugged their shoulders and gave up. The government managed to survive by merely ignoring, rather than cracking down on, protesters. Particularly problematic individuals were singled out for arrests or beatings by regime goons, but these could be dismissed as isolated incidents.

5. Steal hope from the youth and encourage them to emigrate

The youth in Georgia, as in most places, are the main engine of social protest. They were the driving force behind the spring protests and were expected to form the backbone of postelection protests. But Gen Z are, by and large, missing in action on the streets of Tbilisi.

Talk to young Georgians and the overwhelming message one hears is one of hopeless resignation. Most dream of individual escape through emigration rather than collective liberation.

This is partly a result of the highly individualist culture that the low-trust, low-tax, Wild West model of capitalism in Georgia has produced. A once proud communitarian, neighborhood-oriented culture has been replaced by atomization and dog-eat-dog competition. This is true for everyone. But, unlike older generations, the youth has never experienced anything else and so tends to look for ways to run away rather than cooperate to win change.

As a result, institutions that serve as backbones for social movements in the West, such as trade unions and community campaign organizations, are weak and distrusted by young people in Georgia. It is difficult to build a revolution through Facebook alone, which means that there is a lack of coherent leadership or organization.

But the government itself has done everything it can to sow despair and hopelessness in the youth. The more young people give up and leave, the fewer votes any change-oriented alternative is likely to get.

6. Be corrupt, but also spread just enough money around to keep key groups quiet

Georgia has always been stuck between its national political aspiration of joining Europe and a stubborn economic reality that binds it to Russia. Despite preferential access to the EU market, Georgia doesn’t produce anything Europe wants to buy. Russia, however, devours many Georgian products, such as wine. The influx of Russian tourists and shady and potentially sanctions-evading “investment” has also created a wealthy elite dependent on financial flows from the north.

This inflow of wealth may not be benefiting ordinary Georgians, who still overwhelmingly live in or near poverty. But it is appearing in statistics, with Georgia currently enjoying double-digit economic growth. This extra money buys the support of some and the acquiescence of others.

Figures close to Georgian Dream control many of the major businesses and especially the dubious financial flows from Russia. This, combined with its control of the resources of the state and billionaire Ivanishvili’s net worth of a fifth of the country’s gross domestic product, gives it huge patronage.

Georgians may love Europe in their hearts, but their pockets (at least for a part of the elite) are being filled with Russian rubles.

7. Have an incompetent opposition

The failure of the protest movement was not merely a function of superior government strategy. It was also one of abject incompetence on the part of the opposition.

The opposition did not decide on an approach to the election until the last minute, with talks on alliances ongoing until just weeks before polls opened. When they did eventually consolidate into four major blocs, their campaigns were weak and generic. The biggest of these blocs, Coalition for Change, ran a poster campaign of generic images and the meaningless slogan “The future is yours.”

Opposition leaders barely bothered to leave the comfort of the major cities. And they appeared to spend more time lobbying in Washington, DC, and Brussels than they did talking to voters. This played into the government’s narrative that the opposition were all elitist “foreign agents” who held ordinary Georgians in disdain.

The continued presence of figures from the similarly authoritarian, albeit more pro-Western, previous government among the opposition was another hindering factor, albeit less so than in previous elections. The specter of a return to power of imprisoned former President Mikheil Saakashvili, while increasingly far-fetched, remained sufficient for a subset of voters to stay loyal to Georgian Dream.

But most shockingly of all, despite having spent the pre-election period warning about the potential for fraud and manipulation, the opposition appears to have been caught completely unprepared when the results came in. Opposition leaders made a statement refusing to recognize the results and then spent the next few weeks dithering while both international attention and passion among the Georgian public evaporated. The weeks of excuses and staggering incompetence merely served to convince the public that the battle was hopeless.

Alex Scrivener is the executive director at the Democratic Security Institute, an independent, nonpartisan think tank based in Tbilisi, Georgia.

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What to know about Russian malign influence in Moldova’s upcoming election

Victoria Olari — Fri, 18 Oct 2024 13:09:29 +0000

On October 20, Moldova faces a pivotal election that could reshape its future. A small republic in Eastern Europe, seemingly insignificant on the global scale, Moldova is engaged in an existential struggle for its democratic future—with Russia playing an open and unprecedented role in trying to sway the outcome.

Moldovans will vote on pro-Western President Maia Sandu’s bid for re-election alongside a referendum on whether to add the goal of European Union (EU) membership to the constitution. These elections are happening against the backdrop of Russia’s ongoing war in neighboring Ukraine, making the stakes particularly high. The outcome is being closely watched by international actors such as the EU and the United States, both of which have warned of Russian interference and hybrid threats aimed at destabilizing Moldova. As a country located at a strategic crossroads between the West and Russia’s self-styled sphere of influence, Moldova has been a key target for disinformation campaigns and other forms of foreign manipulation.

The results of this election will either bolster Moldova’s resilience against external pressures or leave it more vulnerable to foreign influence. Ultimately, the vote will play a decisive role in shaping Moldova’s political direction, security, and international alliances, with long-lasting implications for the country’s trajectory.

A victory for pro-Western forces would strengthen Moldova’s alignment with the West, while a win for pro-Russian factions could increase security risks by aligning Moldova more closely with Russia’s regional agenda.

Although Moldova is a young republic, it has earned recognition as a functioning electoral democracy, with all the elements that come with such a status. The country regularly holds elections and boasts a dynamic multi-party political system. Since the end of the Cold War, Moldova has shown its capacity for peaceful transitions of power between rival parties. Even during politically turbulent moments, like the 2009 “Twitter Revolution,” which shifted the leadership from a pro-Russian to a pro-European government, the democratic process remained orderly and intact.

For all the internal and external challenges Moldova has faced, it has managed to preserve the core principles of an electoral democracy. This time, however, it might be a different story.

Under the shadow of corruption and foreign interference

The October 20 elections are taking place in an environment clouded by what could be the largest case of electoral bribery in Moldova’s history. For months, Moscow has been actively involved in propping up certain factions within Moldova.

Millions of dollars in cash have reportedly been smuggled into the country by individuals connected to the fugitive, US-sanctioned oligarch Ilan Shor, circumventing law enforcement efforts to stop the illegal flow of funds. Authorities had organized searches at the airport to halt this parade of individuals traveling to Moscow to bring back clandestine cash. However, Russia has found other ways to channel funds into Moldova. Through the Russian MIR payment system, financial resources are reportedly now being funneled to Moldovan voters, especially through the financial networks in the Transnistria region—a breakaway territory that has long served as a base for Moscow’s influence operations.

Moldovan authorities have raised alarms about large-scale vote-buying, with the General Police Inspectorate documenting cases of bribery involving at least 130,000 citizens and more than fifteen million dollars in illicit transfers from Russia in September alone. In reality, the scale might be significantly bigger, with some officials estimating it at around $100 million for the entire campaign.

Funds are being funneled into schemes designed to establish a national vote-buying network, resembling financial pyramids with intricate layers of transactions aimed at evading scrutiny. These funds range from “social” allowances for Moldovan pensioners to salary “bonuses” for employees of local government structures in the autonomous territory of Gagauzia. The money is now also, according to police and independent reporting, finding its way into the hands of so-called local “coordinators” and “supporters” of the “Victory” electoral bloc, a political entity created in and reportedly controlled from Moscow.

But it’s not just money that’s flowing into Moldova; disinformation is also playing a pivotal role in this election. The Atlantic Council’s Digital Forensic Research Lab is tracking the spread of fake letters purportedly from public institutions and the incitement of hate speech and media attacks. Using communication tools such as Telegram, Moscow’s operatives are apparently paying individuals to generate and distribute disinformation on a massive scale. For example, a chatbot called “STOP UE/СТОП ЕС” is designed to recruit individuals against the EU referendum. In exchange for completing simple tasks—such as posting on Facebook, recruiting others, and convincing voters to vote against EU integration—participants can earn up to $280, if the majority of people at their polling station vote against the EU referendum. Moldovan police revealed this month that payments for the anti-EU campaign, organized via Telegram, are illegally made through a sanctioned Russian bank, with funds from a Russian nongovernmental organization called “Evrazia” (Eurasia), ranging from fifty dollars per month for “supporters” to more than $2,500 for regional “leaders.” This method of recruiting and paying “ambassadors” has been used widely across Moldova, including in Gagauzia and Chișinău, with multiple similar chatbots reported.

The scale of disinformation being spread in the run-up to this election is unprecedented in Moldova. The Kremlin’s goal appears to be to overwhelm voters with so much misleading information that they are unable to discern truth from lies, and ultimately to erode confidence in Moldova’s democratic institutions.

Not-so-secret foreign meddling

What is particularly alarming is the direct involvement of the Russian Federation. Unlike previous elections in which Moscow’s influence was more subtle, this time, the Kremlin has made no effort to hide its role as the main financial backer of certain political campaigns. Russia’s overt involvement raises serious concerns about Moldova’s sovereignty and the fairness of its elections. The Kremlin is not just supporting pro-Russian factions; it is actively seeking to reshape Moldova’s political landscape to serve its own geopolitical interests.

The “Evrazia” nongovernmental organization, which is transparent about its role in channeling funds into Moldova, has direct ties to the Kremlin and is led by Alyona Arshinova, a legislator in the Russian Duma and vice president of the ruling United Russia party.

Moscow’s efforts to influence the presidential election and constitutional referendum are strategically aimed at delegitimizing this crucial democratic exercise and discrediting the very idea of European integration.

For years, Russia has viewed Moldova’s pivot to European integration as a threat to its regional influence. Now, it is pulling out all the stops to disrupt this process, using financial, political, and media tools to create divisions within Moldovan society. Russia’s goal is clear: to pull Moldova back into its sphere of influence by any means necessary.

Moldova’s democracy hangs in the balance. The integrity of its electoral system, its institutions’ sovereignty, and its citizens’ trust are all on the line.

Victoria Olari is a research associate for Moldova with the Atlantic Council’s Digital Forensic Research Lab.

The post What to know about Russian malign influence in Moldova’s upcoming election appeared first on Atlantic Council.

Working on a new transatlantic approach toward the Western Balkans

Maja Piscevic, Ilva Tare — Mon, 07 Oct 2024 15:00:00 +0000

This essay is part of the report “Transatlantic horizons: A collaborative US-EU policy agenda for 2025 and beyond,” which outlines an agenda for common action for the next US administration and European Commission.

all essays

The bottom line

The Western Balkans is a region neither the United States nor the European Union (EU) can afford to ignore or mishandle. Tensions are too high, and the geopolitical implications of misinformed and misaligned policy are costly. The United States and the EU must work together, and play to their own respective strengths, to prioritize democratic and economic growth and alignment with the West.

State of play

Visits to the Western Balkans elicit two contradictory feelings. On the one hand, the region is vibrant and brimming with potential. The World Bank projects the regional gross domestic product growth for the Western Balkans Six—Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro, and Serbia—to be 3.2 percent this year and 3.5 percent in 2025, noting some “cautious optimism.” On the other hand, too often the region is stuck in a disorganized and chaotic feedback loop, its violent histories seem inescapable, and its democratic culture remains lacking. Flashes of ethnic and political violence have risked upending the fragile peace between Serbia and Kosovo. Democracy ratings by international observers such as Freedom House are tracking democratic declines or stagnation in the region.

The United States and the EU have recognized the importance of the Western Balkans and have worked on engaging the region, to varying degrees of success. There has been modest progress on the region’s Euro-Atlantic integration, and there remains moderate to strong support inside the region for a European future. There has also been renewed momentum from the EU to make progress on enlargement to the region as Russia’s full-scale invasion of Ukraine has reinvigorated the bloc’s understanding of the geopolitics of enlargement.

Yet structural issues continue to frustrate the region’s Euro-Atlantic trajectory. The EU’s enlargement process, with single member state vetoes holding up progress, remains deeply flawed. At the same time, US policy toward the Western Balkans, particularly focusing on the normalization dialogue between Kosovo and Serbia, has not produced the desired results, as local politics and nationalisms have torpedoed the Association of Serb-Majority Municipalities. These opportunities and challenges together will require leadership from the United States and the EU to realize the region’s potential.

The strategic imperative

Geopolitics is the main driver of the external focus on the Western Balkans. The region for years has been Europe’s “soft underbelly,” where Russia holds significant influence as both an instigator and negotiator, especially in Serbia and Republika Srpska (the Serb-majority entity within Bosnia and Herzegovina) but also in North Macedonia, Montenegro, and Kosovo. Russia’s full-scale invasion of Ukraine has raised the stakes about Moscow’s willingness to inflame conflict in the region. Securing the region within the Euro-Atlantic framework will do much to stem Russia’s influence and diminish the chances of violence on the continent.

Another geopolitical driver is the role of China. Beijing has stepped up its involvement primarily through investments in major infrastructure projects and mines. The US House Foreign Affairs Committee estimates that China has invested around $1 billion in the region annually since 2011, and approximately $10.3 billion in Serbia alone from 2009–2021. Five of the Western Balkans Six are members of China’s Belt and Road Initiative, and Serbia’s security cooperation with Beijing has grown to encompass overseas “police stations,” surveillance and facial recognition camera installations, and joint military exercises.

There are positive motivators for transatlantic engagement, too. The region could be a success story for the West’s de-risking agenda. Lower labor costs and the region’s strategic geographic location and physical proximity offer a twofold opportunity to help realize Europe’s—and the United States’—efforts to reshore its supply chains and investments and diminish China’s own influence.

Both the United States and the EU need a clear vision for the region. With the right strategy, the region can overcome its challenges and emerge as a stable, prosperous, and democratic part of Europe. By prioritizing democratic values and good governance, economic revitalization, and strategic partnerships, the United States and the EU can significantly and positively impact the region’s trajectory. Ultimately, a successful transatlantic policy in the Western Balkans requires a long-term commitment, sustained engagement, and a clear vision for the region’s future.

Looking ahead

The Western Balkans will remain a focus on both sides of the Atlantic. Either a Democratic or Republican administration is expected to be more engaged once in office than during this past election year and will bring a focus on security issues, economic development, and regional integration, as well as on the rule of law, the fight against endemic corruption, and democracy. In Europe, too, the European Commission will focus on the region, including on enlargement, economic growth, and the rule of law.

Of crucial importance is how the new administrations will implement their policies in the region. Many of the key topics and priorities have already been identified. For example, Serbia will likely be the main focus of the next US administration due to its relatively large size, economic development, and the deteriorating state of its democracy, rule of law, and media freedom—not to mention its geopolitical role as a willing partner to both Moscow and Beijing. The European Commission’s Growth Plan for the Western Balkans will also continue to be a centerpiece of transatlantic priorities for the region.

The uncertainties are prioritization and calibration. How will policymakers prioritize the need to address economic or democratic reforms? Will the United States continue its practice of giving the lead to the EU, which all countries in the region at least nominally aspire to join?

The prioritization of democratic values will be the key to engaging the region successfully in the future. A more decisive and uncompromising insistence on the development of democratic institutions and values—such as free and fair elections, the rule of law, and the fight against corruption and organized crime—must be a priority. Reforms in these areas are prerequisites for any sustainable economic progress and investment, and stronger democratic consolidation will do far more to reduce the impact of malign influences from Russia and China that thrive precisely in the absence of these values. Failing to prioritize democracy in the region will risk cementing the petrifying status quo.

Whatever happens in November, a much stronger and more active US role in the Western Balkans will be required. Previously, the United States has given primacy to the EU, but that strategy has not yielded convincing and sustainable results on key issues like the struggles of the Belgrade-Pristina dialogue (and the lack of implementation of the Brussels and Ohrid agreements that underpin it), and the festering ethnic tensions in Bosnia and Herzegovina. This is a consequential demonstration of the EU’s inability to take a leading role and bring key players to the table with the determination to reach an agreement. As a result, the process of normalization between Kosovo and Serbia has stalled—or worse, deteriorated.

The EU is an important and powerful bloc, but its institutional structure has limited its effectiveness. The bloc is a heterogeneous and loose union of twenty-seven members, many with vastly different priorities for the region. While still immensely influential, it is not decisive in some key policy areas, especially enlargement, where the current veto system has left the Western Balkans as a political punching bag for domestic politics among EU member states. A few such cases include Bulgaria and Greece blocking North Macedonia’s progress, Slovenia delaying Croatia’s 2013 accession over border disputes, and traditional enlargement skepticism in France and the Netherlands stemming from, among other considerations, domestic political concerns about, for example, immigration. Given that this decision-making framework is embedded in the highest legal act of the EU, it is not realistic to expect any change in the foreseeable future—even though change is much needed.

The United States is not as constrained in implementing its policy toward the Western Balkans. Provided the next administration does not change its priorities for the Western Balkans, it would be of crucial importance to take a more decisive stance in pursuing its interests, especially when it comes to security, the fight against corruption, the rule of law, media freedom, and the reduction of Russian and Chinese influence. All of these goals are achievable, but only if the next administration acts energetically and resolutely in their implementation.

Policy recommendations

There is much that the United States and the EU can do—together and separately—to enact positive change in the Western Balkans. Recommendations include:

Insist on the primacy of democracy and the rule of law. The underpinning of democracy should be a prerequisite of any approach to the region. The United States and the EU, therefore, must prioritize support for democratic reforms, anti-corruption efforts, and the rule of law in the Western Balkans, specifically through:

Anti-corruption measures: Corruption is a pervasive problem in the region. US and EU policymakers should provide technical assistance to develop and implement effective anti-corruption strategies, including strengthening law enforcement, improving transparency, and protecting whistleblowers.
Judicial reform: Independent and impartial judiciaries are crucial for upholding the rule of law. Plans for the region should include the provision of training for judges and prosecutors and promoting the independence of the judiciary.
The empowerment of civil society: An independent and vocal civil society is essential for holding governments to account. The United States and the EU should support civil society organizations, particularly those working on good governance, human rights, and anti-corruption initiatives.

Scale up economic engagement. The Western Balkans region possesses untapped economic potential. The United States and the EU must significantly expand and see through economic engagement in the region. Building on the foundation set by the Western Balkans Democracy and Prosperity Act, a bill introduced by US Sens. Jeanne Shaheen (D-NH) and Roger Wicker (R-MS), policymakers should aggressively pursue a strategy of investment, trade facilitation, and infrastructure development in the region by:

Doubling down on investment: Policymakers should double down on investments in the region, focusing on sectors with high growth potential, such as renewable energy, technology, and agriculture. Leveraging public-private partnerships will be key to attracting private capital and creating jobs. Investments should be coordinated or at least deconflicted between Washington and Brussels.
Streamlining trade: Facilitating trade, particularly between the United States and the Western Balkans, is an important signal of the West’s involvement in the region. Reducing trade barriers, simplifying customs procedures, and providing technical assistance on EU standards alignment will help boost exports and attract foreign investment.
Driving infrastructure development: Investing in infrastructure such as transportation, energy, and digital connectivity will help economic growth, regional integration, and the green transition. The United States can partner with the EU (and international financial institutions) to finance large-scale projects. This would be particularly welcome to counter Chinese infrastructure investments in the region.

Refocus on regional economic competitiveness. Increasing the Western Balkans’ competitiveness will make Europe more competitive. To accomplish this, a joint effort is needed to improve the business environment, foster innovation, and develop a skilled workforce, including by:

Improving the business climate: The United States and the EU should provide technical assistance to reform regulatory frameworks and improve governance with the goal of reducing bureaucratic hurdles, enforcing property rights, and combating corruption—all of which are essential for attracting foreign investment.
Fostering innovation: Supporting research and development, technology transfers, and entrepreneurship can help drive innovation and create new opportunities. Establishing innovation hubs and incubators can help nurture a culture of entrepreneurship.
Investing in human capital: A skilled workforce is essential for economic growth. The United States and the EU can support education and vocational training programs, particularly for young people. Instead of looking to emigrate elsewhere, the region’s youth can find incentives to stay.

Develop a new approach to the Serbia-Kosovo dialogue. The Serbia-Kosovo dialogue has been a longstanding and complex issue. It needs new life with incoming US and EU administrations. The United States, specifically, should play a more active role in facilitating a comprehensive and final normalization agreement. Recommendations include:

Introduce joint US-EU leadership: The United States and the EU should jointly lead the dialogue, leveraging their combined diplomatic weight and expertise.
Focus on normalization: The dialogue should prioritize practical steps toward normalization of relations, including economic cooperation, freedom of movement, and mutual recognition.
Develop conditional incentives: Economic incentives can be used to encourage progress in the dialogue, but they should be conditioned on concrete achievements. The EU’s Growth Plan can be a crucial mechanism to promote progress and discourage stagnation, or worse—cooperation with malign actors.
Addressing the root causes: The underlying issues of the conflict, such as minority rights and safeguarding territorial integrity, must be addressed to achieve a lasting peace.

Develop policy for cybersecurity and infrastructure protection. The Western Balkans is increasingly vulnerable to cyber threats, as have been documented recently in Albania, Montenegro, and North Macedonia. Protecting critical infrastructure and building cybersecurity capacity are essential for economic growth and regional stability.

Cybersecurity capacity building: The United States and the EU should support the development of cybersecurity capabilities in the region through training, capacity building, and technology transfers.
Critical infrastructure protection: Partnering with the private sector, the United States and the EU can help protect critical infrastructure, such as energy, transportation, and telecommunications, from cyberattacks.
Countering disinformation: The spread of disinformation and foreign interference is a growing challenge. The United States and the EU have successfully supported media literacy programs and fact-checking to counter these threats, but more can be done at the local level in cities outside the capitals.

Refocus on countering malign influence. The Western Balkans remains a geopolitical battleground, with Russia and China seeking to increase their influence in the region. The United States and the EU should develop strategies to counter these efforts. Such a strategy should include:

Strategic competition: The United States should adopt a competitive approach to Russia and China, offering alternative partnerships, investments, and security cooperation.
Energy security: Reducing the region’s dependence on Russian energy is crucial. The United States can support diversification of energy sources and infrastructure development.
Information warfare: Countering disinformation campaigns and strengthening media literacy are essential to protect the region from foreign manipulation.
Strengthening NATO: Reinforcing NATO’s presence in the region is crucial to deter aggression and reassure allies. Eventually, moving Kosovo closer to NATO membership will be an important step toward regional stability.

Maja Piscevic is a nonresident senior fellow with the Atlantic Council’s Europe Center and representative of the center in the Western Balkans.

Ilva Tare is a resident senior fellow at the Atlantic Council’s Europe Center and host of the #BalkansDebrief podcast.

#AtlanticDebrief – What is a new vision for a transatlantic approach to the Western Balkans? | A debrief from Ilva Tare and Maja Piscevic

nlawler — Mon, 07 Oct 2024 15:00:00 +0000

IN THIS EPISODE

As Europe and the United States navigate leadership change and turnover on both sides of the Atlantic, the Europe Center’s new report Transatlantic horizons: A collaborative US-EU policy agenda for 2025 and beyond offers a productive vision for transatlantic relations with forward-looking policy recommendations for the next US administration and European Commission.

On this special edition of the #AtlanticDebrief, Europe Center Resident Senior Fellow Ilva Tare and Europe Center Nonresident Senior Fellow Maja Piscevic unpack their section of the report “Working on a new transatlantic approach toward the Western Balkans” and recommendations for policymakers on both sides of the Atlantic.

READ THE FULL REPORT

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Accelerating business confidence in northern Central America: A roadmap for Honduras

Mon, 30 Sep 2024 14:00:00 +0000

Introduction
Honduras’s business climate in context
A roadmap to improving the business climate in Honduras
Conclusion
Acknowledgements
About the authors
Central America Task Force members

Introduction

Honduras, situated in the heart of Central America, stands at a pivotal juncture in its political, economic, and social development. The country has faced numerous challenges over the past decades, from political instability and economic volatility to social unrest and pervasive corruption. However, the political shift marked by the election of Xiomara Castro, the first female president of Honduras, raised expectations for long-awaited reforms.

Castro’s administration began with a focus to tackle corruption, improve governance and the investment climate, and address inequalities. Despite these initiatives, her reforms have faced various levels of success and resistance, with her pledge to establish the International Commission against Corruption and Impunity in Honduras (CICIH) still unfulfilled.¹ Recent events have emphasized the urgency for President Castro to act against corruption. Her controversial decision to end the long-standing extradition treaty between Honduras and the US has sparked widespread debate within the country and internationally, weakening the fight against organized crime.² Castro’s stance has been further shaken by the release of a video that led to the resignation of her brother-in-law, who served as the Secretary of the National Congress, and her nephew, who held the position of Minister of Defense.³ As of early September, Castro is under pressure to resign amidst public demonstrations.⁴ This scandal has raised serious concerns both at home and abroad regarding the extent of corruption and the pervasive influence of drug networks in Honduras’s political sphere. These events highlight the necessity for effective measures to combat drug trafficking and regulate electoral campaign financing.

From a broader macroeconomic perspective, Honduras is intricately linked to the wider regional dynamics of Central America. As part of Northern Central America, alongside Guatemala and El Salvador, Central America’s second largest country also grapples with the intertwined issues of unemployment, poverty, violence, and migration. The sub-region faces common struggles against organized crime and corruption, which significantly impacts the economic and social fabric of each nation. Additionally, the Honduran economy’s heavy reliance on remittances —over a quarter of the gross domestic product⁵—primarily from the United States, introduces vulnerability to changes in domestic US policy and economic fluctuations. Compounding these challenges, climate change exacerbates natural disasters like hurricanes and droughts, further straining Honduras’ social conditions, economic resources, and infrastructure.

One of the most significant geopolitical shifts under Castro’s administration was the decision to switch diplomatic recognition from Taiwan to China. This move—not totally unexpected from Castro’s campaign⁶—was seen as a way to explore new opportunities for foreign investment, trade, and infrastructure development, potentially impacting Honduras’s economic landscape. However, it has also brought challenges, including putting at stake Honduras’s long-standing relationships with allies and partners in the Western Hemisphere, and ensuring that any new partnerships translate into tangible benefits for the Honduran population.

President Xiomara Castro meets Premier Li Qiang in Beijing on June 13, 2023, after Honduras broke ties with Taiwan and joined China’s Belt and Road Initiative. REUTERS/Jade Gao

Additionally, Honduras continues to face severe energy challenges that impede economic growth and development. Frequent power rationing, driven by inadequate investment in transmission and distribution systems, coupled with the failure to increase grid capacity, highlights the urgent need for competitive tenders and investment in firm power generation. This investment is crucial not only for addressing current energy deficits, but also for unlocking the country’s future energy potential. Furthermore, significant fiscal challenges exacerbate the problem. The state-owned energy company, ENEE, accumulated a staggering overall debt of approximately $4.29 billion by May 2024,⁷with an estimated $75 million owed to the private sector.⁸ These financial issues are an additional strain to Honduras’s energy infrastructure and underscore the need for comprehensive reforms to stabilize the energy sector and the broader economy. Addressing these energy challenges is critical not only for promoting economic and fiscal stability but also for improving the overall quality of life for Hondurans.

While overcoming these domestic challenges remains crucial, Honduras is at a critical moment where global economic trends, such as nearshoring, offer promising opportunities for growth. As companies seek to relocate their manufacturing and services closer to North American markets, Honduras could potentially become a key player in regional supply chains. By leveraging its strategic location, improving infrastructure, enhancing workforce skills through education and vocational training, and providing legal certainty in-country, Honduras could be an attractive destination for nearshoring and foreign investments. Próspera has been held up as an example of this potential.A private city and special economic zone on Honduras’s Roatan Island, it was designed to operate under its own fiscal, regulatory, and legal framework. Próspera aimed to attract foreign direct investment and drive economic development,⁹though the future of Próspera and Próspera-like enterprises remains in “limbo” after Castro repealed, in her first days in office, the Special Economic Zone law.¹⁰ This move has raised concerns among international investors and US lawmakers, including Senators Cardin and Hagerty, who have emphasized the importance of respecting existing investments and maintaining a stable and predictable business environment in Honduras.¹¹

In this context, for over a year, members of the Atlantic Council’s Central America Task Force (CATF)—a nonpartisan, high-level group of leaders from government, business, and civil society mostly from El Salvador, Guatemala, and Honduras—set out to provide independent analysis and recommendations on how to accelerate business confidence in Honduras. This roadmap—the first of a two-part series by the Atlantic Council’s Adrienne Arsht Latin America Center and DT Institute—focuses on pragmatic recommendations specifically tailored to Honduras, to assist in tackling corruption and strengthening business confidence. In close collaboration and through repeated consultations with the CATF, this brief explores core issues facing Honduras and outlines actionable recommendations for the public and private sectors to undertake to improve the country’s business climate.

Honduras’s business climate in context

Honduras possesses numerous attributes that appeal to both local and global investors, including its strategic proximity to US markets, favorable legal protections, and low tariffs facilitated by the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR), abundant natural resources, and productive agricultural sectors. However, the investment landscape is marred by persistent uncertainties stemming from corruption, legal domestic and international inconsistencies, costly and unreliable energy supply, bureaucratic hurdles in licensing and permitting, and deteriorating infrastructure, all of which pose significant obstacles to enterprises across the spectrum. According to the International Monetary Fund (IMF), Honduran real gross domestic product (GDP) grew by 4 percent in 2022—nearly identical to Guatemala’s 4.1 percent growth and 1.2 percentage points above neighboring El Salvador’s—and is estimated to grow by 3.6 percent by the end of 2024, marginally outperforming Guatemala, and El Salvador by 0.1 and 0.6 percent, respectively.¹²

President Castro’s administration has proposed an ambitious agenda for the “refoundation” of the country,¹³ purportedly targeting systemic corruption and advocating for the introduction of an inclusive economic framework. However, little progress or change has happened, mostly due to institutional uncertainties in the Legislative Branch, the rapid pace of legislative and regulatory changes, coupled with a narrative that often blames the private sector for societal woes¹⁴have fostered an atmosphere of unpredictability, resulting in diminished private investment and job opportunities.¹⁵

Lack of public-and private-sector coordination

While the Castro administration has publicly acknowledged the importance of foreign direct investment for generating opportunities, job creation, and economic expansion,¹⁶conflicting views within the government about the private sector’s contribution to national welfare have created uncertainty. This inconsistency has raised concerns among Honduran businesses regarding the administration’s commitment to fostering a stable and conducive investment environment. One example was the introduction of the Tax Justice Law bill, which was presented to Congress without consultation with the private sector. Introduced in April 2023, the reform bill sought to overhaul the tax system by introducing progressive tax principles, transitioning from territorial to worldwide income taxation, and eliminating the possibility of forgiving tax debts, among other reforms.¹⁷ The lack of dialogue with the business community for this proposal was seen as detrimental because it undermined the private sector’s confidence in the government’s willingness to collaborate on policies that directly affect their operations.
Additionally, the international investment community has echoed such uncertainty. The US State Department’s 2023 Investment Climate Statements on Honduras highlight that US businesses believe the administration’s policies have weakened Honduras’s appeal as an investment destination relative to its Central American neighbors.¹⁸ For instance, the repeal of the hourly employment law in April 2022, which eliminated flexible hiring practices essential for seasonal and part-time workers,¹⁹is one policy decision that raised concerns about the country’s attractiveness for investment. which raised concerns about potential expropriation risks if power-purchasing agreements could not be renegotiated, further damaged investor confidence. Although the government has renegotiated eighteen contracts,²⁰these are still “stuck” and pending approval from the National Congress. This reform has not only discouraged private investment but also limited the commercial sector’s ability to privately contract energy, leaving economic growth dependent on the pace and capacity of ENEE.

To address these issues, fostering a consistent and robust dialogue between the public and private sectors is essential. Such engagement would help harmonize policies, build mutual trust, and create a more stable and attractive investment environment in Honduras.

Cumbersome and costly regulatory environment

Honduras’s regulatory environment is characterized by complexity and inefficiency, creating challenges for businesses, and hindering economic growth. The country’s regulatory framework is often burdensome, with numerous bureaucratic procedures and regulations that businesses must navigate to operate legally. Starting a business in Honduras involves multiple steps, taking an average of forty-two days to complete, and incurs high costs equivalent to 28.1 percent of per capita GDP.²¹Additionally, obtaining business licenses and permits can be time-consuming and costly due to excessive red tape and administrative hurdles. Cumbersome customs procedures and trade regulations further exacerbate the challenges, impeding the smooth flow of goods and increasing business transaction costs.

These regulatory barriers contribute to a lack of competitiveness, stifling innovation and entrepreneurship while deterring foreign investment. Simplifying regulations, streamlining administrative processes, and enhancing transparency and accountability in regulatory enforcement are essential steps to alleviate the burden of the regulatory environment and foster a more conducive business climate in Honduras.

Issues with the rule of law

Honduras’s rule of law faces significant challenges marked by weak governance, widespread corruption, and limited access to justice. The country struggles with institutional fragility, where political interference often undermines the independence of the judiciary and law enforcement agencies. Corruption is pervasive across various sectors, hindering accountability and eroding public trust in government institutions. Furthermore, the recent denunciation of the extradition agreement between the US and Honduras is a major setback in the fight against drug trafficking.²²It undermines previous efforts to decrease high levels of violence, organized crime, and gang violence. It also poses significant threats to citizen security and the rule of law.

As mentioned in a previous Atlantic Council report, civil service reform and “debloating” the government payroll is essential to combat corruption.²³ Such reforms can help professionalize the public sector and create a merit-based system that rewards competence and performance. Reforms in civil service can attract top talent and establish a permanent core bureaucracy to ensure long-term continuity for institutional and economic policy, as well as insulate key government functions from undue political influence.

Despite facing challenges, ongoing efforts persist in addressing the fragility of the rule of law in Honduras. One notable initiative is the Justice, Human Rights, and Security Strengthening Activity (Unidos por la Justicia), launched by the US Agency for International Development (USAID) in 2016.²⁴ This project aims to enact institutional reforms, enhance access to justice and civil society, bolster law enforcement, and empower women to combat gender-based violence. Furthermore, the Biden administration committed US$4 billion²⁵over four years to combat crime, poverty, and corruption in Honduras, as well as in neighboring countries El Salvador and Guatemala, under a plan titled US Strategy for Addressing the Root Causes of Migration in Central America.²⁶ Since 2021, the root causes strategy has attempted to address the underlying drivers of irregular migration from Central America. The United States government assistance has been directed toward generating over 90,000 jobs and providing $179 million in financing for micro and small businesses. Additionally, investments totaling over $4 billion have been committed to strengthen economic security, enhance food security for over 275,000 individuals, and provide education and vocational training for thousands of youths,²⁷though it is important to note that many of these initiatives were already underway prior to the strategy’s launch. While this initiative has aimed to mitigate migration pressures, it has been criticized for its approach. A year after the strategy was launched, Marisa Limón Garza, deputy director at the Hope Border Institute, pointed out that while the administration has taken positive steps, outdated deterrence tactics and the lack of humanitarian approaches toward rising migration hinder broader reform efforts.²⁸ Furthermore, critics have expressed concerns that the strategy’s emphasis on financial aid lacks clear accountability mechanisms to address immigration pull factors directly, as well as measurable targets to ensure long-term results rather than mere temporary relief.²⁹

Infrastructure challenges

Honduras still lacks key elements of physical infrastructure to capitalize on opportunities for trade and investment. The country’s expensive and unreliable energy, inadequate public utilities, and e-government digital systems present some of the greatest obstacles to private-sector development and investment.

Frequent blackouts underscore Honduras’ urgent need for energy sector improvements to support reliable business operations and economic growth. REUTERS/Jorge Cabrera

Improving Honduras’s energy sector is crucial for reducing costs and enhancing reliability, which are vital for business operations. Chronic issues such as energy shortages and high costs persist, particularly in rural areas where electrification rates are lowest (more than one in four households lack access to electricity).³⁰ Daily blackouts are common; as of June 2023, the Honduran government started to implement scheduled blackouts to ration electricity throughout the country.³¹ In 2023, electricity losses were estimated to be as high as 37.7 percent of total production, increasing the National Electricity Company’s debt to approximately US$4.17 billion³² compared to US$3.4 billion in 2020.³³ Despite efforts to increase installed capacity and meet growing demand, transmission and distribution losses remain high due to theft and illegal connections. As a result of energy losses, many firms resort to owning generators to mitigate the effects of unreliable electricity supply. However, these generators contribute to operational costs and indicate shortcomings in the public utility’s service provision.

Furthermore, ENEE’s mounting debt to private generators has created significant challenges. The government’s failure to make payments has destabilized these companies financially, forcing them to seek additional financing to keep their operations running and continue supplying energy. Génesis Rodezno, Executive Director of the Honduran Association of Electric Power Producers (AHPEE), has highlighted that ENNE’s failure to pay on time increases the cost of credits provided by private banks, putting at risk the survival of these companies.³⁴ In turn, this financial instability threatens the country’s overall energy supply. Thus, addressing inefficiencies in the electricity sector is essential for promoting business growth and economic development in Honduras, requiring comprehensive reforms to enhance infrastructure, reduce losses, and improve service quality.

A lack of digital infrastructure has long impacted the country’s ability to partially or fully digitalize, leading to limited access to information and public services, particularly for people living in remote areas. According to the United Nations’ E-Government Development Index, Honduras ranks second to last in the Americas in terms of using information technologies to promote access and inclusion of its people.³⁵ These low levels of digitization result in a lack of transparency and accountability by impeding access to information, increasing the risk of errors, and limiting the ability to track government actions effectively, making it more difficult to detect and prevent corrupt practices. Importantly, a lack of digital infrastructure makes it more difficult for local and international businesses to access information, communicate with customers and suppliers, and conduct financial transactions. According to the UN Conference on Trade and Development’s B2C E-commerce Index, which measures an economy’s preparedness to support online shopping, Honduras ranks 98 out of 152 countries surveyed.³⁶

Human capital

Honduras faces significant challenges related to human capital, including limited access to quality education, skills gaps in the workforce, and elevated levels of informality. The country’s education system struggles with inadequate funding, infrastructure, and teacher training, resulting in low educational attainment levels and a lack of necessary skills in the workforce. This hinders productivity and innovation, limiting economic growth and development opportunities. Furthermore, a substantial portion of the workforce operates in the informal sector—which today accounts for a significant portion of the country’s economic activity, estimated at around 70 percent of total employment—lacking access to social protections and training opportunities, exacerbating inequalities, and perpetuating poverty. Additionally, brain drain remains a concern, with skilled workers often seeking opportunities abroad due to limited prospects and economic instability at home. Addressing these human capital challenges requires investment in education and vocational training programs, as well as policies to promote formal employment and create pathways for skills development and retention. By prioritizing human capital development, Honduras can unlock its potential for sustainable growth and prosperity.

Notwithstanding these five types of challenges, Honduras presents lucrative business prospects, attracting continued interest from multinational corporations.

International commission against corruption and impunity

Public corruption—the abuse of power by a government official for personal gain or other improper purposes, often involving bribery, embezzlement, or misuse of public funds or resources—and weak rule of law are long-standing challenges for strengthening democratic institutions and sustaining economic development in Honduras. According to the Honduran Social Forum on External Debt, corruption cost Honduras about $10.3 billion between 2014 and 2018, the equivalent of 10.0 to 12.5 percent of the country’s GDP.³⁷Combating corruption and impunity and reversing the effects of such losses are essential to ensure a productive, sustainable, and healthy socioeconomic and political climate. That is why it was welcome news on December 15, 2022, that the Honduran government signed a memorandum of understanding with the UN for the installation of an International Commission against Corruption and Impunity (CICIH by its abbreviation in Spanish). To date, details about its scope and duration have not been disclosed.³⁸ But the CATF believes that CICIH must, at a minimum, have the authority to conduct the following:

1. Independent operation operation with the full support of Honduran institutions;
2. Discretion to investigate corruption and prosecute crimes alongside the Public Prosecutor’s Office;
3. and Independent process to select its members.

Where does it stand? The UN proposed in 2022 that the mechanism have powers to “carry out investigations independently, as well as establish itself as a private prosecutor,” but the government, in its counterproposal, was clear that criminal accusations must always originate with the Public Ministry.³⁹

Public ministries and attorneys general play a pivotal role in the judicial systems of Central American countries. They are the primary institutions responsible for prosecuting crimes, including corruption. These entities are tasked with upholding the rule of law, ensuring justice is served, and maintaining public trust in the legal system. However, their effectiveness is often undermined by political interference, lack of resources, and endemic corruption within their own ranks.

A roadmap to improving the business climate in Honduras

The Central America Task Force set out to discuss and define how the United States can work with Honduras and other Northern Central American countries to accelerate business confidence and promote greater economic development and investments while best supporting Honduras in combating corruption and strengthening the rule of law. The Task Force’s recommendations pursue three broad objectives. First, they seek to improve public-private coordination to enhance investor confidence. Second, the recommendations identify areas where rule of law, judicial framework, and human capital can enhance Honduras’s business climate. Finally, the recommendations aim to position the United States to partner with an increasingly prosperous and capable Honduras to advance mutual economic and geopolitical interests.

Improving governance and the rule of law

Ensuring electoral integrity is an essential first step to strengthen political trust and ensure a level playing field for businesses. If former President Juan Orlando Hernandez’s trial taught Honduras anything, it was that the country needs to strengthen its laws around electoral procedures: US prosecutors allege that Hernandez took approximately US$1 million in bribes to finance both his 2013 and 2017 presidential campaigns.⁴⁰ In 2025, Honduras will hold general elections, underscoring the urgency of introducing regulations on party finances and new laws that would allow for cooperation agreements with individuals under criminal investigation. This practice to confront illicit campaign financing, which is commonly used in the United States, was a key factor in the successful prosecution of major corruption cases by the now-defunct International Commission against Impunity in Guatemala (CICIG).⁴¹ By leveraging testimony from lower-level participants, CICIG was able to go after high-level corrupt individuals such as politicians, former military officials, and businesspeople, although there is controversy around the reach of the CICIG. Nevertheless, while CICIG was able to expose several criminal networks, its relative success was mixed as it often faced criticism for excessive zeal in criticizing judges and uneven management of its cases. While not a perfect instrument, CICIG stands as a potential model for countries struggling with entrenched corruption, and many lessons could be learned from its existence.

Strengthening electoral laws is crucial for ensuring transparency and integrity in the upcoming 2025 election. The formal start of the electoral process was marked by the recent call for primary elections, which will take place six months from now. REUTERS/Fredy Rodriguez

To solidify short-term wins into long-term gains in strengthening the rule of law, the Honduran government should continue to enact civil service reforms that promote transparency, accountability, and merit-based hiring practices. This could include the establishment of an independent civil service commission that oversees hiring, promotions, and dismissals. For example, the Special Law on the Organization and Functioning of the Nominating Board for the Proposal of Candidates for Magistrates of the Supreme Court of Justice, passed in July 2022, was a welcome reform that seeks to limit external interference in the selection of magistrates.⁴² The Honduran government should also invest in training and capacity building for civil servants with the help of USAID to ensure they have the skills and knowledge necessary to perform their duties effectively. Accumulating human capital and skills within the civil service is difficult, as only 20 percent of workers are part of career civil service while the remaining 80 percent are temporary contractors with high turnover rates.⁴³ Resuming the School of High Public Management project, created on 2018 by the Council of Ministers’ Decree PCM-19-2018, would be a positive step toward addressing this challenge. This initiative, which was supported by the Honduran government and the European Union, aimed to improve high-ranking public officials’ leadership skills, understanding of public administration and ability to optimize state resources.⁴⁴ By fostering a results-based management culture and promoting accountability, it could contribute to addressing the civil service’s existing challenges. Finally, the government should also provide incentives for civil servants to report corruption and protect whistleblowers from retaliation.

Finally, the growing awareness of responsible business conduct (RBC) in Honduras presents an opportunity to promote transparency and responsible practices within the private sector in the long term. Organizations like the Honduran Corporate Social Responsibility Foundation (FUNDAHRSE) are crucial in providing training and support to businesses, especially small and medium-sized enterprises (SMEs), to engage in responsible practices. FUNDAHRSE’s initiative, offering the “Corporate Social Responsibility Enterprise” seal, incentivizes exemplary conduct in areas such as health, education, environment, ethics, employment, and marketing. To further encourage RBC adoption, policymakers can collaborate with FUNDAHRSE to expand its reach and support programs that promote responsible business practices across all sectors. This partnership can enhance Honduras’s business climate, fostering trust and sustainability in the long term.

Improving public-and private-sector engagement, coordination, and policy development

Promoting consensus and coordination between the government, private sector, and civil society is essential for creating a stable and predictable investment climate in Honduras. Collaboration among stakeholders can help identify common goals, address concerns, and develop effective policies and strategies to promote economic growth and development.

The first step to achieving greater public- and private- sector engagement is to establish a public-private dialogue platform. This structured platform would promote periodic dialogue between public- and private-sector representatives and should be facilitated by the government in collaboration with business associations like the Consejo Hondureno de la Empresa Privada (COHEP), local commerce and industry chambers, and civil society organizations. The United States, through several agencies and the American Chambers of Commerce, should also participate as a representative of US businesses operating in Honduras.

The implementation of such a platform has been hindered by historical mistrust, bureaucratic inertia, and competing interests. Such dialogues have occurred in the past, oftentimes on an ad hoc basis, with the last one having occurred in early 2024 after demands from the country’s private sector.⁴⁵ To overcome these barriers and fragmented efforts to convene such dialogues, an institutionalized platform would provide a formal avenue for stakeholders to discuss key economic issues, exchange information, and address concerns openly and constructively. Importantly, this dialogue would serve as a forum for enhancing transparency and inclusivity in the policymaking process. For example, the Tax Justice bill in Honduras, first presented to Congress by President Castro’s administration, sounded the alarm among business leaders, who feared that it could discourage foreign investment.⁴⁶ Adding to the obstacles posed by the controversial legislation is Honduras’s withdrawal from the International Center for Settlement of Investment Disputes (ICSID), which also threatens foreign investment.⁴⁷ A public-private dialogue would allow private-sector stakeholders to voice these concerns and find pathways to inform policies that would encourage rather than discourage domestic and foreign investors. By involving stakeholders in the decision-making process, the government can gain valuable insights, build support for reforms, and foster a sense of ownership over policy outcomes.

Through this dialogue, Honduran policymakers and private-sector leaders can establish a minimum common agenda aimed at accelerating the country’s economic development. Here, Honduras can replicate Guatemala’s “Guatemala Moving Forward” plan—an interagency and multisectoral cooperation agreement that establishes a roadmap to attract more foreign investment and improve conditions for the Guatemalan economy. Important to its success was political will across administrations (the plan was introduced under former President Alejandro Giammattei’s administration and later adopted by President Bernardo Arevalo). Here, the US government, through its Central America Forward initiative, has already introduced a Business-Enabling Action Plan as part of its lines of effort, which could narrow down some of the focus areas for the minimum common agenda to build from.

As part of the public-private dialogue’s mandate, the Honduran government, in collaboration with private-sector stakeholders, should establish a dedicated fund for financing development-project feasibility studies and economic landscape-mapping exercises. The fund should be governed by a board of directors comprising representatives across the government, private sector, and civil society, ensuring transparency and accountability in fund management. Feasibility studies and mapping exercises should be prioritized by their potential to drive economic growth, create jobs, and address key development challenges in Honduras. Here, international financial institutions and development banks can be crucial partners for raising capital and providing technical expertise. For example, the International Finance Corporation published in 2022 its Country Private Sector Diagnostic (CPSD) report for Honduras, which identified agribusiness, manufacturing, business process outsourcing (BPO), and digital financial services (DFS) for micro, small, and medium-sized enterprises (MSMEs) as sectors where the business community, through government support, can unlock greater investment potential.⁴⁸ Doubling down on these studies, the fund would finance additional economic landscape studies like this one to identify areas for business climate improvement and delineate implementation schemes.

Streamlining government processes

Honduras faces significant challenges in its business environment, characterized by complex regulatory processes, bureaucratic inefficiencies, issues with public procurement, and barriers to entry for entrepreneurs. To foster economic growth and attract investment, Honduras must streamline government processes and enhance its regulatory environment.

First, the government, alongside business councils, should undertake a comprehensive review of the Honduran regulatory framework to identify redundant, outdated, or overly burdensome regulations that impede business operations. Honduras should, therefore, enhance transparency in government procedures and transactions. It should do so by widely implementing anonymous reporting channels, which have the potential to enhance the delivery of public services and increase responsiveness to citizen needs. This is especially crucial within the judicial system, where improving transparency can play a pivotal role in reducing impunity and enhancing overall judicial outcomes.

Additionally, the government should prioritize the modernization of regulatory processes through the adoption of digital technologies, automation, and online platforms to streamline administrative procedures and reduce bureaucratic red tape. Here, USAID can encourage the development of strategic blueprints for digital governance, electronic services, and cybersecurity, specifically. With the help of other development agencies, USAID can assist in policy formulation and enhancing institutional capabilities, including collaborating with donors like the Inter-American Development Bank (IDB) and the Government of South Korea on digital transformation initiatives to advance transparency and interoperability among government bodies; and facilitating knowledge sharing and the dissemination of successful practices with governments that have effectively implemented comprehensive digital transformation strategies, like Brazil.

Honduras must also strengthen its institutional capacity for public procurement. Such capacities must include the development of specialized procurement units in government agencies, the establishment of procurement training programs for procurement officials, and the recruitment and retention of qualified procurement staff, the government, and civil society. Additionally, the use of electronic procurement systems, online bidding, and e-procurement portals would help to streamline the procurement process, reduce the risk of fraud and corruption, and increase competition among suppliers. Lastly, an independent procurement oversight body that contemplates the development of a complaints and appeals mechanism and the implementation of anti-corruption measures in line with the broader anti-corruption agenda could help improve the perception of doing business in Honduras.

Addressing infrastructure challenges: energy, transport, and logistics

Infrastructure development is critical for supporting economic growth and attracting investment in Honduras. However, the country faces significant challenges, including inadequate transportation networks, unreliable energy supply, and lackluster digital infrastructure. Addressing these infrastructure deficits requires concerted efforts to invest in upgrading existing infrastructure and developing new projects to meet the needs of businesses and communities.

One area ripe for infrastructure investment is transportation networks, including roads, ports, and airports. Improving road connectivity within Honduras and its neighboring countries can reduce transportation costs, facilitate trade, and stimulate economic activity. For example, Honduran policymakers could prioritize investments in key transportation corridors such as the central, south, and west corridors which connect major urban centers and industrial zones. Additionally, upgrading ports and airports to handle increased trade volumes would complement these efforts by enhancing intraregional connectivity and supporting overall economic growth. Drawing inspiration from Colombia’s example, the 4G Road Infrastructure Program, which has been credited with boosting trade and reducing transportation costs, Honduras could adopt a similar model by engaging in public-private partnerships (PPPs) to finance and manage large-scale projects. Furthermore, upgrading critical infrastructure such as the Port of Cortés and the Ramón Villeda Morales International Airport would improve logistics initiatives and support Honduras’s growing trade needs.

Another critical infrastructure challenge is unreliable energy supply, which poses significant barriers to business operations and investment. Honduras has struggled with high electricity costs and frequent power outages, which negatively impact productivity and competitiveness. To address this issue, the government should implement comprehensive reforms in the energy sector, including promoting private-sector participation, diversifying energy sources, and enhancing grid reliability. On this last point, Honduras should invest in modernizing the electrical grid and its national energy company, ENEE, to improve reliability and reduce outages. This involves upgrading transmission and distribution infrastructure and integrating smart grid technologies. Notably, this has been a focus of the current government, which has allocated 16 percent of public investment- amounting to $232 million- towards these efforts.

In today’s digital age, robust digital infrastructure is crucial for economic development. Honduras lags in digital connectivity, which hampers business efficiency and access to global markets. Investing in digital infrastructure, including expanding broadband access, and enhancing mobile network coverage, is imperative. South Korea’s transformation into a global technology leader was driven by substantial investments in digital infrastructure and education. The country prioritized widespread high-speed internet access and fostered a culture of innovation. Honduras can take similar steps by collaborating with private telecom companies to expand broadband access, particularly in rural areas, and by promoting digital literacy programs to ensure the workforce can effectively utilize digital tools.

By prioritizing investments in transportation, energy, and digital infrastructure, Honduras can create a more conducive environment for business and attract greater investment. These infrastructure improvements are not just about physical assets; they lay the groundwork for enhancing human capital. With better connectivity, reliable energy, and access to digital resources, the Honduran workforce can gain the skills and knowledge necessary to thrive in a competitive global market.

Human capital development

Investing in human capital development is crucial for building a skilled workforce capable of driving economic growth and innovation. The future of Honduran business competitiveness is directly tied to the quality and skills of the current and incoming workforce. However, many entry-level employees lack essential skills for workplace success. The gap between private-sector demands and educational offerings has resulted in systems ill-prepared to meet evolving needs.

Solving this issue involves investing in education and vocational training programs to equip workers with the skills and knowledge needed to succeed in a rapidly evolving economy. This can be managed with a two-pronged approach. On the public-sector side, Honduras should better use the resources allocated toward its education⁴⁹sector to modernize school infrastructure, improve instructor quality and pay, and prepare students for their future endeavors. On the other hand, private-sector organizations, both domestic and foreign, should institutionalize partnerships with vocational training programs to outline the exact skills they are looking for in potential employees, so that training centers can better prepare their students. By prioritizing investments in education, capacity building, and digital-skills development, Honduras can lay the foundation for sustainable development and attract greater investment in key sectors, such as technology, agriculture, and renewable energy.

COVID-19 spurred a digital learning surge, yet national primary and secondary curricula lack digital literacy, a crucial skill for navigating online platforms safely and effectively. The Ministry of Education initiated the National Digital Education Transformation Program (PNTED) in 2020 to bridge the digital gap.⁵⁰ However, PNTED does not include strategies for digital literacy implementation in primary and secondary education. Here, the Ministry of Education should spearhead a campaign to embed digital literacy into the national curriculum. This inclusion can mitigate online risks, enhance economic prospects, and align with the PNTED goals. USAID and partners can aid the Ministry of Education by offering technical support, such as aligning digital literacy standards across education levels, enhancing monitoring capabilities for digital platforms, and integrating cybersafety training into the education curriculum. This concerted effort would ensure that students and educators are equipped with essential skills for the digital age.

Conclusion

While Honduras boasts attractive attributes for investors, such as proximity to US markets, persistent challenges hinder its business climate. Corruption, legal inconsistencies, energy supply issues, bureaucratic hurdles, and infrastructure deficiencies deter potential investments. Under President Xiomara Castro’s administration, recent decisions- such as ending the extradition treaty with the United States- have sparked debate about the country’s approach to tacking corruption and strengthening governance, which are key for fostering a more favorable business environment. This situation highlights the need for concrete action to restore confidence in the government’s commitment to reform.

To prevent further deterring investment, enhancing coordination between the public and private sectors is essential. Strengthening governance, improving infrastructure, enhancing human capital, and combating corruption are crucial. Implementing a public-private dialogue platform, streamlining regulations, and investing in education and vocational training can foster economic growth.

Additionally, addressing infrastructure deficits, promoting electoral integrity, and embracing responsible business conduct are essential steps. Collaboration with international partners, like the United States, can provide support and expertise in these endeavors. By addressing these challenges and implementing strategic reforms, Honduras can unlock its potential for sustainable growth and prosperity, attracting greater investment and fostering a conducive business environment.

While Honduras faces significant challenges, there are also immense opportunities for growth and development. By implementing the recommendations outlined in this brief, Honduras can enhance its business climate, attract greater investment, and pave the way for a prosperous future.

Acknowledgements

This roadmap is the first of two as part of the work of the Adrienne Arsht Latin America Center’s Central America Task Force (members listed below), a high-level group of policymakers, business leaders, and civil society from northern Central America that seeks to create a basis for consensus and galvanize support for strengthening the rule of law and mitigating corruption, increasing productivity and enabling sustainable economic development, and reducing conflict in Guatemala, Honduras, and El Salvador. Thank you to Jason Marczak, vice president and senior director for the Adrienne Arsht Latin America Center, for his guidance on this publication, as well as the Atlantic Council’s editorial team. A special mention to Kelsey Page, associate director, communications and editorial at AALAC, and AALAC’s young global professional, Isabella Palacios, for helping bring this publication to the finish line. This publication was produced with the generous financial support of DT Institute. Thank you to DT Institute for their insights and collaboration.

About the authors

Staff

María Fernanda Bozmoski

Director, Impact and Operations and Lead for Central America

Adrienne Arsht Latin America Center

Northern Triangle

Former staff

Eva Lardizábal

Former Assistant Director

Adrienne Arsht Latin America Center

Coronavirus Inclusive Growth

María Fernanda Bozmoski is deputy director at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the Center’s work on Mexico, USMCA, and Central America. Bozmoski has co-led the Center’s Central America Task Force, managed the Center’s trade portfolio, and programmed events in Asia for US policymakers. Before joining the Atlantic Council, Bozmoski worked at the Cato Institute, the Council of the Americas, and completed an externship at the Inter-American Dialogue. She speaks native Spanish, English, and French, fluent Italian, and near fluent Portuguese.

Eva Lardizábal was an assistant director at the Atlantic Council’s Adrienne Arsht Latin America Center, where she focused on regional economic development and prosperity, Central America, and the rule of law. Lardizábal authored the center’s biweekly Aviso LatAm newsletter and frequently organized policy dialogues with high-level government officials, business leaders, and civil-society members across the United States and Latin America. Prior to joining the Atlantic Council, she worked at the Think Tanks and Civil Societies Program and the Organization of American States. Originally from Honduras, Lardizábal holds a bachelor’s degree in political science and Latin American studies from the University of Pennsylvania.

Central America Task Force Members 2022-2024

El Salvador
Co-chair: Johanna Hill* (Co-chair for El Salvador until her appointment to the WTO)
Maria Eugenia Brizuela de Avila, former minister of foreign affairs (1999–2004); nonresident senior fellow, Adrienne Arsht Latin America Center, Atlantic Council
Ricardo Castaneda Ancheta, senior economist and country coordinator for El Salvador and Honduras, Instituto Centroamericano de Estudios Fiscales (ICEFI)
Juan José Daboub, former minister of finance and chief of staff to the President, Republic of El Salvador; president, HUGE Business and Investment Council
Leonor Selva, executive director, Asociación Nacional de la Empresa Privada (ANEP)
Claudia Umaña, former president, Fundación Salvadoreña para el Desarrollo Económico y Social (FUSADES)

Guatemala
Co-chair: Maria Antonieta del Cid, representative for Central America (1999–2000; 2017–2019), International Monetary Fund; former president of the Bank of Guatemala (2006-2010); former minister of finance (2004-2006), Republic of Guatemala
Roberto Gutierrez, president, Fundación para el Desarrollo Integral de Programas Socioeconómicos (FUNDAP); president, Red Nacional de Grupos Gestores
Guillermo Montano, founder, Transactel, Telus International, Dollar City, and Panamerican Food Company; president, Asociación Guatemalteca de Exportadores (Agexport)
Maria Pacheco, president and founder, WAKAMI
Leticia Teleguario, former minister of Labor and Social Welfare (2016-2018), Republic of Guatemala; Special Advisor on Corporate and Inter-Agency Relationships, UN Women Guatemala
Juan Carlos Zapata, executive director, Fundación para el Desarrollo de Guatemala (FUNDESA)

Honduras
Co-chair: Jorge Ramón Hernández, former judge, Inter-American Commission on Human Rights (IACHR); former ambassador of Honduras to the United States; Former Vice President of the Central Bank of Honduras, Republic of Honduras
Gabriela Castellanos, president, Consejo Nacional Anticorrupción (CNA)
Jaime Díaz Palacios, executive vice president, Central American Bank for Economic Integration (CABEI)
Eduardo Facussé, president, Cortes Chamber of Commerce and Industries (CCIC)
Jacqueline Foglia, executive director, Consejo Nacional de Inversiones (CNI)
Mey Hung, corporate affairs manager for Guatemala and Honduras, Walmart

United States and International Community
Co-chair: Anne W. Patterson, former Assistant Secretary of State for International Narcotics and Law Enforcement; former US ambassador to El Salvador, US Department of State
Abby Daniell, director, Latin America, Canada and Caribbean Public Sector, Amazon Web Services (AWS)
Karim Lesina, executive vice president; chief external affairs officer, Millicom
Jason Marczak, vice president and senior director, Adrienne Arsht Latin America Center, Atlantic Council
Maria Liliana Mor, director of strategic partnerships and development, ProMujer
Salvador Stadthagen, former ambassador of Nicaragua to the United States, Republic of Nicaragua

Accelerating business confidence in northern Central America: A roadmap for Guatemala

the Central America Task Force with task force lead María Fernanda Bozmoski — Mon, 30 Sep 2024 14:00:00 +0000

Introduction
Guatemala’s business climate in context
A roadmap to improving the business climate in Guatemala
Additional actionable recommendations for combating corruption in Guatemala
Conclusion
Acknowledgements
About the author
Central America Task Force members

Introduction

The still-young presidency of Bernardo Arévalo could be an inflection point in Guatemala’s efforts to combat corruption—a deeply entrenched issue that has long hindered progress in the nation and in Central America in general. With the largest population and economy in the Central American isthmus, Guatemala’s political and economic stability is vital not only for its citizens but also for the United States and the western hemisphere writ large. Arévalo’s administration, now past the six-month mark, represents a unique opportunity for the creation and implementation of significant reforms across government and institutions to dismantle the corruption that has stifled development and eroded public trust in democracy, as well as to move forward with other most needed structural reforms.

The administration’s efforts are critical for creating a more predictable and attractive investment environment, which is essential for promoting faster economic growth, increasing productivity, creating more formal jobs and enhancing people’s living conditions. With a long track record of macroeconomic stability, together with a significant flow of remittances and a diversified economy, the country is on the brink to achieving investment-grade status, according to major credit rating agencies.¹ However, Guatemala’s weak institutional capabilities, which cannot be fixed overnight, have fostered distrust toward political institutions and among certain businesses and unions. This distrust, coupled with increased polarization has undermined democratic norms and hindered economic growth. Highlighting the severity of these issues, the 2023 Corruption Perceptions Index of Transparency International placed Guatemala in the bottom fourteenth percent globally.²

Amid this challenging backdrop, the Arévalo administration has made efforts to address corruption. As an example of this, in his first weeks in office, the President appointed a new anti-corruption czar, Santiago Palomo, to lead the efforts of the National Commission against Corruption.³ However, this commission has limited political power and cannot investigate crimes, as criminal investigation is an exclusive function of the Attorney General’s Office. In July, Palomo stepped down from his position in the commission to become the administration’s chief spokesperson, and Julio Flores was appointed as his successor. The mandate and reach of the commission, as well as additional executive branch efforts that could strengthen the nation’s rule of law, are particularly crucial as Guatemala faces increasing pressures from external factors, ranging from transnational organized crime, climate change, and natural disasters, which further complicate the fight against corruption.⁴

The Atlantic Council’s Adrienne Arsht Latin America Center, in partnership with the DT Institute, has developed this roadmap for Guatemala. This publication, informed by over a year of consultations with the Central America Task Force, emphasizes the urgent need for robust anti-corruption measures to restore confidence among national and international investors, and calls for other relevant structural reforms crucial for improving the business climate. It provides pragmatic, multisectoral, and multistakeholder recommendations to drive impactful reforms that strengthen the rule of law.

By implementing comprehensive reforms, combating corrupt practices in public bids and tenders, accelerating the digitalization agenda, and seizing opportunities generated by nearshoring, Arévalo’s Guatemala could be on the cusp of transformative change. If successful, these efforts, supported by international cooperation, could significantly curb corruption, enhance institutional resilience, reduce migration, and foster economic prosperity in the region.

Citizens in Guatemala peacefully protest against corruption, emphasizing a critical issue undermining business confidence and economic stability. Tackling corruption is essential for creating a transparent business environment that attracts local and international investment. REUTERS/Josue Decavele

Guatemala’s business climate in context

When compared to the rest of the Central American countries, Guatemala stands out to investors for the size of its economy, population, and proximity to the United States, as well for its macroeconomic stability and credit rating. The country is an attractive destination for national and international investors, and, like its neighbors, benefits from its proximity to the North American market and favorable trade agreements such as the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR). Additionally, Guatemala’s growing tourism sector and the emerging tech scene in Guatemala City offer promising opportunities for economic diversification.

However, despite these advantages, significant challenges remain. While the country has experienced steady economic growth, as reported by the World Bank and the International Monetary Fund (IMF), this growth has not translated into meaningful reductions in poverty or decreased inequality. The World Bank notes that Guatemala’s gross domestic product (GDP) grew by 4.1 percent in 2022, with an expected growth rate of 3.5 percent by the end of 2024.⁵ Despite this growth, the country continues to grapple with high poverty rates, with over half of the population (55 percent) living below the poverty line as of 2023.⁶ The situation is further complicated by the prominence of the informal economy, which employs seven out of ten workers.⁷

These persistent issues are closely tied to Guatemala’s historically weak state capacity, which hampers progress in unlocking prosperity. Although the country’s tax revenue remains among the lowest in the region,⁸ the tax administration has significantly improved with technical assistance from the US government and multilateral organizations, resulting in increased tax collection and the identification of major tax fraud in recent years.⁹ However, important challenges remain with the prioritization and effectiveness of public spending.¹⁰ This inadequacy of public spending has severely impacted the government’s ability to provide essential services such as health and education and to invest in infrastructure. This deficiency contributes to high rates of child malnutrition and limited access to quality education, especially among indigenous and rural populations.

Additionally, another challenge for Guatemala is the inconsistent application of laws and regulations. The legal environment is often unpredictable, with uneven enforcement creating uncertainty for businesses. Furthermore, the slow judicial process, highlighted by the country’s difficulty in electing Supreme Court magistrates from 2014 to 2023¹¹ deters long-term investments and undermines the rule of law. However, in November 2023, Congress elected new magistrates to complete the 2019-2024 term, and now, new appointments for both the Supreme Court and the Court of Appeals are expected to take place in October, as that term ends. Despite these recent developments, establishing a stable and predictable legal framework remains crucial. The current administration must prioritize reforms that ensure consistent enforcement and strengthen the rule of law to build investor confidence and promote inclusive economic growth.

Another significant issue for businesses operating in the country, is Guatemala’s infrastructure deficit –particularly in transportation and energy. The country’s road network is underdeveloped, hampering logistics and trade efficiency. According to the World Bank, Guatemala ranks 134 of 141 in road connectivity.¹² Additionally, the energy sector faces rising demand, challenges in expanding new projects, and inadequate coverage in rural areas. For businesses and investors examining the Guatemalan landscape, while the business climate has become more favorable in recent years, several issues remain:

Regulatory and bureaucratic hurdles: The regulatory environment is characterized by complexity and inefficiency, creating substantial barriers for businesses. According to the Ibero-American Index of Bureaucracy 2023, opening a small business in Guatemala requires an average of 4,870 hours, equivalent to 203 days to complete the necessary procedures with different state agencies.¹³ In contrast, in El Salvador, the other Central American country tracked by the index, the process takes significantly less time, with an average of 1,474 hours, or sixty-one days, to open a small business.¹⁴Additionally, trade regulations and customs procedures are cumbersome, impeding the smooth flow of goods and increasing transaction costs. These regulatory challenges hinder competitiveness, stifle innovation, and deter foreign investment. They also create openings for corruption. Streamlining administrative processes and enhancing transparency in regulatory enforcement are essential for creating a more conducive business climate.
Infrastructure gaps: Guatemala’s inadequate infrastructure poses significant challenges for business and investors. The country’s road network is underdeveloped, with limited access to isolated regions. In addition, the country’s ports are struggling with operational inefficiency, with severe congestion resulting in vessel wait times of up to thirty days before they can unload at Puerto Quetzal and Puerto Santo Tomas.¹⁵ The energy sector, despite achieving competitive energy prices through a successful public bidding process,¹⁶is still slow with the generation of new projects due mostly to bureaucratic obstacles and community resistance to hydropower projects due to environmental and resource access concerns.¹⁷ The sector is further challenged by energy theft and targeted attacks on infrastructure, all of which destabilize the nation’s energy supply. Additionally, the lack of digital infrastructure limits access to information and public services, particularly in rural areas, further affecting transparency and accountability. Addressing these deficiencies in transportation, energy, and digital sectors is essential for fostering a more supportive environment for business activities and investment.

Guatemala ranks 134th out of 141 countries in road connectivity, a significant obstacle for business operations and investment. Poor infrastructure limits access to key markets, increases logistics costs, and undermines the country’s economic potential. Unsplash/Giovanni DS

Human capital development: Significant challenges in human capital development include limited and unequal access to quality education, skills gaps in the workforce, and high levels of informality.¹⁸ While education has become more accessible for Guatemalans, low literacy, poor retention, and disparities between rural and urban populations remain critical issues.¹⁹ These obstacles prevent the development of a skilled labor force. In addition, Guatemala’s investment in education, particularly in secondary education, remains among the lowest in the region, further exacerbating the gap in learning outcomes and skills development.International Monetary Fund. Western Hemisphere Dept.²⁰Additionally, a substantial portion of the workforce operates in the informal sector, characterized by unregulated working conditions and restricted access to social protections, thereby exacerbating inequality and perpetuating poverty.²¹ Addressing these challenges requires substantial investment in education and vocational training programs, as well as policies to promote formal employment and skills development.

A roadmap to improving the business climate in Guatemala

The Central America Task Force convened to discuss and define how the United States can work with Guatemala to accelerate business confidence and promote greater economic development and investments while supporting the country’s efforts in combating corruption and strengthening the rule of law. The Task Force’s recommendations are centered around four broad objectives: guaranteeing political stability, addressing regulatory and bureaucratic challenges, enhancing infrastructure and human capital development, and improving public- and private-sector engagement. The group also discussed the promise of nearshoring trends for Guatemala.

Improving political stability

Ensuring additional political stability is crucial for a predictable investment climate in Guatemala. The country’s recent history of political turbulence, particularly during the last presidential election in 2023, has led to uncertainty for businesses. Strengthening electoral integrity and transparency is essential to build citizen trust in the political system and increase foreign investors’ interest in the country.

To transform short-term gains into long-term rule of law improvements, the Guatemalan government should enact civil service reforms that promote transparency, accountability, and merit-based hiring practices. Establishing an independent civil service commission to oversee hiring, promotions, and dismissals can help reduce political interference and improve institutional integrity. Additionally, investing in training and capacity building for civil servants with the help of international partners like the US Agency for International Development (USAID) will ensure they have the necessary skills to perform their duties effectively.

Reducing regulatory and bureaucratic hurdles

To foster increased economic growth and attract investment, the government should undertake a comprehensive review of the regulatory framework to map out, identify, and eliminate redundant, outdated, or overly burdensome regulations. Simplifying regulatory processes and enhancing transparency will help reduce the costs and time associated with starting and operating a business.

Adopting digital technologies and automation to streamline administrative procedures can further reduce bureaucratic red tape. USAID and other development agencies can support Guatemala in developing strategic blueprints for digital governance, electronic services, and cybersecurity. By collaborating with donors like the Inter-American Development Bank (IDB), Guatemala can advance transparency and interoperability among government bodies and facilitate knowledge sharing with countries that have successfully implemented digital transformation strategies.

Enhancing infrastructure and human capital development

Addressing the challenge of increasing energy demand, ensuring the construction and operation of generation projects in the pipeline and the timely construction and maintenance of transmission lines to bring energy to strategic productive places and the rural areas are essential steps toward a more reliable energy supply. Digital infrastructure development is crucial for improving access to information and public services, especially in remote areas. Enhancing digital connectivity and promoting e-governance can improve transparency, accountability, and service delivery. International cooperation and investment in digital infrastructure will help Guatemala integrate more effectively into the global economy.

Concurrently, the nation needs to address human capital challenges as it works to unlock its economic potential. The country faces significant issues related to education, skills gaps, and high levels of informality in the workforce. Investing in education and vocational training programs will equip the workforce with the skills needed for productivity and innovation. Policies promoting formal employment and skills development are essential for reducing inequalities and fostering sustainable economic growth.

Improving public- and private-sector engagement

Promoting consensus building and coordination between the government, private sector, and civil society is essential for creating a stable investment climate. Establishing a continuous public-private dialogue platform to facilitate periodic discussions between public- and private-sector representatives—which can complement the US-led High Level Economic Dialogue (HLED)²² —can help address economic issues, facilitate information exchange, and develop effective policies. This national dialogue would enhance transparency, build mutual trust, and create a more inclusive policymaking process.

The Guatemala Moving Forward plan (Guatemala no se Detiene), a national plan dating to 2021, successfully attracted foreign investment through interagency and multisectoral cooperation. The plan includes an investment strategy to allocate $7.78 billion across one hundred infrastructure projects.²³ A renewed public-private dialogue can replicate this model to drive economic development. Establishing a dedicated fund for financing development project feasibility studies and economic landscape mapping exercises, governed by a board of representatives from government, the private sector, and civil society, would ensure transparency and accountability in fund management.

Additional actionable recommendations for combating corruption in Guatemala

Enhancing transparency and legal certainty

To combat corruption effectively, Guatemala must enhance transparency and legal certainty across all sectors. The Law for the Simplification of Requirements and Administrative Procedures²⁴ (Ley para la Simplificación de Trámites y Requisitos Administrativos), enacted in 2021, is a crucial step in this direction. As an anti-red tape law, it aims to streamline bureaucratic processes and reduce openings for corruption. As of September 1, the Ministry of Economy has transitioned to a fully electronic system for all processes and procedures. As of September 2024, close to 1,100 processes across government agencies are fully digital, and the remaining 103 remaining processes will be digitalized by the end of the year.²⁵ To complement this transition, the plan should also include training for government employees on new processes and procedures, regular audits to monitor compliance, and a public awareness campaign to inform citizens about the changes and how they can benefit from them.

Additionally, reforming laws governing the selection process for magistrates and judges across the judicial system is crucial. Strengthening this process will ensure that all judicial cases, including those related to corruption, are handled impartially and with greater efficiency, by ensuring that appointments are based on merit rather than political affiliations. Strengthening the legal framework around electoral processes, such as introducing stringent regulations on campaign financing and promoting greater transparency in electoral spending, will help minimize the influence of organized crime money in politics. Addressing political influences in the courts, particularly the Constitutional Court, is critical. Implementing measures such as random assignment of cases and independent oversight can help mitigate these influences.

Both publicizing and extending transparency measures are essential as well. The government should actively communicate the positive steps being taken through regular updates, transparency reports, and public forums. This will build trust and enhance credibility among citizens and foreign investors. Creating an online portal where citizens can access information about government projects, spending, and performance metrics can also contribute to greater transparency.

It is also critical to develop and implement robust governance models that incorporate digital tools to enhance transparency. These models should include mechanisms for regular audits, whistleblower protections, and public reporting. Digital tools, such as blockchain technology, can be used to create tamperproof records of transactions and decisions, making it easier to detect and prevent corruption. Furthermore, strengthening regulatory frameworks and ensuring harmonization and coordination across the Northern Central American countries will create a more unified and effective approach to combating corruption. This can be achieved by establishing a regional anti-corruption task force that shares best practices and coordinates efforts across borders. In this line, the northern Central American governments should re-consider the ratification of the Central American Apprehension Order Agreement, which would allow them to enforce judicial decisions from neighboring countries for specific crimes, streamlining cross-border law enforcement.

Strengthening public-private partnership laws is also essential. Clear guidelines and regulations should be developed to ensure transparency and accountability in collaborations between the public and private sectors. This includes mandatory disclosures of contracts, independent audits of projects, and strict penalties for breaches of conduct. Guatemala can draw from the experience of countries like Singapore or Dominican Republic, which has successfully implemented stringent public-private partnership frameworks that minimize corruption risks.

Digitalization initiatives

Standardizing and digitizing permits and processes will promote transparency and prevent undue interference. Creating a digital tool that standardizes permits and processes can significantly reduce opportunities for corruption. This tool should include features such as automated workflows, electronic signatures, and real-time tracking of applications. Developing a coordinated approach to digitalization across various government departments will ensure consistent application and reduce the potential for corruption. This can be achieved by establishing a central digital transformation office responsible for overseeing and coordinating all digital initiatives within the government.

Infrastructure and nearshoring initiatives

Ensuring that all infrastructure projects, especially large-scale ones like road construction and urban development, are subject to transparent bidding, execution, and monitoring processes is essential. This can be achieved by implementing an open contracting system, where all stages of the procurement process are made public. Independent oversight bodies should be established to monitor the implementation of projects and ensure compliance with transparency standards. Congress should approve important infrastructure initiatives such as a vehicle to undertake priority infrastructure projects and advance key reforms recommended in the IMF’s latest Article IV report. These include revising the public-private partnership law, enacting a new ports authority law, and passing additional legislation vital to enhancing competition and infrastructure development.²⁶

Positioning Guatemala to take advantage of nearshoring opportunities requires promoting a clear, corruption-free business environment and legal certainty. This can be done by creating special economic zones with streamlined regulations and robust anti-corruption measures, attracting foreign direct investment while ensuring transparency and accountability.

Puerto Barrios is a crucial port for Guatemala’s trade. Strengthening its infrastructure and ensuring transparent project execution will attract foreign investment and drive economic growth. Unsplash/Christopher González

Educational shifts

Implementing training programs for public officials focused on ethics, anti-corruption practices, and transparency is crucial. These programs should be mandatory and include modules on the legal and ethical implications of corruption, as well as practical strategies for identifying and preventing corrupt practices. Educating the public on their rights and how to report corruption will empower citizens and create a culture of accountability. Public awareness campaigns, community workshops, and the integration of anti-corruption education into school curriculums can help achieve this.

Comprehensive civil-sector reform is necessary to support these initiatives. This includes revising civil service laws to promote merit-based hiring and promotions, establishing performance-based evaluations, and providing competitive salaries to reduce the temptation for corruption.

Conclusion

In conclusion, the fight against corruption in Guatemala is key to unlocking inclusive economic growth, enhancing public trust, and creating an attractive investment climate. Achieving this requires progress in implementing a digital agenda, strengthening institutions, increasing public capacities, and fostering public-private partnerships. By addressing these interconnected areas through comprehensive and coordinated efforts, Guatemala can create a more stable, transparent, and attractive environment for investment and development, paving the way for sustained economic growth and improved quality of life for its citizens.

Despite the challenges previously explored, Guatemala continues to offer substantial opportunities for investors. The country benefits from solid macroeconomic stability, making its economy one of the most resilient in the region against internal and external shocks. Its diverse economy, strategic location, and potential for growth in sectors such as agriculture, tourism, and technology provide a strong foundation for future development. With targeted reforms to address corruption, improve infrastructure, streamline regulations, and invest in human capital, Guatemala can enhance its business climate and achieve sustainable economic growth. By fostering a more transparent, efficient, and secure environment, the Arévalo administration can attract significant investment and drive long-term prosperity for the nation.

The private sector in Guatemala has the potential to drive inclusive economic opportunities, especially in sectors like agriculture, tourism, urban development, transportation, and technology. Previous work from the Adrienne Arsht Latin America Center and DT Institute emphasizes the need for public-private partnerships to foster economic growth and improve job opportunities. Strengthening the legal framework and ensuring transparency in public procurement processes are critical steps toward creating a more conducive business environment.

Acknowledgements

This roadmap is the second of two as part of the work of the Adrienne Arsht Latin America Center’s Central America Task Force (members listed below), a high-level group of policymakers, business leaders, and civil society members from northern Central America who seek to create a basis for consensus and galvanize support for strengthening the rule of law and mitigating corruption, increasing productivity and enabling sustainable economic development, and reducing conflict in Guatemala, Honduras, and El Salvador. Thank you to Jason Marczak, vice president and senior director for the Adrienne Arsht Latin America Center (AALAC), for his guidance on this publication, as well as Eva Lardizabal, former assistant director with AALAC, who was instrumental during the Task Force’s meetings. We also thank the Atlantic Council’s editorial team for their support throughout this process. A special mention of Kelsey Page, associate director, communications and editorial at AALAC, and AALAC’s young global professional, Isabella Palacios, for helping bring this publication to the finish line. This publication was produced with the generous financial support of DT Institute. Thank you to DT Institute for its insights and collaboration.

About the author

Staff

María Fernanda Bozmoski

Director, Impact and Operations and Lead for Central America

Adrienne Arsht Latin America Center

Northern Triangle

Central America Task Force Members 2022-2024

The Sudan crisis has become a magnet for foreign malign influence and strategic corruption

Andrea Currie-Edwards — Thu, 19 Sep 2024 15:19:00 +0000

The toll of the ongoing civil war in Sudan is staggering. According to an estimate by Médecins Sans Frontières, every two hours a child dies of severe malnutrition in a displacement camp in Sudan’s North Darfur state. The war—a power struggle that began in April 2023 in Khartoum between the Sudanese Armed Forces (SAF) and the paramilitary Rapid Support Forces (RSF)—is now marked by 10.7 million Sudanese displaced, more than half of them children.

Sudan is experiencing its worst levels of food insecurity ever recorded, with more than 25.6 million people across ten states facing heightened risk of famine. Seventeen months into one of the world’s worst humanitarian crises, the internal conflict has spread across the country and is marked by widespread death, war crimes, recruitment of children as soldiers, rape and violence against women, disease, intentional destruction of the country’s food reserves, and now heavy rains causing flooding.

The full scope of international attention on Sudan

On August 14, a delegation, including countries supporting the RSF, claiming to want to improve the humanitarian situation in Sudan met in Geneva. The Aligned for Advancing Lifesaving and Peace in Sudan (ALPS) Group, whose members included the United States, Switzerland, Saudi Arabia, Egypt, the United Arab Emirates (UAE), the African Union, and the United Nations, convened to develop immediate actions to alleviate the suffering of the Sudanese people. The ALPS facilitated ten days of peace talks between the warring parties. The RSF attended the talks in person and the SAF attended virtually.

At the end of the negotiations, two access points for food, medicine, and humanitarian aid were opened—the Western border crossing into Darfur at Adre, Chad, and the Dabbah Road crossing, allowing access to the north and west from Port Sudan. This is a small step, but the Sudanese people need much more.

The atrocities in Sudan have not received enough attention. The lack of sustained international scrutiny, especially from the United States, has allowed the conflict to deepen. The crisis is exacerbated by the global community’s diminished will to address the root causes of the war. Corruption and personal gain are fueling the conflict. Foreign malign actors, in a fight for Sudanese natural resources and the ability to exploit the country’s strategic location, supply funds and weapons to the RSF and the SAF.

Corruption appears in many forms. According to the United States Agency for International Development, “corruption employs sophisticated schemes to siphon off the wealth of a country from its rightful owners: the people.” One form of corruption, strategic corruption, as demonstrated in Sudan, involves the improper influence by international actors in collaboration with domestic actors to weaponize practices of foreign policy or access to natural resources. Activities such as gold mining are prioritized to the benefit of domestic power and corrupt foreign interests above the interests of the people.

Sudan’s civil war has a large cast of foreign malign actors. A June 2024 report by Amnesty International found that despite the Darfur embargo, recently manufactured guns, ammunition, drone jammers, mortars, and rifles have been imported into Sudan in large quantities from Russia, China, Turkey, and the UAE. Paul Sullivan, an analyst who focuses on the Middle East and North Africa, told Voice of America last year that China is interested in Sudan’s gold deposits and the Port Sudan location on the Red Sea in relation to growing world trade.

Sudan-Russia talks that began in 2007 under Omar al-Bashir were revived in June 2024, with Sudan’s RSF agreeing to give Russia a Red Sea base in exchange for weapons, ammunition, and replacement parts for Russian-made warplanes. Russia’s extended ties to Sudan also include gold mining that is presently organized by the Kremlin’s Africa Corps (and which was formerly run by the Wagner Group).

In March 2024, Iran petitioned Sudan to establish a naval base at the Port of Sudan on the Red Sea. The SAF rejected Iran’s request. Despite the rejection, Iran has reportedly supplied the SAF with Mohajer-6 drones.

Finally, there is the UAE. In violation of the Darfur arms embargo, the UAE is supplying weapons and ammunition to the RSF, as documented by a 2024 United Nations report to the Security Council. (The UAE strongly denies arming any group in Sudan.) The UAE is also the largest buyer of Sudanese gold. The RSF commits grievous violence against civilians using funds and weapons reportedly supplied by the UAE in return for gold from the country’s massive gold supplies. In 2023, Sudan was the third largest gold-producing country in Africa, yet Sudanese civilians are dying of hunger at the hands of corrupt military factions.

How the United States should respond

Foreign malign influence in Sudan is widespread, and strategic corruption is a relatively new and complex concept. In addition, some US government agencies do not yet have a clear definition of strategic corruption that would allow them to categorize its extent.

For this reason, the United States should develop a government-wide definition for strategic corruption. Doing so could help facilitate a whole-of-government response and allow agencies to better identify the full extent of illicit activity and the foreign actors involved in Sudan and the region.

With this clearer sense of foreign malign influence in Sudan, the United States could then consider wider sanctions against states and individuals involved in the crisis, and it could encourage partner countries to do the same. In addition, Washington should continue to garner international cooperation to end the war.

The August peace talks facilitated by the ALPS Group in Switzerland have ended. The hosting delegations have returned home. The flurry of articles on the conflict, and with it the world’s attention to the floods, famine, and atrocities in Sudan, have lessened. The Sudanese people, now more than ever, need the help of the United States and the international community to bring an end to the war; identify and hold accountable everyone enabling the violence; bolster sustained engagement for greater access to humanitarian aid; and continue to advocate for peace, stability, and the restitution of the rule of law.

Andrea Currie-Edwards is a senior technical advisor for anti-corruption and illicit finance with Millennium Partners, and former consultant to the World Bank Group.

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The Sahel is now an epicenter of drug smuggling. That is terrible news for everyone.

Alexander Tripp — Wed, 18 Sep 2024 13:49:19 +0000

When surrounded by crises, it is easy to ignore the one approaching on the horizon. Yet the international community may be overlooking an emerging threat in the Sahel—one that will gravely impact geopolitics in the region and beyond.

It is no difficulty to find crises across the Sahel and its adjacent neighborhoods: Economic stagnation, extreme weather and climate degradation, multiple terrorist organizations and jihadist groups claiming territory, a series of military coups and democratic backsliding, various non-jihadist rebel and separatist alliances, a youth bulge and widespread unemployment, and a genocide all compete for sparse outside attention.

Yet, sailing from distant shores comes yet another crisis: An increase in drug trafficking, with flows originating in the Americas, crossing the Atlantic, and making their way into the markets of Europe.

This influx of drugs will have a marked impact, not only on the region itself, but also on the wider world should the worst happen.

The best-case scenario is merely the introduction of additional groups of well-funded armed criminal enterprises with international connections in an already volatile region. The worst-case scenario is the emergence of narco-terrorism on a scale hitherto unheard of and the entrenchment of partnerships between drug smugglers and increasingly well-funded terrorist groups, armed with cash and boasting access to international connections and smuggling routes.

In short, the worst-case scenario is one in which organizations such as al-Qaeda and the Islamic State of Iraq and al-Sham (ISIS) are fueled and financed by one of the largest drug markets in the world.

A bad situation getting worse

According to the UN Office on Drugs and Crime (UNODC), between 2015 and 2020, an average of thirteen kilograms of cocaine was seized per year in the region. In 2021, the amount seized rose to forty-one kilograms. Then in 2022, it spiked to 1,466 kilograms.

In comparison to 2015 seizures, that is an increase of 11,176 percent.

Before complete data for 2023 became available, the UN cited that 2.3 tons (just over two thousand kilograms) of cocaine had been seized in Mauritania alone between January and June 2023. These statistics are alarming, and they don’t even show the full picture: Amounts seized are not amounts trafficked—that amount is likely far higher.

While domestic drug use is rising across the Sahel, sparking public health crises that are ill-afforded in many countries, the region is becoming a drug trafficking corridor. The drugs are bound for outside markets, with the increase in activity attributed to Europe’s surging demand for illegal narcotics and trafficking groups searching for new routes to markets.

The region is a drug smuggler’s paradise.

Located on the doorstep of Europe and the Middle East, the region is vast and often sparsely populated. It is also riddled with economic deprivation, with an ever-increasing population of youth desperate for opportunity. The countries in the Sahel often have weak governance, widespread corruption, and ongoing battles with insurgents and fundamentalists.

On top of that, Sahelian officials and individuals are vulnerable to the influence of drug gangs—but they are not alone. There are numerous documented cases from across the world of drug gangs using officials to further their work, such as a premier of the British Virgin Islands. Following recent seizures and arrests in the Sahel, the UN expressed concerns about the range of individuals—including the political elite, community leaders, and armed groups—who appear to be involved in facilitating drug trafficking.

While the involvement of key individuals in facilitating drug trafficking is widespread, what makes the situation in the Sahel worrisome are the “armed groups” involved. In Latin America, armed groups facilitating drug trafficking are organizations such as FARC and in Southeast Asia they are militias tied to regional forces or even the drug traffickers themselves. In the Sahel, they are international jihadist organizations, ones with global ambitions and a willingness to export terror and war from their base of operations.

Worrying signs

An array of terrorist organizations operate in the Sahel region: Groups include al-Qaeda affiliate Jama’at Nusrat al-Islam wal Muslimin (JNIM), Islamic State in the Greater Sahara (ISGS), Islamic State in West Africa Province (ISWAP), and Boko Haram.

These groups control vast swaths of land in the Sahel, are expanding and entrenching their control, and are also competing with each other, propelling their searches for more resources. Because of this, they are among the groups that can most stand to financially benefit from the burgeoning drug trade.

While the drug smuggling flows are opaque, the UNODC highlights that the “limited evidence” of violent extremist armed groups involved in drug trafficking “does not mean that such groups are not involved.” These groups, the UNODC adds, are “likely to benefit indirectly” from drug trafficking, explaining that groups such as JNIM and ISGS demand taxes or fees from traffickers in areas where they operate.

Even if these organizations are not directly managing the drug trade, they stand to benefit from the routes and from facilitating drug smugglers’ operations in the territories they control. Such a partnership could be devastating for the region and beyond.

The UNODC notes that information about these groups’ involvement in the drug trade could still emerge. Historically, terrorist and jihadi organizations have embraced a more hands-on approach to the drug trade to fund their organizations and operations. The Taliban in Afghanistan has long been linked to the opium trade (and the drug trade has supported terrorism), ISIS in Syria has produced drugs for market in Europe and smuggles drugs across the Middle East, and Hezbollah has been tied to Columbian drug rings.

With the Sahel becoming an increasingly major drug trafficking corridor, terrorist groups could shift from merely facilitating the drug trade toward actively managing and participating in it, spreading narco-terrorism and expanding the funding for these groups. A war on drugs and narco-terrorism in the Sahel would be a devastating addition to the current war on terror across the region, where 43 percent of global terrorism deaths take place. A development such as this would not only be dangerous for the Sahel, but for the wider Middle East and Europe as well. Drug routes are known to facilitate other forms of international smuggling and for hiding activities from authorities—ever more dangerous when involving jihadist groups.

What the West can do

Unfortunately, the West can’t do much in the Sahel.

Both the United States and the European Union (EU) have retreated from the region, driven away by military juntas that do not share the West’s democratic values and concern for human rights. Various joint military efforts that had been underway to combat terror groups have fallen apart as the United States and EU left the region and lost partners. This is unlikely to change, and if the United States and EU lack the partners necessary to combat jihadist groups in the Sahel, they will likely also lack the ability to combat drug smuggling.

What they can do, however, is support and strengthen partnerships with the costal democracies in West Africa, preventing drugs from entering the Sahel in the first place.

West African democracies are on the frontlines of combating jihadists. Terrorists are attempting to expand operations and territory in countries including Senegal, Benin, Togo, and Ghana. These democracies are also on the frontlines of combating drug smuggling and are making waves with seizures. For example, last November, Senegal’s navy seized three tons of cocaine that was headed towards Europe. In April this year, the country made headlines for seizing 1,140 kilograms of cocaine (the most ever intercepted on land), which was headed toward Mali. More seizures followed in June. In Ghana, authorities have also clamped down on trafficking, making headlines after arresting a duo attempting to smuggle an amount of cocaine worth six million dollars through Accra’s airport and to London. On September 7 in Guinea-Bissau, authorities (with help from the US Drug Enforcement Administration and a European organization called the Maritime Analysis and Operations Centre) seized 2.6 tons of cocaine that had arrived from Latin America.

As drugs continue to flow, and as the domestic use of drugs continues to rise, West African politicians and societies are just as interested in addressing drug trafficking as the United States and EU are. These West African democracies would be willing partners in combating the twin threats of expanding terrorist groups and a burgeoning drug trade.

Should the Sahel become home to narco-terrorism, the consequences would be catastrophic, not only for the Sahel but for the world. The international community must not ignore yet another crisis.

Alexander Tripp is the assistant director for the Atlantic Council’s Africa Center.

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Experts react: Maduro has forced Venezuela’s opposition leader into exile. What should the world do now?

Atlantic Council experts — Mon, 09 Sep 2024 15:47:03 +0000

He’s in no mood to bargain. After falsely declaring victory in July’s presidential election, Venezuela’s autocratic leader, Nicolás Maduro, has continued to tighten his grip on the country rather than engage in talks with the democratic opposition. Over the weekend, Edmundo González, who independent observers say won the election by a large margin, fled to Spain after a court issued a warrant for his arrest. “I trust that soon we will continue the struggle to achieve freedom and the recovery of democracy in Venezuela,” González said from Madrid. But how? And how can the United States and regional countries help? Our experts are on the case.

Click to jump to an expert analysis:

Jason Marczak: Democracies need to make life miserable for Maduro

Kevin Whitaker: Democracies should use Venezuela’s military and private sector to squeeze Maduro

Samantha Sultoon: It’s time to tighten sanctions and limit Maduro’s access to the UN

Diego Area: González now has an opportunity to lead renewed diplomatic efforts from abroad

Iria Puyosa: With Venezuela’s opposition under siege, now is the moment for coordinated international support

Democracies need to make life miserable for Maduro

González ultimately saw no other alternative. He was left with two choices: face arrest—and likely torture—by the Maduro regime or continue the fight for Venezuelan democracy from abroad.

At age seventy-five, the choice was Spain—a longtime destination for those fleeing Maduro’s autocracy. But it’s not a choice he should have had to make. Instead, it’s a reflection of the inability of the international community to force Maduro’s hand after published vote tallies showed that González bested Maduro by more than 30 percentage points in the July 28 presidential election. While Brazil and Colombia have sought to find some type of negotiated solution, the actions of Maduro—including detaining over 2,400 people—show that he is only looking to double down on this newest campaign of repression.

González’s departure leaves opposition leader María Corina Machado to fight for a restoration of democracy in Venezuela. She will need regional and global democracies to back her up with more than just statements. Words don’t resonate with Maduro unless backed up by actions to make life miserable for him and those closest to him. Here, the recent seizing of Maduro’s plane in the Dominican Republic should be a warning of what more could be coming his way, especially with greater international coordination.

Months before his election, González said, “We’re confident that on the day the opposition vote will be so massive our victory will be indisputable.” He was right. The victory of the opposition is clear. Now, what must be made clear to Maduro are the consequences of the most blatant vote grab in recent regional history.

—Jason Marczak is the vice president and senior director of the Atlantic Council’s Adrienne Arsht Latin America Center.

Democracies should use Venezuela’s military and private sector to squeeze Maduro

González’s tragic if understandable decision to leave Venezuela represents the failure of a well-conceived effort to achieve an institutional exit from dictatorship. A government-in-exile will be doomed to irrelevance. González’s departure will increase demands from supporters in the United States from both parties, along with the astonishingly stalwart Machado, to impose new sanctions. But “maximum pressure” failed before and will again, as Maduro enjoys the support of an authoritarian bloc led by China. Moreover, sanctions on the oil sector could rebound with catastrophic economic and political consequences if they feed an otherwise likely fresh wave of emigration. Internationally, the Brazil-Mexico-Colombia diplomatic gambit appears defunct. The Venezuelan street has been largely silent.

The bitter reality is that Venezuela’s best chance in decades for an institutional democratic exit from dictatorship failed. Maduro and his thugs plainly see that neither sanctions, nor negotiations, nor popular pressure has dislodged them, despite González’s undeniable electoral victory.

For supporters of democratic change, recognition of the inadequacy of our tools is not the end of the discussion. The center of gravity of the regime remains the armed forces, where we lack entree. That path needs to be (re?) examined, perhaps in the persons of the hard men and women who led US efforts in Iraq and Afghanistan. These former officials’ will and professionalism can have special purchase with those leading Venezuela’s armed forces. They could explain to the Venezuelan generals that their responsibilities should be to support and defend Venezuela’s institutions, not the interests of the repressive Maduro regime. Meeting their unique responsibilities will bring them credit; continuing to support the dictatorship will damage Venezuela’s national interests and will have direct implications for them as individual leaders. In addition, there could be a shared interest in confronting the criminal groups sheltering in Venezuela that feed the flow of migrants and drugs to the United States.

Another unexploited angle is with the Venezuelan private sector, which has profited from collusion with the Bolivarian regime yet enjoys access to US and other Western markets. Finally, while the current leaders of Latin America’s genuine democracies in Mexico City, Brasília, and Bogotá have demonstrated their incapacity or unwillingness to press forward, civil society in all three nations can be mobilized in support of democratic change in Venezuela.

Critically, we all must acknowledge the unsustainability of the situation. A continuation of Maduro’s dictatorship will bring pain to Venezuela and a renewed flood of migrants, to the detriment of all involved.

—Kevin Whitaker is a nonresident senior fellow at the Adrienne Arsht Latin America Center and a former US ambassador to Colombia.

It’s time to tighten sanctions and limit Maduro’s access to the UN

The abrupt departure of Venezuelan opposition leader González, less than two months after the disputed Venezuelan elections, most likely reflects the level of aggressive threats the Maduro regime made against him. In addition to last week’s arrest warrant accusing him of falsifying public documents, instigation to disobey the law, conspiracy, and other charges that clearly seek to undermine the integrity of the opposition’s vote tally, regime officials have made every effort—public and private—to undermine and intimidate González and the opposition into submission. This aggressive effort to deny the Venezuelan people democratic representation by those for whom the people clearly voted in the July elections is quintessential Maduro. Time and time again, when the opportunity for a fresh start is offered, Maduro and his cronies throw it away and suffocate the will of the Venezuelan people. Declaring Christmas in October will not allow Maduro to gloss over his continued destruction of the Venezuelan economy.

While the Biden-Harris administration is carefully balancing multiple global conflicts and the United States’ role within each of them, its efforts to support the people of Venezuela will need to be redoubled, and quickly. Without González in the country and without credible, transparent election results shared publicly, the Venezuelan people will be left to wonder why they turned out to vote in the first place. They will also certainly question where the United States, European Union, and others that voice support for Venezuelan democracy do not back up their words with clear public actions.

Tightening sanctions on Maduro and his cronies responsible for continuing to undermine democratic processes and institutions in Venezuela, along with the regime’s ongoing corruption and human rights abuses, is one available step. Another public messaging step could be limiting access during the upcoming United Nations General Assembly in New York. If Maduro and his cronies seek to participate in such global gatherings, then there should be a minimum bar for entry that disallows those who squander democracy until they’ve publicly changed their ways. Further public (and private) efforts should be coordinated across the Group of Seven (G7) or other international alliances to highlight for Maduro the isolation he is inviting if he is sworn in again in January. While unlikely, there is still a narrow window for change that remains.

—Samantha Sultoon is a nonresident senior fellow with the Atlantic Council’s GeoEconomics Center, a former director for Threat Finance and Sanctions at the National Security Council at the White House, and a former sanctions policy expert for the Department of the Treasury’s Office of Foreign Assets Control.

González now has an opportunity to lead renewed diplomatic efforts from abroad

A new chapter begins in the courageous struggle to liberate Venezuela from a dictatorship that has lost its support base both domestically and internationally, following the flight of González to Spain. His life was clearly at risk after receiving multiple threats and an arrest warrant amid a wave of postelection repression, which the Inter-American Commission on Human Rights labeled as “state terrorism.” While this decision may seem like a retreat, it is undoubtedly a strategic move in the broader fight for Venezuela’s freedom.

Rather than disheartening those who support Venezuela’s democratic restoration, this should be viewed as a safeguard—González, with his legitimacy intact, is now beyond the reach of a regime that imprisons, tortures, and executes opponents while stealing elections and suppressing the people’s will. It also provides González with a historic opportunity to engage with more than seven million Venezuelans who have fled the country, many of whom were denied their political rights. Only 69,211 Venezuelans were allowed to vote in this year’s election.

As an experienced diplomat, González’s escape positions him to lead renewed diplomatic efforts with international allies. The Maduro regime will likely continue to channel resources into complex lobbying structures, influencing narratives and spreading disinformation in coordination with Russia, China, and Iran. But now the democratic opposition will have a legitimately elected leader mobilizing Venezuelan communities worldwide to counteract the regime’s economic and repressive power.

—Diego Area is a deputy director of strategic development at the Adrienne Arsht Latin American Center.

With Venezuela’s opposition under siege, now is the moment for coordinated international support

The Venezuelan regime’s forced exile of González has unquestionably crossed the threshold that democratic governments in the Americas and Europe have repeatedly warned against. Urgent action is now imperative, and democratic governments must go beyond mere expressions of concern and take immediate steps to support a peaceful transition of power that the people of Venezuela have rightfully earned through democratic processes.

While it is Venezuelans’ responsibility to continue their impressive movement towards democracy, the recent crackdown against political parties and civil society has significantly hindered progress. The movement’s leaders, including Machado, are now under siege. External support is crucial for reestablishing democracy, the rule of law, and respect for human rights in Venezuela. What can external allies do to compel Maduro to step down and ensure that a new president takes the oath on January 10, 2025?

The response must focus on severing the regime’s support from its current pillars. The US Federal Bureau of Investigation and Drug Enforcement Administration, along with agencies in partner countries, should disrupt transnational criminal networks that exploit Venezuela’s natural resources, engage in financial corruption, and have ties to organized crime. The United Nations could be a good venue for external allies to address the international support that the Maduro regime continues to receive from authoritarian states and some left-leaning democratic countries that place ideological affinity over fundamental rights. Moreover, the United States and regional countries should look for opportunities to thwart Venezuela’s security forces and ruling party paramilitaries, as they instill fear among the population—and even among the armed forces’ middle ranks—through kidnapping, incarceration, and torture.

A solid and coordinated international effort to weaken the regime pillars will enable the pro-democracy movement to force the ruling party to accept the transition, ultimately bringing about positive changes in Venezuela and the entire Western Hemisphere.

—Iria Puyosa is a senior research fellow at the Atlantic Council’s Digital Forensic Research Lab.

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Nikoladze cited by the Congressional Research Service on Georgia’s offshore law

mpirbudagyan — Wed, 04 Sep 2024 18:22:00 +0000

Read the full report here

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Mezran quoted in Al-Monitor on failed central bank coup in Libya

Atlantic Council — Tue, 20 Aug 2024 12:54:28 +0000

Jason Marczak: The international community must apply pressure for a full, transparent vote count

The post Mezran quoted in Al-Monitor on failed central bank coup in Libya appeared first on Atlantic Council.

Experts react: Maduro is clinging to power after a disputed election. What’s next for Venezuela?

Atlantic Council experts — Mon, 29 Jul 2024 15:37:57 +0000

Voting doesn’t make a democracy—legitimate and transparent counting of the votes does. On Sunday, Venezuelans went to the polls to select their next president. Early on Monday, the Nicolás Maduro-controlled election committee declared Maduro, who took over the presidency from Hugo Chávez in 2013, the winner of another six-year term. The announcement came in the face of widespread accounts of voter intimidation and other irregularities meant to deny victory to opposition candidate Edmundo González, who led in pre-election polling. “The Venezuelans and the entire world know what happened,” González said of the electoral committee’s dodgy results. Below, Atlantic Council experts sum up what to expect next in Venezuela and how the United States might respond.

Click to jump to an expert analysis:

Geoff Ramsey: Maduro is inviting the biggest loyalty test he’s faced in years

Iria Puyosa: A new cycle of heightened political turmoil looms over Venezuela

Diego Area: The world must stand with Venezuelans in their fight for free elections

The international community must apply pressure for a full, transparent vote count

The day after Venezuelans voted in massive numbers, it’s crystal clear that Maduro, a deeply unpopular authoritarian leader, was always going to claim electoral victory whether by hook or by crook. With most international observers banned from coming to the country to monitor the vote (except small United Nations and Carter Center delegations), the González campaign could only count on its own observers to verify results. The voting tabulations that opposition observers could verify (about 40 percent of the tabulations) showed González receiving 70 percent of the vote—a far cry from the 44 percent of votes that the country’s National Electoral Council claimed that González won.

It is important that the votes of the Venezuelan people are not an exercise in futility. Votes must be credibly counted. Here, it is imperative that the international community of democracies continue to resoundingly denounce fraud and take appropriate action. US Secretary of State Antony Blinken noted “serious concerns that the result announced does not reflect the will or the votes of the Venezuelan people.” Similar concerns have been raised in nearby Argentina, Chile, Costa Rica, Guatemala, Panama, Paraguay, Peru, Uruguay, Ecuador, and the Dominican Republic. European partners have also raised concerns. Even in Colombia, where President Gustavo Petro has maintained a close relationship with Maduro, Foreign Minister Luis Gilberto Murillo made a “call for the total vote count, its verification, and independent audit to be carried out as soon as possible.”

The international community must continue to exact pressure so that the will of the Venezuelan people can ultimately prevail. Not doing so would mean being complicit in the disenfranchisement of the Venezuelan people. But another six years of Maduro will also have reverberations, including new outward migration flows and new transnational criminal activity that will extend far beyond Venezuela’s borders.

—Jason Marczak is the vice president and senior director of the Atlantic Council’s Adrienne Arsht Latin America Center.

Maduro is inviting the biggest loyalty test he’s faced in years

More than twelve hours after polls closed, the fact that authorities still haven’t released the full vote count tells you everything you need to know about yesterday’s election. It seems that Maduro has decided to condemn Venezuela to six more years of conflict and isolation. Unless the government backs up its claim of victory with the full results and opens the count up to audits from observers, the international community has no choice but to respond with swift condemnation and diplomatic pressure.

This isn’t over yet. Maduro has to convince the ruling elite that he can keep things under control, but both he and the military know that he can’t govern a country in flames. He’s effectively inviting the biggest loyalty test he’s faced in years. I doubt Venezuelan elites are eager for six more years of repression, sanctions, and economic catastrophe. The opposition, under María Corina Machado’s leadership, has maintained unity and message discipline, and has the evidence in hand to document fraud and mobilize the public against Maduro’s blatant power grab. The role of the United States and its allies in Latin America and Europe will be crucial. It’s time for greater multilateral coordination in order to push the government to respect the will of the people and restore Venezuelans’ fundamental right to elect their leaders.

—Geoff Ramsey is a senior fellow at the Adrienne Arsht Latin America Center.

A new cycle of heightened political turmoil looms over Venezuela

The presidential elections in Venezuela turned out as forecasted: a high voter turnout, what appeared to be a decisive electoral win for the democratic opposition, and a blatant fraud that disregarded the will of the voters.

Due to the relatively small voting centers and the presence of witnesses from local communities, the population is convinced—as we’ve seen in an outpouring of messages and videos on social media—that González won in all electoral districts. This is strengthening the opposition’s unity and determination to continue its fight for the restoration of democracy.

Maduro’s loss of political legitimacy has left the ruling coalition vulnerable to increased instability. It will likely resort to further repression against the political opposition and organized civil society. The increase in information censorship in the week leading up to the elections is a clear sign of the severe restriction of civic space.

The democratic opposition, led by Machado, must aim to exploit divisions within the ruling coalition to weaken its power base. The Unitary Platform must also find ways to address public discontent without exposing the population to the violent repression experienced in 2017.

On the international front, Maduro is facing isolation from Latin American democracies, the United States, and Europe. Former allies, such as Brazil under President Luiz Inácio Lula da Silva and Colombia under Petro, were among the first to demand transparency in the election results. It now falls upon the United States to reevaluate the Qatar agreements. The negotiations would no longer be centered on electoral coexistence but rather on Chavismo’s exit from power after its defeat in the voting booths. The next six months will be a crucial period of intense conflict in Venezuela.

—Iria Puyosa is a senior research fellow at the Atlantic Council’s Digital Forensic Research Lab.

The world must stand with Venezuelans in their fight for free elections

No one thought it would be easy to remove an autocrat from power, but yesterday marked a new height in the Venezuelan government’s abuses to impede the will of the people. The people of Venezuela and their leadership have endured an epic journey to overcome obstacles and unite around the ideal of change. The disqualification of candidates like Machado and Corina Yoris, who represented genuine alternatives, and the subsequent voter suppression efforts and significant irregularities in the process, illustrate the regime’s determination to retain power at any cost.

Maduro’s actions to undermine the democratic process and steal this election pose grave consequences for the future of the country and have a direct impact on Latin America, the Caribbean, and the United States. By stifling free choice, the regime is not only eroding democratic institutions but also exacerbating the country’s humanitarian crisis. As a result, Venezuelans will continue to flee in search of opportunities and freedoms denied at home, contributing to an already critical migration crisis.

The world must stand with Venezuelans in their fight for a future where elections are not merely symbolic but are actual pathways to change. The integrity of the democratic process is crucial not only for Venezuela’s stability but also for the prosperity of the entire region.

—Diego Area is a deputy director at the Adrienne Arsht Latin America Center.

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Syrian elections are decided before election day

Vladimir Pran and Maroun Sfeir — Thu, 25 Jul 2024 14:02:57 +0000

President Bashar al-Assad set July 15 as election day for the Syrian People’s Assembly in the areas controlled by his government. As the electoral process unfolded, our series of articles deconstructed the key elements of Syrian elections and their role in legitimizing Baath Party rule. This series will also conduct a deep dive into the challenges of moving ahead with electoral reform in the United Nations (UN)-facilitated political process. The first article of the series discussed the outline of the election process and its significance, while the second article examined the system of representation, which determines the voting method and how many candidates will be elected from each of the districts. The third article presented the structure of the Syrian electorate. This article unpacks the role of various institutions in administering elections and the candidates.

The absence of an independent electoral administration in Syria is not news to anyone. The electoral authorities are deeply embedded within the judicial and executive structure and operate as extensions of the ruling party’s apparatus, rather than as impartial overseers of the electoral process. This integration ensures that electoral commissions at all levels, from national to regional, strictly adhere to the governing party’s agenda.

The administration is not a centralized system under a single hierarchical institution. Instead, it involves multiple governmental and judicial bodies. At the top of this system is the Supreme Judicial Elections Committee (SJEC), which in practice is appointed by presidential decree instead of by the Supreme Judicial Council (SJC) as required by the law. The SJEC is neither equipped nor mandated to implement elections, as it does not have staff or offices for election operations.

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Below the SJEC are the governorate-level subcommittees. Nominally, these should be the key institutions in managing election operations other than the candidacy process, which is managed by the nomination committees that work independently from the governorate subcommittee.

Both committees are staffed by judges who approach their work by focusing on providing legal cover for processes implemented by other institutions, rather than actively managing electoral operations.

These committees suffer from the same lack of independence as the rest of the judicial system in Syria, as the president wields significant control over the judicial system overall. He is a member of the SJC and appoints the Supreme Constitutional Court, which handles election appeals.

However, even if the judicial committees were more independent, they would have little control over the process: the Ministry of Interior (MoI) is the key operational entity. It is tasked with various matters, such as managing the voters register, custody over all the electoral documents, procurement and management of sensitive election materials, and logistics.

At the local level, election day operations are managed by election committees composed of civil servants appointed by governors. These committees are part of the governmental structure and do not report to the SJEC, further eroding the processes’ independence. The committees are hardly trained, as their training consists of oath-taking ceremonies with little focus on the actual procedures.

The lack of comprehensive regulations that are supposed to operationalize the election law exacerbates these issues. With judicial commissions reduced to issuing appointments and loose guidance, many aspects of the elections remain unregulated. This regulatory vacuum gives the MoI and election committees significant discretion in implementing electoral procedures.

In conclusion, the Syrian electoral administration system is designed to centralize control under the president through the judicial system, governors, and the MoI. This structure eliminates any meaningful chance for truly independent elections, as every key aspect of the electoral process can be traced back to presidential influence or control.

All this raises the question: what are the options for credible management of elections in Syria? Can the system be reformed by focusing on key problematic aspects? That said, the system is so deeply flawed that it needs to be rebuilt entirely for elections to enjoy any credibility. The standards required are familiar and often used in post-conflict settings, such as establishing a new independent electoral management body with authority to both regulate and implement elections and whose leadership is appointed through a consensual process. Until that is possible, United Nations Security Council (UNSC) Resolution 2254 attempts to provide a transitional fix, stating that elections should be “administered under supervision of the United Nations.”

However, the term “supervision” has various forms and definitions, even within the UN framework, and the UN’s role has ranged from approving steps in the management of the process to “conducting” elections as part of the peace process, as it did in Cambodia, Eastern Slavonia, or East Timor. Yet, such deep involvement of the UN in Syrian elections would require a high degree of political consensus among the UNSC members, which is hard to envision.

On the other hand, when examining the system and the candidacy process, it is apparent that the laws and procedures—or lack thereof—are tools serving a single purpose: eliminating candidates not endorsed by the Baath Party.

The constitution neither protects nor restricts the right to run in assembly elections. Instead, candidacy is entirely regulated by an election law adopted in 2014 by presidential decree. This law introduces several unfair limits on this right. Some restrictions, like the ten-year Syrian nationality requirement, seem minor but impact those with unregularized status (except for Hasakah’s Kurds, who were designated as foreigners or “ajanib”) and potentially up to 4 million Syrians living overseas.

There are a few more restrictions of particular concern for those who opposed the Assad regime, such as the exclusion of those who have been sentenced for a “felony or misdemeanor that is dishonorable and shakes the public trust.” These offenses are defined by the decree of the justice minister and disqualify all those sentenced for political reasons. However, even if the offense does not fall into this category, all criminally convicted individuals automatically lose their civil and political rights, including the right to stand for office, for ten years after serving their prison sentence.

Those eligible to apply for candidacy must navigate a process that is only vaguely regulated, giving judge-led committees considerable flexibility in deciding on nominations. For example, committees may request an “accredited certificate” proving literacy even when candidates present university degrees. Another quirk requires candidates who wish to contest a “worker or famer” seat to prove they are not listed in industrial or commercial registers.

As presented in the electoral system article, candidates not running on the Baath-endorsed National Unity (NU) List have minuscule chances of being elected. What, then, explains the large number of candidates for the 250 seats in the assembly? For example, in the SJEC accepted 11,341 applications in the 2016 elections, 8,735 in 2020, and 9,194 in 2024. The answer is that the Baath Party encourages members to apply in massive numbers as an indicator of vigorous and credible political competition. Registering for candidacy with the SJEC is only the first prerequisite for becoming a Baath candidate. The second step is the Baath Party process, in which the aspirants compete for the endorsement. This is colloquially called “primaries,” but “consultation” would be a more accurate term.

Without a real election campaign—as a case in point, the NU lists of candidates were only published six days before the polls—hyping up the primaries is essential for the illusion of choice. And, because the Baathists not featured on the NU lists have little chance of winning a seat, the primaries are more important than the polling. Most of the aspirants not included in the list withdrew before election day, so only 1,516 candidates are heading to the polls.

Despite being central to elections, the primaries are still just theatrics rather than a genuine competition. While they look like a proper election process on the surface, their results are not binding. The participation of Baathists is wide and includes an “electronic voting system” that could be easily manipulated and does not guarantee secrecy, and “the party independent election commission” oversees the process. Yet, the result of voting is only advisory. The final say remains with the top Baath Party body, the Central Command, which regularly tweaks the results, claiming to have taken into consideration the “opinion of the general public.” That outcome is regularly criticized on social media.

The primaries may not be the most intriguing process for those interested in internal Baath politics. Instead, the internal elections for the positions in the Baath bodies, which culminated in a series of appointments and dismissals of party leaders earlier this year, could provide a better insight. It appears these elections had some impact on the leadership structure, as a whole new central leadership was elected and most of the new leaders are in their fifties. Some have concluded that the new leadership might be more interested in engaging the general membership and more open to critical voices.

The Baathists on the NU List were announced, with a delay of two days, on July 9 and for unclear reasons. Baath-affiliated media justified the delay by arguing it was to “ensure fair representation, support the democratic process, and respect the voters’ will in a balanced manner.” But the concurrent news of the dismissal of the nineteen incumbent members of the assembly for “low ideological awareness,” and the lifting of the immunity of another seven members due to corruption, attracted interest and was a matter of debate in social media.

A cursory review of the NU lists reveals that the number of incumbents (fifty-eight) is somewhat lower than in the 2020 elections (sixty-eight), which might reflect the above-mentioned renewed party leadership. The Baath strategy appears to be the promotion of lower-tier loyalists to rebuild party discipline. A deeper analysis of that trend is warranted and should examine why the governorates with the highest turnover are Damascus, Deir ez-Zor, Idlib, Tartous, and Raqqa. On the other hand, Daraa (where five out of eight candidates are incumbents) and al-Hasakah (with six incumbents out of eleven) seem to have only a few replacements.

The number of women in the assembly is consistently trending downward—in 2020, it dropped from thirty-three to twenty-eight—and this year’s elections did not reverse that trend. Twenty-two female candidates are now on the NU list (12 percent), even fewer than in 2020 when NU featured twenty-five women. The Baath Party could easily endorse more women if it wanted to promote women’s participation, as the 2020 elections show that women have minimal chances to be elected outside of the NU lists (only 1.5 percent of the non-NU candidates are women), so the Syrian parliament will likely remain one among those with the lowest representation of women in the world.

The candidates running for the uncontested seats are colloquially called “independents.” More than one thousand of those remaining in the race competed for the sixty-five seats. They sometimes formed “independent candidate lists,” mostly in urban governorates like Damascus and Aleppo. These are often businessmen or militiamen closely affiliated with the regime, supporting the facade of diversity. In some cases, they feature prominent personalities, such as the Damascus list “From Damascus For You Syria,” which includes Mohamed Hammam Miswati and Bilal Naal, assembly incumbents with close ties to the Assad regime. Another Damascene list is “Sham List,” which features the incumbent Mohamed Hamsho (sanctioned by the European Union and the United States). Others, like Wael Melhem from Homs, ran without forming a list and count on personal prominence.

And while the polls were held on July 15, the elections were effectively over at the end of the primaries. The candidates on the National Unity list will sit in the assembly. If there was hope for even a minor opening of political space, the regime sent a clear message: there was no interest in political reforms. Elections are only an aspect of internal Baath consolidation, and the assembly will have free rein for constitutional amendments needed to allow Bashar al-Assad to stay in office beyond 2028.

Vladimir Pran advises electoral authorities, governments, and political leaders on transitional, electoral, and political processes.

Maroun Sfeir advises international and local civil society organizations, political groups, and electoral authorities on electoral and political processes.

The post Syrian elections are decided before election day appeared first on Atlantic Council.

How Venezuela became a model for digital authoritarianism

Iria Puyosa, Andrés Azpúrua, Daniel Suárez Pérez — Mon, 22 Jul 2024 11:00:00 +0000

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Once the most vigorous democracy in Latin America, Venezuela started down a slow path toward autocracy twenty-five years ago. It also became a model for digital authoritarianism and an exporter of democratic backsliding to the rest of the Americas. Control of the information space, widespread surveillance, and digital repression are significant pillars of the current regime’s survival. Incumbent Nicolás Maduro is counting on this, along with electoral manipulation and judicial control, to remain in power as Venezuela holds a presidential election on July 28. Nonetheless, a cohesive democratic coalition mobilizing the population across the country has a serious chance of making this election the starting point for a transition toward re-democratization.

The media landscape in Venezuela is fragmented and marked by censorship. The rise of government-run media and state control through ownership changes or censorship mechanisms led independent journalists to migrate to small internet outlets. Venezuela’s media ecosystem shrank further when the country’s economy collapsed after 2015. The aftermath of the 2017 cycle of protests saw another significant shift in the media landscape, with surviving newscasts characterized by censorship and heavily biased coverage in favor of the ruling party. In addition, censorship has caused the closure of many radio stations, leaving many areas without access to local or regional news. The National Telecommunications Commission in Venezuela routinely censors the use of certain topics and words during programming, and also bans interviews with democratic opposition leaders. It prohibits public coverage of corruption allegations or human rights violations attributed to state officials or their family members, coverage of citizen protests or demonstrations against the regime, and discussion of international courts and other human rights entities.

In their new report, “Venezuela: A playbook for digital repression,” Iria Puyosa, Andrés Azpúrua, and Daniel Suárez Pérez dive deep into the state of media in Venezuela, the role it played in the country’s slide toward authoritarianism, and whether other Latin American countries will adopt Venezuela’s model of digital repression.

Additional contributions by Marco Ruíz and Valentina Aguana

Edited by Iain Robertson and Andy Carvin

The impact of corruption on cybersecurity: Rethinking national strategies across the Global South

Robert Peacock — Tue, 02 Jul 2024 00:08:00 +0000

Executive Summary
Introduction
The digitalization of the Global South has only begun
Corruption in public procurement
What is in the National Cybersecurity Strategies – And what isn’t
Global South lessons learned: The Ukrainian response to corruption
Policy recommendations drawn from Ukraine
Addressing corruption in cybersecurity strategies
Conclusion
About the author

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Executive summary

Recent government-wide shutdowns of information systems in a half-dozen developing countries ranging from Albania to Vanuatu suggest that ransomware and state-sponsored attacks are finding success in targeting critical infrastructure networks of the Global South. Over the first decade of their integration with the digital economy low-income and lower-middle-income countries faced relatively few cyberattacks, but that honeymoon appears to be over, with the Global South now ranking first in cyberattacks per institution and cyberattacks per capita.

As mobile device e-commerce and ICT networks continue to expand across the Global South, this rise in cyberattacks is not surprising. Nevertheless, the level of digital integration in the region still trails the rest of the world, suggesting the record-setting levels of cyberattacks may be the result of vulnerabilities systemic to the region. The most corrosive of these problems is corruption. While few governments in the Global South have publicized the role of IT corruption in critical infrastructure enterprises, this analysis builds on donor and regional software association investigations to argue that IT departments in the Global South are vulnerable to corrupt procurement schemes catalyzed by the proliferation of pirated software.

Until recently the prevalence of pirated or lapsed licensed software on government networks across the Global South may have led to little more than poor or unpredictable network performance. This is no longer the case today, as networks built around pirated software serve as easy targets for ransomware gangs and hacktivists that still find decades-old malware like the “WannaCry” worm to be effective in countries challenged by systemic corruption.

In response to the growing cyber threat, governments in the region and foreign donors focused their response on the best practices found in the action plans and policy initiatives drawn from national cybersecurity strategies designed for the Global North. As a result, not one government’s national cybersecurity strategy in the Global South recognizes corruption as an important issue for critical infrastructure network security.

This analysis underlines the effects of addressing corruption on cybersecurity by highlighting the positive impacts of Ukraine’s switch to an autonomous and transparent procurement platform by comparing the experience of cyberattacks in 2017 with those that accompanied the 2022 full-scale invasion of the country. Taking these lessons forward, cybersecurity officials across the Global South must consider identifying procurement corruption as a cybersecurity risk and develop initiatives to mitigate the impact of systemic corruption on cybersecurity.

Introduction

“Cyber criminals are coming for the Global South”

Deutsch Welle¹

The global revolution in information and communications technology (ICT) has expanded educational and economic opportunities across the Global South² even as it brings new threats of inequality and cyber vulnerability. Whether these countries are prepared, they now represent the fastest-growing population of new internet users. Moreover, malicious hackers have recognized this rise in networked users, with Latin America and the Caribbean now leading the globe in the rate of cyberattacks as a share of the networked population,³ while Africa leads in the rate of cyberattacks per institution.⁴

The process of digital transformation started later in the Global South, which likely limited the vulnerability of these countries to ransomware attacks. This is no longer the case. Vanuatu served as a wake-up call in 2022 when most of the island’s public services shut down after hackers encrypted the government’s data networks.⁵ The ransomware gang’s commitment of time and resources to infiltrate Vanuatu’s government networks demonstrates that even the smallest nations in the Global South can no longer assume they will be overlooked by global hacker organizations.

A critical lesson from the first decade of ubiquitous cyberattacks is the importance of patching an enterprise’s network software. Unfortunately, the vulnerabilities that IT professionals must track and patch each year have been growing, especially since the arrival of cryptocurrency in the mid-2010s offered the first practical means for hackers to receive payments after locking up or seizing data.⁶ Figure 1 shows MITRE’s recorded annual increase in registered vulnerabilities and exposures, which shows the growth has been rising at an exponential rate since 2018. As ransomware began to grow and criminal organizations sought to continue finding lucrative and vulnerable targets, hackers suddenly turned to institutional networks in countries they might never have heard of before researching potential targets.⁷ A growing horde of ransomware organizations appear to be choosing targets based first on vulnerability, which has resulted in more attacks on institutions in the Global South.⁸

Although the need to patch software vulnerabilities has never been higher, corrupt practices in software procurement explain why many organizations do not regularly update their security. Functioning software that was not legitimately acquired rarely provides a connection to the software vendor.⁹ The presence of pirated software on a network reduces the likelihood that the network is regularly receiving updates that the software’s producer distributes to patch newly discovered vulnerabilities.¹⁰

An organization’s cybersecurity can also face vulnerabilities due to obsolete versions of software still running on its network. This can happen for multiple reasons, from vendors going out of business to developers choosing to no longer support a product line. In underfunded institutions across the globe, it is not rare to find the continued use of obsolete software. This vulnerability is further exacerbated by procurement managers prioritizing corrupt rents over issues of trusted vendors or sustainable support for software.

Given the epidemic levels of corruption in public and private procurement across the Global South,¹¹ this study draws from recent cybersecurity experiences in European and Eurasian economies similarly challenged by corruption to argue that a digitally integrated Global South may be more susceptible to cyberattacks than those in the Global North. While the limited scale of the digital economy across most of the Global South continues to keep these countries out of top spots in terms of the total number of attacks, the Global South has suddenly become a disproportionately high malware target.¹² This new reality reflects unique challenges to cybersecurity in the Global South and also suggests that the solutions to this challenge may not be found in the traditional national cybersecurity strategies based on the playbooks of more developed countries.

The digitalization of the Global South has only begun

The International Telecommunication Union estimates that the Global South passed the milestone of more than half of its citizens gaining access to the internet in 2022. At this growth rate, more than 75 percent of the Global South will be connected by the end of 2025.¹³ Most of this access is represented by limited bandwidth connections to mobile phone subscribers, which allow for a range of services to citizens that, because of resource constraints or great distances, were previously impractical to offer at scale. For example, the tiny nation of Vanuatu provides its citizens residing across its far-flung islands the ability to use mobile phones to pay utility bills and taxes or initiate government document requests without a long trip between islands.¹⁴ The economic impact is enormous for citizens who are no longer required to spend 1-2 days of travel for administrative tasks.

Figure 2

The private services offered by early mobile phone entrepreneurs in the Global South have been no less impressive. Widespread mobile phone use looks to be a pathway from poverty for millions of citizens once isolated from the global flow of information resources.¹⁵ ICT-based businesses may already be the leading force for economic growth in many of these countries. A study between 2007 and 2016 found mobile phone diffusion had a more significant impact on the rise in gross national product (GNP) in Sub-Saharan Africa than any other form of investment.¹⁶ Across Africa, rural residents who lack access to landline phones or banks benefit from nearly one billion mobile phones that allow them to tap into the internet sites (notably, banking and wholesale services) necessary to engage in entrepreneurial activity.¹⁷ Moreover, the nascent digital information space in these countries has allowed the emergence of internet-based businesses specifically supporting rural entrepreneurs with a range of supply chain and logistic services.¹⁸

Despite the rapid growth in mobile phone-led economic activity, most countries in the Global South are just now starting to develop the ICT infrastructure needed to support this demand. Many states in the Global South have only completed the “first mile” of broadband access–global connections to their capitals and large cities–and large parts of the population still lack access to reliable broadband internet.¹⁹ Like mobile phone connectivity, widely distributed broadband is positively associated with economic growth. Two findings have become measuring sticks in the digital development sphere: the World Bank estimates that a 10 percent increase in broadband leads to a 1.4% increase in GNP²⁰ and the McKinsey Global Institute found ICT economic activity over the first decade of internet connectivity may have accounted for more than 21% of the gross domestic product (GDP) growth in mature economies.²¹

The new wave of ICT development in the Global South is realizing this economic potential by bringing broadband infrastructure to smaller cities and rural communities. Improved connectivity is already affecting the quality of life in the Global South,²² allowing for national e-business, good governance solutions, and social services like healthcare and education to operate beyond the limited bandwidth offered by mobile phone data connections.

The World Bank has provided more than $1.2 billion in ICT lending alone for broadband development in Africa, the South Pacific, and the Caribbean.²³ Moreover, Nigeria and Mozambique have led the way in Africa by licensing SpaceX’s Starlink service, which offers near broadband connections through low-orbit satellites for private users.²⁴ Certainly, Starlink’s fees and terminals are barriers to access for most citizens in the Global South, but it and future providers are the first competitors to largely state-owned services in the region that have not succeeded in providing economical and reliable high-speed service across large swaths of territory.

Nevertheless, the growing benefits of the information age in the region come with risks–this same connectivity also attracts scores of cyber criminals who expect to profit from vulnerabilities in connected enterprise networks.

Corruption in public procurement

Corruption in procurement processes is a global problem, but the scale of systemic corruption in procurement tenders in the Global South has long been a major obstacle to developing effective governance and prosperity.²⁵ This issue does not go unrecognized by local leaders and external advisors, but they rarely account for this threat when drafting new regulatory or development initiatives.²⁶ The backroom decisions on what hardware and software is purchased for large enterprise information networks may be the archetype of systemic corruption but it is routinely missed by national cybersecurity strategists.

As with most forms of corruption, there are few studies on corrupt practices in software procurement but countless anecdotes of rent-seeking found in public sector network management in developing countries.²⁷ In this author’s thirteen years of experience overseeing IT development projects in four post-Soviet countries in Europe and Eurasia, this was the common view of corruption held by those working for critical infrastructure enterprises and IT Departments inside and outside government. Control over IT procurement decisions in systemically corrupt countries is ideally suited for inflating costs and hiding kickbacks because networks are built around software that is neither visible nor readily measurable as authentic through the standard procurement oversight measures of quantity, delivery, and price.²⁸

Another barrier to changing the software procurement culture in the Global South is the social norms and expectations among senior management and network administrators who in their everyday lives use or interact with pirated software on personal devices.²⁹ In countries where the use of pirated software is not viewed as a significant ethical or technical issue, managers of critical infrastructure enterprises may be less hesitant to acquire cheaper, pirated software for their networks. In fact, this may even be perceived as a positive decision that reduces the organization’s IT budget.

The Business Software Alliance (BSA) found that although globally one-third of software in the private sector is unlicensed, in countries in the Global South this proportion may be twice as high. In the last breakdown for the Middle East and Africa in 2019, for instance, the BSA found that fifty-six percent of software in use was pirated.³⁰ This short-sighted view of the risks of pirated software undermines the state’s ability over the long term to protect domestic networks from cyberattacks. While most government officials in the region were raised in a previous era of altruistic websites distributing unlicensed software with few downsides, this is no longer the case. One of the few studies examining pirated software samples from eleven developing countries found that 61 percent contained malware.³¹

The illicit rents found in legal software procurement, on the other hand, come in the form of bribes paid to one or more employees at the purchasing firm, an intermediary, or the supplier. This can occur through the purchasing enterprise soliciting the bribe (extortion), the seller offering the bribe for colluding (kickback), or an intermediary receiving fees or commissions on the inflated price of the transaction.³² Interviews with investigators of private procurement fraud in the Global South find that most align with the dominant embezzlement practices found in the country’s wider economy.³³ As the seller can often procure pirated or unsupported software at a fraction of the market price, the rents gained by the supplier can approach 100 percent of the stated cost.

An organization that continually uses pirated or unsupported software will likely develop a culture of avoiding–rather than actively pursuing–interactions with its software’s producers. Although some software companies claim to provide software patches to customers even after they stop paying for licenses, in practice those using pirated network software rarely receive updates from the vendors.Angela Moscaritolo, “Losses from software piracy leads $51 billion in 2009,” SC Media, May 13, 2010, https://ww³⁴ It is a source of debate as to where the blame lies. On the one hand, users complain of significant technical hurdles for updating unregistered software. On the other hand, vendors claim that few network administrators overseeing unlicensed copies ever seek them out, leaving them unaware of who is running pirated copies of their unpatched software. In either case, the presence of pirated software increases the likelihood that the organization’s network is susceptible to vulnerabilities.³⁵ Even if an unregistered organization seeks out and applies a patch, because the process is not timely or automatic, there will always be a window of time with unpatched vulnerabilities.

In evaluating their country’s cybersecurity posture, governments in the Global South must measure the degree to which pirated and unpatched software is present on their information platforms and identify mechanisms that can decrease their rate of use. It may be wise for policymakers to look at culture and practice instead of simply increasing IT budgets. Comparative country research shows that the income of countries or individual enterprises was not a consistent predictor of choosing licensed or pirated software. Instead, the strongest predictors were a tolerance of open pirated software markets and the degree of systemic corruption in the country.³⁶ Moreover, a comparison of a half dozen policy measures in eleven African countries found that the strongest initiative reducing the presence of pirated software on networks was implementing corruption-control policies, not measures that raised incomes or procurement budgets.³⁷

Case study: IT procurement corruption in Pakistan

Even donor-funded procurement can fall victim to IT procurement schemes. Drawing on a 2019 World Bank loan, the Pakistan Federal Board of Revenue (FBR) used $80 million to upgrade the Karachi data center as its hardware and software were no longer supported by vendors and had been assessed as “end-of-life equipment.”³⁸ Just a year after the procurement, the US Assistant Secretary of State Alice Wells publicly accused FBR of using pirated versions of US software in the data center.³⁹ A year later, a suspected Russian cybercriminal gang gained access to the center’s more than 1,500 computers and data; reportedly benefiting from the pirated and unsupported Microsoft Hyper-V software used for the virtual hard disks storing FBR data.⁴⁰The FBR has never identified the vendor involved in the World Bank procurement or whether they paid the ransom to unlock their data that was advertised for sale on a Russian dark web site.

As countries struggling with public corruption or high levels of pirated software integrate further into the global digital economy, they are increasingly susceptible to cyberattacks on their critical infrastructure. Some observers already view 2022 as an inflection point in the rising number of successful hacks of smaller countries.⁴¹ In July 2022, for example, the government of Albania was forced to shut down its government computer and internet systems after a devastating cyberattack. The intrusion was a result of an unpatched version of the file-sharing software Microsoft SharePoint Server (versus the more common cloud-based Microsoft 365 SharePoint) that understaffed IT teams had maintained for years on their networks.⁴² Albania has not chosen to explain how its software did not get the patch for this vulnerability released automatically by Microsoft two years earlier. As mentioned previously, the island nation of Vanuatu was also hit by a ransomware attack in 2022 that froze nearly all government network servers, shutting down fire and rescue services, erasing five months of court data, and preventing 315,000 citizens from paying taxes or utilities.⁴³ That same year, two more ransomware attacks by the Russia-based Conti Group led the Costa Rican government to declare a national emergency,⁴⁴ and cybercrime groups also temporarily gained control of government networks in Montenegro and Chile.

Regardless of the technical cause, the lessons from these examples are the same: Countries seeking to protect networks across their critical infrastructure must prioritize systematic communications with software developments and implement regular updates or face an army of hackers that target unpatched vulnerabilities to gain control of a network.

The ascendancy of cyberattacks in the Global South buoyed by these successful breaches also suggests that cybercriminals are now targeting small or economically challenged countries because they may be viewed as “softer” hacking targets. Certainly, enterprises around the world continue to pay ransomware, as 2023 set a record for total and average payments of ransoms. The recent cybercriminal focus on the Global South, however, may partly reflect a perception that their networks represent lower-risk targets with a higher willingness to pay for returning access to their data.⁴⁵ The strong correlation between systemic corruption and a preference for pirated software may shape an approach to ransomware that is appealing to cyber criminals. If an organization’s management has been earning significant kickbacks on purchases of pirated software, for example, they are unlikely to pursue a strategy of resisting ransom requests, instead quietly choosing to pay and maintain the status quo. The focus on the Global South may also reflect a landscape of reduced opportunities in the Global North. Leading ransomware negotiator Coveware recently reported that the portion of victims in the U.S. paying the ransom has fallen by half over the last three years (See Figure 3); the same exact period that has seen a dramatic increase in attacks on enterprises in the Global South.⁴⁶

Moving forward, more and more government institutions and critical infrastructure enterprises in the Global South will likely be targeted as they continue to integrate with global information and communication networks. What is less certain is whether the procurement culture in these countries can keep up by transforming from one of avoiding the attention of software developers to a strategy of maximizing communication and exchanges. This transition is unlikely to succeed if corrupt practices continue to incentivize avoiding transparent procurement and collaboration with vendors to support resilient network systems. Moreover, the transition will require a proactive government guided by a clear national cybersecurity strategy that addresses the unique cyber policy challenges in the Global South.

What is in the National Cybersecurity Strategies – And what isn’t

As digital connectivity continues to expand, more than 100 countries have developed national cybersecurity strategies to serve as the framework for synchronized public-private cybersecurity development. A review of the twenty-three published national strategies from countries in Africa and the Asia-Pacific region found that, in general, the strategies’ objectives were grouped across a minimum of four pillars for strengthening cyber resilience.⁴⁷

The first common pillar consists of strategic objectives that often include developing new cybersecurity agencies and/or improving coordination between disparate ministries overseeing cybersecurity policy. This pillar also includes new policy initiatives based on gap analyses of the country’s cybersecurity architecture. The government’s structural reform steps are often intertwined with the second pillar of legislation and regulations. The Council of Europe has been the most influential donor in this space, assisting in the development of legislative frameworks and advising in the development of national cybersecurity strategies in at least nineteen countries in the Global South.

The last two pillars focus on external initiatives. The third pillar is focused on public-private partnerships, including cooperation with multinational software producers and other governments pursuing cybersecurity. The fourth major pillar usually describes information campaigns and education initiatives that would strengthen cybersecurity in the workforce. While national strategies in the Global South have prescribed more limited activities in the fourth pillar, the EU has recently joined the US in developing cybersecurity workforce frameworks to bridge the gap between the planning and development of cybersecurity educational standards and the workplace requirements for the knowledge and skills needed to defend critical infrastructure networks.

Across the national cybersecurity strategies in the Global South, not one of the twenty-three documents contained the terms “corruption” or “pirated software.” In some ways, this is not surprising. The leading roadmap to developing a national cybersecurity strategy, the UN’s International Telecommunication Union’s (ITU) Guide to Developing a National Cybersecurity Strategy, also does not reference corruption or pirated software. The 2018 guide was produced by a partnership between ITU, the World Bank, the Council of Europe, the Organization of American States (OAS), Interpol, Microsoft, Deloitte, and the NATO Cooperative Cyber Defense Center of Excellence, as well as several think tanks. The guide specifically states its objective is “to “provide direction and good practice on ‘what’ should be included in a National Cybersecurity Strategy, as well as on ‘how’ to build, implement and review it.”⁴⁸

Case study: International counter ransomware initiative

The most significant US-sponsored global cybersecurity initiative is arguably the International Counter Ransomware Initiative (CRI). Now in its third year of existence, the group has established a platform for capacity building and developing best practices to reduce the success of ransomware, including via a joint statement that member countries should not pay ransoms.⁴⁹ Although more than a dozen of the fifty nation-state participants in the CRI are considered Global South countries that face significant challenges in addressing systemic corruption, the CRI’s policy and capacity-building efforts have so far followed the ITU and World Bank’s lead in not addressing procurement corruption as part of cybersecurity initiatives.⁵⁰

As representatives of government and civil society in the Global South look to further develop and reassess their national policies and infrastructure for cybersecurity, they are unlikely to find anti-corruption best practices in the prevailing guiding documents and best practices. The reality is that top cybersecurity officials in North America and the EU do not consider the role of corruption to be a major or even minor factor in their country’s cybersecurity resilience. Instead, countries in the Global South must consider the context of corruption and its impact on cybersecurity and critical infrastructure resilience when developing their strategies, as well as learn from the experiences of other states’ adoption of reform initiatives focused on procurement corruption.

Global South lessons learned: The Ukrainian response to corruption

Ukraine offers a case study of how a country challenged by systemic corruption can reduce its impact on network security. In the years leading up to the start of open conflict with Russia in 2014, on more than one occasion senior officials in Ukrainian ministries iterated to the author that they would rather cancel a project than not receive their preference for an expensive network software solution. In at least one case this prevented a donor-supported project from moving ahead as the ministry refused to use a simpler, less expensive software product that was more aligned with their needs and local network. Across several ministries, the practice of procuring the highest-cost network solutions over this period would result in arrears owed to the vendor due to the inability to pay annual fees. At one point, the sales representative of a global network software company told the author that they would not sell new software to a US-funded project if the ministry did not agree to pay off years of outstanding annual license fees owed from past procurement.

By late 2014, as the first wave of cyberattacks on Ukraine preceded the Russian military’s annexation of Crimea, most critical state infrastructure had been operating for years without licenses (and the associated updates and patches), even legally purchased software.⁵¹ Many institutions were instead paying a fraction of the retail price to obtain pirated versions of software, which conveniently left the bulk of the recorded procurement expenditures for corrupt rent-seeking. This explains how, prior to 2014, an estimated eighty percent of the network software used in Ukrainian private and public enterprises either never had been or no longer was supported by the software’s vendors.⁵²

As hackers associated with Russia began cyberattacks in support of the new “special operation” in Ukraine, they targeted local software commonly used in the two countries by exploiting vulnerabilities for which patches had not been installed.⁵³ Most notably, in 2015 the Russian military hacker group Sandworm used Blackenergy-3 malware to temporarily knock out the information networks of three energy distribution companies, denying power to more than 200,000 homes in 2015. The next year, the Industroyer-1 malware was used to target the Kyiv region’s power grid.⁵⁴ Slovakian cybersecurity firm ESET found that the hackers benefited from knowledge of common post-Soviet electric grid networks and control system software. ESET reported that a major factor in the success of the power grid attacks was the failure of Ukrainian electrical distribution enterprises to change obsolete and unpatched operating system software.

In arguably the most damaging cyberattack in history, in 2017 the Sandworm group unleashed the NotPetya wiper malware that specifically targeted a well-publicized vulnerability in Microsoft network software that the company had patched in updates a few months before the attack. At that time, most Ukrainian enterprises were using either pirated or older versions of Microsoft data management software and thus did not receive timely or automatic updates.⁵⁵ Although Microsoft and other vendors in principle permit operators of pirated software to request and apply updates, this is rarely accomplished and the exploitation of unprotected networks in Ukraine accounted for more than an estimated $10 billion in commercial losses.⁵⁶ The NotPetya malware is also an example of a software vendor advertising new software updates after an attack. A secondary effect of this disclosure, however, is that it provides hackers a roadmap for similar attacks on other unpatched systems in the Global South.

Policy recommendations drawn from Ukraine

Since 2017, Ukraine has adopted, with mixed results, a range of internal and donor-supported anti-corruption initiatives ranging from the establishment of investigation bureaus to prosecuting state corruption and mounting ad campaigns that promote good governance.⁵⁷ One of the most well-known developments, which also had an outsized impact on software procurement corruption, is the launch of a national e-government tool for public procurement.⁵⁸ A public/private-administered electronic platform for government tenders, ProZorro, which means “through transparency” in Ukrainian, began operating with more than 300 private suppliers in 2016. ProZorro largely put an end to backroom procurement processes in Ukraine by making bidding and decision-making available to the public, which reduces opportunities for rent-seeking.⁵⁹

Over the next four years, additional legislative and operational improvements were made to ProZorro, including integrating the role of tax authorities directly onto the platform to provide additional oversight for fraudulent pricing and hidden kickback schemes. By gaining private sector support early in its development, ProZorro was able to move the government’s IT infrastructure purchases onto a platform by 2019, which by then was facilitating $22 billion worth of tenders across the government.⁶⁰ In a sign of trust in the transparency and efficiency of ProZorro, the World Bank has also began conducting its own Ukrainian procurement through the platform.⁶¹

In 2022, the Computer Emergency Response Team of Ukraine (CERT) reported a total of 2,194 investigated malware attacks, twenty-five percent of which targeted government systems, with at least a dozen cases in which the malware was detected on critical infrastructure information systems.⁶² Nonetheless, the work of the CERT, bolstered by robust private sector partnerships with software developers, led to quick responses to patch identified vulnerabilities before malware could spread and result in significant network outages. The result of this new capacity has been the prevention of cyber-induced infrastructure outages such as the electric grid collapses that plagued Ukraine in 2015-2016.⁶³

In the years following the NotPetya attack, Ukrainian public and private organizations began addressing old debts to network software vendors while using the ProZorro platform for new IT procurement. As a result, the country’s state-owned critical infrastructure operators were forced to pursue open tenders on a public-private run platform while network software companies returned to selling licenses to the state enterprises. The author was told by senior officials at Ukraine’s State Special Communications Service (SSCS) that they estimated the share of pirated and unsupported software on the country’s networks had dropped from more than eighty percent at the start of the conflict with Russia in 2014 to only twenty percent in 2020.

While state enterprises have been required to make transparent software purchases since 2020, anti-corruption progress in the private sector is less certain. As part of the 2022 Russian cyberattacks on Ukraine, the Mandiant cybersecurity firm found that Russian military intelligence hackers likely uploaded “trojanized” versions of Microsoft software on torrent sites popular with Ukrainians.⁶⁴The malware was part of the Ukrainian language packs that, if selected, would perform reconnaissance on a system and install further malware as needed.

The commitment of state critical infrastructure in Ukraine to rapidly expand licensed software on their networks also drew the interest of large international software vendors that saw Ukraine as ground zero in identifying new malware.⁶⁵ Therefore, as Ukrainian public and private sector enterprises pursued legitimate purchases of licensed software, they also found that vendors were just as motivated to repair relationships with Ukraine’s large network operators. A benefit that few could have predicted in 2016 at the start of Ukraine’s anticorruption agenda is the role that the return of licensed software vendors would have in countering the much larger volume of cyberattacks that accompanied the 2022 Russian invasion. The major network software vendors, such as Microsoft and Cisco, established computer response and threat intelligence teams in Ukraine as part of their effort to identify and mitigate new threats to their licensed software before the malware targeting Ukraine could become a global problem.⁶⁶

The transformation of Ukrainian cybersecurity resilience over the five years between the last of the most harmful cyberattacks on the country (WannaCry and NotPetya) in 2017 and the resilience in the face of the relentless wave of malware attacks that accompanied Russia’s 2022 full-scale invasion suggests governments can proactively make progress against serious systemic vulnerabilities. Nonetheless, the anti-corruption approach must be relentless to succeed. For example, it was no surprise when in late 2023 national anti-corruption investigators uncovered a large IT software kickback where two senior SSCS officials had falsely categorized some procurement as classified, keeping it from being posted on the ProZorro site.⁶⁷

Overall, the Ukrainian experience suggests that countries burdened with systemic corruption should integrate procurement reform into their cybersecurity measures to mitigate the impact of cultures across the Global South that have promoted or looked the other way at the use of pirated or unsupported software.

Addressing corruption in cybersecurity strategies

The decision by a dozen of the world’s most influential institutions promoting international cybersecurity not to address the threat of systemic corruption in their 2018 Guide to Developing a National Cybersecurity Strategy continues to be echoed in advisory and technical assistance offered to countries in the Global South. A recent example is the removal of considerations for sectoral vulnerability to procurement corruption in the World Bank’s 2023 influential sectoral cyber capability maturity model (C2M2) assessment tool, which was originally present in the pioneering PRoGReSS sectoral C2M2 developed by Tel Aviv University that the assessment tool is based upon.⁶⁸

It is clear from the Ukrainian case study that neglecting issues of corruption in software procurement may result in overlooking an important lever for reducing overall cyber vulnerabilities. While officials in both the Global South and Global North tend to avoid public discussions of corruption, Ukraine’s IT procurement transparency reform offers cybersecurity policymakers a more targeted and politically acceptable policy goal. Certainly, the absence of guidance on IT procurement corruption is leaving cybersecurity strategists in countries challenged by systemic corruption without inspirational goals or advice on mitigating a key threat to their critical infrastructure networks.

As profiled in this analysis, Pakistan offers a cogent example of a country seeking to address its vulnerability to IT procurement corruption. Just two years after a Russian ransomware organization gained complete access to the revenue service’s new data center riddled with unsupported software, the Ministry of Foreign Affairs official responsible for cybersecurity championed the need to adopt national policies in line with the 2018 Guide to Developing a National Cybersecurity.⁶⁹ The Guide offers a robust set of recommendations and certainly should influence Pakistan’s implementation of its 2021 national cybersecurity strategy, but a government that witnessed first-hand how procurement corruption undermines critical infrastructure cybersecurity would also have benefited from the inclusion of guidance and materials on targeted procurement anticorruption measures—advice not found in the 2018 Guide.

The dramatic turnaround in the resilience of Ukrainian networks demonstrates the importance of cybersecurity strategies that include the adoption of external and transparent procurement platforms for critical infrastructure enterprise software and technology. As with any capacity-building measure, a cybersecurity anti-corruption initiative could start small as countries struggle to wrestle public procurement from rent-seeking interest groups. A national public tender system that covers all procurement, such as Ukraine’s ProZorro, is an ambitious goal that requires years to develop and operationalize. Nevertheless, national cybersecurity strategies could promote more limited platforms focused on critical infrastructure enterprise procurement from the handful of network software providers serving the market.

IT procurement reform success depends on the degree to which sectoral or national institutions introduce public-private collaboration, transparency, and autonomy into decision-making processes that currently happen in the backrooms of state bureaucracies. A failed approach was demonstrated in Kenya when the centralization of IT procurement within a single ministry led to the doubling or tripling of prices for key technologies negotiated by newly empowered senior officials.⁷⁰ Kenya’s cybersecurity strategists should be credited with seeking to address the vulnerabilities linked to IT procurement processes. Moreover, they were proposing solutions in a sphere (IT procurement reform) that international donors and cybersecurity consultants continue to avoid.

The most durable solution is for national cybersecurity strategies to begin to address procurement processes to remove the role of illicit rent-seekers in transactions. Kenya’s failed 2019 centralization of state IT procurement is an example of how many countries in the Global South have only adopted narrow measures limiting the impact of reform to just IT procurement. The next step would be to further limit that procurement to transparent and external electronic tender platforms modeled on Ukraine’s ProZorro system. The e-tender process would serve to transform the country’s critical infrastructure networks by shifting procurement to licensed and updated network software while attracting increased software vendor competition because sales revenues are no longer flowing back to rent-seeking IT administrators.

A shift in national cybersecurity strategies toward the adoption of e-tender platforms can be facilitated by the rapid growth in e-governance across the Global South. The first generation of e-tender platforms, like ProZorro, were “semi-distributed” to the degree that public and private entities supervise their analytical dashboards across the platform.⁷¹ The growing role of blockchain technology in creating transparent contracts across peer-to-peer networks will certainly transform the next generation of transparent procurement platforms.

Addressing IT procurement vulnerabilities can also build on existing resilience measures in national cybersecurity strategies. For example, cybersecurity awareness campaigns championed in existing national strategies can be leveraged to have a potential anti-corruption role. Their messaging could target not only individuals but also enterprises while highlighting the vulnerabilities that follow the choice to adopt pirated or other unsupported software. A generation of IT managers, who spent decades downloading pirated software for their personal use, must understand that those practices are no longer safe in the era of the ransomware gang and their recent turn toward targeting the Global South.

Another strategy that often is proposed as a cybersecurity solution for budget-constrained institutions in the Global South is open-source software (OSS). Paying for commercial software is not the only means to reduce the portion of pirated software on an enterprise’s network. OSS software has long been the building blocks of the world’s dominant network software sold by private vendors, and for more than two decades governments in the Global North have been adopting requirements mandating that officials first seek OSS alternatives before purchasing commercial software for their critical infrastructure networks.⁷² Nonetheless, malware has increasingly been targeting open-source solutions and a policy shift toward OSS in the Global South must be part of a wider government-led effort to recognize the need to support OSS as another element of critical infrastructure.⁷³

As countries continue to innovate in measures to raise transparency in the procurement of IT software and hardware, donors should reconsider their past hesitancy to advocate for anti-corruption measures as part of the cybersecurity strategies they support. The absence of even indirect references to the role of corruption in national cybersecurity strategies across the Global South is inexplicable given the serious cybersecurity risks that are present for countries standing up large information networks founded on pirated or unsupported software. Given the significant challenges developing countries face in responding to cyber threats, they cannot afford to simultaneously overlook the vulnerability associated with corrupt procurement practices.

Conclusion

Developing countries are continuing to make progress in digitizing governance and trade while simultaneously raising transparency in their public expenditures. Nevertheless, 2022’s country-wide network outages across the Global South suggest this capacity has been built on networks left vulnerable by unlicensed and unsupported software. As governments and critical infrastructure in the Global South prepare for the next stage in ICT development, they must prioritize policies that can reduce corruption in the critical procurement of the network software responsible for protecting their country’s nascent cyberspace. As Adam and Fazekos argue, reform-minded governments and donors throughout the Global South have adopted ICT practices in the fight against national corruption but have developed a blind spot to the role corruption plays in undermining the security of this rapid digitization.⁷⁴

Cybersecurity strategists working in the Global South must reevaluate a decade of national strategies that largely replicated those from the Global North. It is no longer safe to assume that cyber best practices are divorced from the harsh reality of addressing systemic corruption. At a minimum, national cybersecurity strategies must, for the first time, identify procurement corruption as a cybersecurity risk. Moreover, countries challenged by systemic corruption and under-resourced governance should consider more limited initiatives, such as creating transparent and autonomous IT tender processes for the most critical state sectors. The digital integration of the Global South offers its citizens greater prosperity and transparency in governance, but as decades of past economic development have demonstrated, the equity and reliability of this new revenue stream will depend on leaders not overlooking the adverse impact corruption can play in the social outcomes of their digital development.

About the author

Robert Peacock is a nonresident senior fellow at the Cyber Statecraft Initiative of the Atlantic Council’s Digital Forensic Research Lab, where his work builds on his past role supporting the highly correlated goals of reducing corruption in critical infrastructure procurement and developing cybersecurity resilience in the Global South. Peacock is Senior Strategic Technical Advisor at DAI Global advising on cybersecurity development programs, funded by the US Agency for International Development (USAID), across a half dozen countries in Eastern Europe and Eurasia. Peacock’s past advisory roles have included developing assistance programs in Armenia, Mozambique, Morocco, while more recently serving as a co-creator for USAID’s first bilateral cybersecurity program (Ukraine) and first regional cyber pathway for women program (Balkans).

The Atlantic Council’s Cyber Statecraft Initiative, part of the Atlantic Council Technology Programs, works at the nexus of geopolitics and cybersecurity to craft strategies to help shape the conduct of statecraft and to better inform and secure users of technology.

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1 Janosch Delcker, “Ransomware: Cyber criminals are coming for Global South,” Deutsch Welle, August 28, 2022, https://www.dw.com/en/ransomware-cyber-criminals-are-coming-for-the-global-south/a-62917234.

2 Although the term Global South is a preferred term for those nations most challenged in economic growth and good governance, there is no set definition of its membership. This policy brief defines the Global South not by geography or GNP, but rather by any country that is not one of the top 60 countries in Transparency International’s Global Corruption Perceptions Index (CPI). Therefore, geography is not the defining feature that explains why Uruguay (Latin America’s richest country and 14th ranked by the CPI index) is defined as Global North while Hungary is not.

3 Charlette Donalds, Corlane Barclay, and Kweku-Muata Osei-Bryson, Cybercrime and Cybersecurity in the Global South, (London: Taylor & Francis, Routledge, 2022).

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6 Nikhilesh De, “State of crypto: Ransomware is a crypto problem,” Coindesk, February 10, 2022, https://www.coindesk.com/policy/2021/06/08/state-of-crypto-ransomware-is-a-crypto-problem/.

7 Sheera Frenkel, “Hackers find ‘ideal testing ground’ for attacks: Developing countries” The New York Times, July 2, 2017, https://www.nytimes.com/2017/07/02/technology/hackers-find-ideal-testing-ground-for-attacks-developing-countries.html.

8 Jai Viljayan, “Majority of ransomware attacks last year exploited old bugs.,” Dark Reading, February 20, 2023, https://www.darkreading.com/cyberattacks-data-breaches/dozens-of-vulns-in-ransomware-attacks-offer-adversaries-full-kill-chain.

9 Paul Tassi, “Why Microsoft is giving away Windows 10 to Pirates,” Forbes, March 19, 2015, https://www.forbes.com/sites/insertcoin/2015/03/19/why-microsoft-is-giving-away-windows-10-to-pirates/?sh=51c6e4ae712f.

10 Victor DeMarines, “Look before you click: The risk of buying pirated software,” Revenera, January 17, 2020, https://www.revenera.com/blog/software-monetization/look-before-you-click-the-risk-of-buying-pirated-software/.

11 Sope Williams-Elegbe, “Systemic corruption and public procurement in developing countries: are there any solutions?,” Journal of Public Procurement (2018) vol. 18, no. 2, 131-147,  https://doi.org/10.1108/JOPP-06-2018-009.

12 “Global Cyberattacks Continue to Rise with Africa and APAC suffering most,” Checkpoint Research.

13 “Global Connectivity Report 2022, ITU, 2022, https://www.itu.int/itu-d/reports/statistics/global-connectivity-report-2022.

14 John Jack, “E-governance in Vanuatu: A whole-of-government approach,” Asia Pacific Journal of Public Administration (2018), https://www.tandfonline.com/doi/abs/10.1080/23276665.2018.1545354.

15 Valentina Rotondi, “Leveraging mobile phones to attain sustainable development,” Proceedings of the National Academy of Sciences, June 1, 2020, https://www.pnas.org/doi/full/10.1073/pnas.1909326117.

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17 Andrea Willige, “Here’s Why Africa is the World Leader in Digital and Mobile Banking,” World Economic Forum, November 21, 2023, https://www.weforum.org/agenda/2023/11/africa-digital-mobile-banking-financial-inclusion.

18 Raif Bahrini and Alaa A. Qaffas, “Impact of information and communication technology on economic growth.”

19 Laura Wood, “The future of African fiber markets 2023,” BusinessWire, June 15, 2023, https://www.tandfonline.com/doi/abs/10.1080/23276665.2018.1545354.

20 Extending Reach and Increasing Impact: Information and Communications for Development, World Bank, 2009, https://documents1.worldbank.org/curated/en/645821468337815208/pdf/487910PUB0EPI1101Official0
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21 Ankit Fadia, Mahir Nayfeh, and John Noble, “Follow the leaders: How governments can combat intensifying cybersecurity risks,” McKinsey & Company, September 16, 2020, https://www.mckinsey.com/industries/public-and-social-sector/our-insights/follow-the-leaders-how-governments-can-combat-intensifying-cybersecurity-risks.

22 Temitaya Jalyeola, “73% Africans in rural areas lack internet access,” Punch, December 19, 2022, https://punchng.com/73-africans-in-rural-areas-lack-internet-access.

23 World Bank Data – Vanuatu, The World Bank, 2020, https://data.worldbank.org/country/VU.

24 Jason Rainbow, “Starlink approved in Nigeria and Mozambique, says Elon Musk,” Spacenews, May 27, 2022, https://spacenews.com/starlink-approved-in-nigeria-and-mozambique-says-elon-musk/.

25 Jens Ivo Engels, “Corruption and anticorruption in the era of modernity and beyond” in Ronald Kroeze, Andre Vitoria, G. Geltner (Eds.), Anticorruption in History, (Oxford: Oxford University Press, 2018).

26 Sandipto Dasgupta, “The power of corruption,” Comparative Studies of South Asia, Africa, and the Middle East (2019), vol. 29, no. 3, https://doi.org/10.1215/1089201X-7885524.

27 Dante Deo, “Mega millions lost to software procurement fraud and error,” ITWeb, May 9, 2023, https://www.itweb.co.za/article/mega-millions-lost-to-software-procurement-fraud-and-error/KBpdg7pmNKjMLEew.

28 Jonathan Klaaren et al., “Public Procurement and Corruption in South Africa,” Public Affairs Research Institute, October 2022, https://ideas.repec.org/p/osf/osfxxx/bej9z.html.

29 Rajeev K. Goel and Michael A. Nelson, “Determinants of software piracy: economics, institutions, and technology,” Journal of Technology Transformation (2009), 34, https://link.springer.com/article/10.1007/s10961-009-9119-1.

30 “Software Management: Security Imperative, Business Opportunity,” Business Software Alliance, June 2018, https://www.bsa.org/files/2019-02/2018_BSA_GSS_Report_en_.pdf.

31 Brian Prince, “Software piracy costly to enterprise security, research finds,” Security Week, March 20, 2014, https://www.securityweek.com/software-piracy-costly-enterprise-security-research-finds/.

32 “Drivers of Corruption: A Brief Review,” The World Bank, 2014, https://documents1.worldbank.org/curated/en/808821468180242148/text/Drivers-of-corruption.txt.

33 David P. Nolan, “Procurement fraud – an old fraud flourishing in emerging markets and costing businesses billions,” Financier Worldwide Magazine, September 2017, https://www.financierworldwide.com/procurement-fraud-an-old-fraud-flourishing-in-emerging-markets-and-costing-businesses-billions#.Y-jdcC-B3X8.

34 w.scmagazine.com/news/losses-from-software-piracy-exceed-51-billion-in-2009.

35 Atanu Lahiri, “Revisiting the incentive to tolerate illegal distribution of software products,” Decision Support Systems (2012), vol. 52, no. 2, 2012, https://doi.org/10.1016/j.dss.2012.01.007.

36 Peerayuth Charoensukmongkol et al., “Analyzing software piracy from supply and demand factors: The competing roles of corruption and economic wealth,” International Journal of Technoethics (2012), vol. 3 no. 1, https://econpapers.repec.org/article/iggjt0000/v_3a3_3ay_3a2012_3ai_3a1_3ap_3a28-42.htmhttps://econpapers.repec.org/article/iggjt0000/v_3a3_3ay_3a2012_3ai_3a1_3ap_3a28-42.htm.

37 Antonio R. Andres and Simplice A. Asongu, “Fighting software piracy: Which governance tools matter in Africa?” Journal of Business Ethics (2013), 118, https://www.econstor.eu/bitstream/10419/87824/1/730896803.pdf.

38 Rana Shahbaz, “Neglect caused FBR cyber-attack,” The Express Tribune, August 22, 2021, https://tribune.com.pk/story/2316604/neglect-caused-fbr-cyber-attack.

39 Jehangir Nasir, “US accuses FBR of using pirated software,” ProPakistani. January 30, 2020, https://propakistani.pk/2020/01/30/us-accuses-fbr-of-using-pirated-software-report.

40 Haroon Hayder, “Here’s the real reason why FBR system got hacked,” ProPakistani, August 20, 2021, https://propakistani.pk/2021/08/20/heres-the-real-reason-why-fbrs-system-got-hacked/.

41 Cynthia Brumfield, “2022 was the year of crippling ransomware attacks on small countries,” README Blog, December 16, 2022, https://readme.security/2022-was-the-year-of-crippling-ransomware-attacks-on-small-countries-e63b5bc3b756.

42 “Microsoft investigates Iranian attacks against the Albanian Government,” Microsoft, September 8, 2022, https://www.microsoft.com/en-us/security/blog/2022/09/08/microsoft-investigates-iranian-attacks-against-the-albanian-government.

43 Christopher Cottrell, “Vanuatu officials turn to phone books and typewriters, one month after cyberattack,” The Guardian, November 29, 2022, https://www.theguardian.com/world/2022/nov/29/vanuatu-officials-turn-to-phone-books-and-typewriters-one-month-after-cyber-attack.

44 Matt Burgess, “Conti’s attack against Costa Rica sparks a new ransomware era, Wired, June 12, 2022, https://www.wired.co.uk/article/costa-rica-ransomware-conti.

45 Andy Greenberg, “Ransomware payments hit a record $1.1 billion in 2023,” Wired, February 7, 2024, https://www.wired.com/story/ransomware-payments-2023-breaks-record.

46 Bill Toulas, “Ransomware payments drop to record low as victims refuse to pay,” Bleeping Computer, January 29, 2024, https://www.bleepingcomputer.com/news/security/ransomware-payments-drop-to-record-low-as-victims-refuse-to-pay/.

47 The review of 23 national cybersecurity strategies consisted of 14 documents published by countries in Africa (Botswana, Benin, Burkina Faso, Gambia, Ghana, Kenya [draft], Malawi, Mauritius, Mozambique [draft], Nigeria, Sierra Leone, South Africa, Tanzania, and Uganda); and 9 documents published by countries in the Asia-Pacific region (Afghanistan, Bangladesh, China, India, Malaysia, Nepal [draft], Philippines, Samoa, and Vanuatu).

48 The International Telecommunication Union (ITU), The World Bank, Commonwealth Secretariat (ComSec), the Commonwealth Telecommunications Organisation (CTO), NATO Cooperative Cyber Defence Centre of Excellence (NATO CCD COE). 2018. Guide to Developing a National Cybersecurity Strategy – Strategic engagement in cybersecurity. Creative Commons Attribution 3.0 IGO (CC BY 3.0 IGO). https://www.itu.int/hub/publication/d-str-cyb_guide-01-2018/.

49 Michael Hill, “Governments should not pay ransoms, International Counter Ransomware initiative members agree,” CSO, November 2, 2023, https://www.csoonline.com/article/657877/governments-should-not-pay-ransoms-international-counter-ransomware-initiative-members-agree.html.

50 “International Counter Ransomware Initiative Joint Statement,” The White House, November 1, 2023, https://www.whitehouse.gov/briefing-room/statements-releases/2023/11/01/international-counter-ransomware-initiative-2023-joint-statement.

51 Olena Removska and Robert Coalson, “Ukraine’s trade privileges on line over intellectual piracy concerns,” Radio Free/Radio Liberty, March 14, 2013, https://www.rferl.org/a/ukraine-sanctions-intellectual-property/24928537.html.

52 “Software management: Security Imperative, Business Opportunity,” Business Software Alliance.

53 Patrick Tucker, “Russia launched cyberattacks against Ukraine before ship seizures,” Defense One, December 7, 2018, https://www.defenseone.com/technology/2018/12/russia-launched-cyber-attacks-against-ukraine-ship-seizures-firm-says/153375/.

54 Mark Temnycky, “Russian Cyber Threat: US Can Learn from Ukraine,” Atlantic Council, May 27, 2021, https://www.atlanticcouncil.org/blogs/ukrainealert/russian-cyber-threat-us-can-learn-from-ukraine.

55 Olena Removska and Robert Coalson, “Ukraine’s trade privileges on line over intellectual piracy concerns.”

56 Andy Greenberg, “The untold story of NotPetya, the most devastating cyberattack in history,” Wired, August 22, 2018, https://www.wired.com/story/notpetya-cyberattack-ukraine-russia-code-crashed-the-world/.

57 “Anti-Corruption Reforms in Ukraine: Pilot 5^th Round of Monitoring Under the OECD Istanbul Anti-Corruption Action Plan,” OECD, 2022. https://www.oecd-ilibrary.org/docserver/b1901b8c-en.pdf?expires=1707274542&id=id&accname=guest&checksum=E8B9D84D2CAB41F47CCF08E6A475AB17.

58 Christopher Yukins and Steven Kelman, “Overcoming corruption and war: Lessons from Ukraine’s ProZorro procurement system,” NCMA Contract Management Magazine, July 2022, https://www.hks.harvard.edu/publications/overcoming-corruption-and-war-lessons-ukraines-prozorro-procurement-system.

59 Andre Petheram, Walter Pasquarelli, and Richard Stirling, “The next generation of anti-corruption tools: Big data, open data, and artificial intelligence,” Oxford Insights, 2022, https://ec.europa.eu/futurium/en/system/files/ged/researchreport2019_thenextgenerationofanti-corruptiontools_bigdataopendataartificialintelligence.pdf.

60 “Guidelines for non-Ukrainian suppliers on participation in public procurement tenders in Ukrainian,” European Bank for Reconstruction and Development, November 2020, https://infobox.prozorro.org/upload/files/main/1398/547/gpa-guide-ukraine-fin-update2020-2.pdf.

61 Nataliya Synyutka, Oksana Kurylo, and Mariya Bondarchuk, “Digitalization of public procurement: The case study of Ukraine,” Annales Oeconomia (2019), https://journals.umcs.pl/h/article/viewFile/9273/6961.

62 “In 2022, CERT-UA reports 2,194 cyberattacks,” Ukraine Media Center, January 17, 2023, https://mediacenter.org.ua/in-2022-cert-ua-reports-2-194-cyberattacks-a-quarter-of-them-against-government-agencies-state-service-for-special-communications/.

63 Jon Bateman, “Russia’s wartime cyber operations in Ukraine: Military impacts, influences, and implications,” Carnegie Endowment for International Peace, 2022, https://carnegie-production-assets.s3.amazonaws.com/static/files/Bateman_Cyber-FINAL21.pdf.

64 “Trojanized Windows 10 Operating System Installers Targeted Ukrainian Government,” Mandiant Intelligence, “December 15, 2022, https://cloud.google.com/blog/topics/threat-intelligence/trojanized-windows-installers-ukrainian-government/.

65 Emma Schroeder and Sean Dack, “A parallel terrain: Public-private defense of the Ukrainian information environment,” Atlantic Council, February 27, 2023, https://www.atlanticcouncil.org/in-depth-research-reports/report/a-parallel-terrain-public-private-defense-of-the-ukrainian-information-environment.

66 Robert Peacock, “How Ukraine has defended itself against cyberattack – Lessons for the US,” The Conversation, April 5, 2022, https://theconversation.com/how-ukraine-has-defended-itself-against-cyberattacks-lessons-for-the-us-180085.

67 Daryna Antoniuk, “Second top Ukrainian cyber official arrested amid corruption probe,” The Record, November 27, 2023, https://therecord.media/second-cyber-official-detained-zhora.

68 “Sectoral Cybersecurity Maturity Model,” The World Bank, June 2023, https://documents1.worldbank.org/curated/en/099062623085028392/pdf/P17263707c36b702309f7303dbb7266e1cf.pdf.

69 Shahrukh Khan, “Cybersecurity Challenges in Pakistan: An Assessment,” Science Diplomacy, March 2022, https://www.researchgate.net/publication/360256123_Cyber_Security_Challenges_in_Pakistan_An_Assessment.

70 Wanjohi Githae, “Concern over graft as state centralizes IT procurement,” Nation. January 12, 2019, https://nation.africa/kenya/news/concern-over-graft-as-state-centralises-it-procurement–127312.

71 Pedro Bustamante, et al., “Government by code? Blockchain applications to public sector governance,” Frontiers in Blockchain (2022), vol. 5, https://doi.org/10.3389/fbloc.2022.869665.

72 Benjamin J. Birkinbine, Incorporating the Digital Commons: Corporate Involvement in Free and Open Source Software, (London: University of Westminster Press, 2020), https://library.oapen.org/bitstream/handle/20.500.12657/37226/1/incorporating-the-digital-commons.pdf.

73 Stewart Scott, et al., “Avoiding the success trap: Toward policy for open-source software as infrastructure,” Atlantic Council, August 8, 2023, https://www.atlanticcouncil.org/in-depth-research-reports/report/open-source-software-as-infrastructure/.

74 Isabelle Adam and Mihaly Fazekas, “Are emerging technologies helping win the fight against corruption? A review of the state of the evidence,” Information Economics and Policy (2021), vol. 57, December 2021, https://www.sciencedirect.com/science/article/pii/S016762452100038X.

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Women should play a central role in rebuilding Ukraine’s economy

Melanne Verveer and Kimberly Donovan — Fri, 14 Jun 2024 17:43:18 +0000

This week, the German and Ukrainian governments hosted the third Ukraine recovery conference in Berlin to encourage private investment in Ukraine and to “build forward” with innovation. Unlike the earlier recovery conferences, this summit prioritized the inclusion of women and civil society and resulted in the first gender equality deliverable: the Alliance for a Gender-Responsive and Inclusive Recovery for Ukraine. This group brings together governments, private sector and civil society partners, and United Nations agencies to improve funding and financing for gender equality in Ukraine’s recovery. If done right, leveraging the potential of Ukrainian women in Ukraine’s reconstruction can help lay the groundwork for a sustainable recovery that truly “builds forward.”

Women and civil society are indispensable as first responders in the ongoing war. They must also be central to the planning, distribution, and oversight of funds in reconstruction efforts. As the German and Ukrainian governments recognized, the physical reconstruction of Ukraine needs to be paired with a comprehensive social, human-centered recovery. Women, who represent the majority of the highly educated and skilled workforce in Ukraine, are well-positioned to strengthen anti-corruption measures, modernize the energy sector, and drive Ukraine’s reform agenda. All of these components are essential for an effective recovery. In addition, these efforts can help Ukraine meet the conditions for its accession to the European Union (EU).

The record to date for women’s inclusion in recovery efforts has not been what it needs to be. Policymakers must continue to ensure that Ukrainian women leaders will have the opportunity to meaningfully and fully participate in Ukraine’s recovery. Ukraine can only recover if women and civil society are fully involved in its reconstruction.

Where do women fit in the Ukraine recovery agenda?

Held in Lugano, Switzerland, in July 2022, the first recovery conference resulted in the adoption of the “Lugano Declaration,” which includes guiding principles for Ukraine’s recovery process. At the 2023 conference in London, the EU announced the creation of a new Ukrainian facility that would provide a total of fifty billion euros to Ukraine over four years. From this total amount, thirty-nine billion euros will be allocated to the state budget to support macroeconomic stability. Another eight billion euros will go toward a special investment instrument that will cover risks in priority sectors. This year’s conference in Berlin aimed to attract private-sector investment in Ukraine, including in human capital. The agenda included the explicit goal of investing in women and youth. This was a positive development and should encourage international financial institutions and private donors to continue to invest in women-owned and -led businesses in Ukraine, as well as to train Ukrainian women to take on jobs in Ukraine’s critical sectors.

How to unleash Ukrainian women’s economic potential

Invest, train, and enable Ukrainian women. Women in Ukraine and elsewhere have traditionally had limited access to credit, markets, and training opportunities. They have also struggled to balance responsibilities in the workplace and their primary caregiver responsibilities. These challenges must be overcome if women are to fulfill their economic potential.

The World Economic Forum notes that one solution for improving women’s access to credit is to not necessarily demand collateral, because women often do not own private property. Moreover, many women (as well as men) in Ukraine have lost their homes and properties to the war, so providing property as collateral is not likely to be an option for them. Therefore, adopting alternative ways to determine women’s creditworthiness could encourage more women to apply for business loans.

Ukrainian women, with the support of Western companies and institutions, have already stepped up to launch their own startups. These should be scaled up. Since the start of Russia’s invasion, an increasing number of Ukrainian women have founded tech startups, benefitting from improved access to investors outside Ukraine, as well as programs sponsored by the EU, international organizations, and private companies. For example, VISA launched its “She’s Next” program in Ukraine in 2020, and it has since hosted gatherings where Ukrainian women presented their business proposals and received funding and training at business schools. More Western companies should team up with women-led Ukrainian nonprofits to create opportunities for funding female-led startups and give them access to education and training.

Train Ukrainian women to fill workforce gaps in critical sectors. Now is an important time to train Ukrainian women in two critical sectors that will play a key role in rebuilding Ukraine’s economy: finance and cybersecurity. Ukraine has consistently ranked as one of the most corrupt countries in Europe in Transparency International’s global Corruption Perceptions Index. Although Ukraine has made significant progress in the fight against corruption since 2014, it remains a problem and a concern for the United States and other foreign partners. The cost of complete reconstruction is currently estimated to be around $750 billion, but international donors are concerned about the potential misappropriation of funds put toward reconstruction.

Reform of its financial sector is essential for Ukraine to secure financial aid for reconstruction, as well as to meet the requirements for joining the EU. The urgent need for financial system reform coincides with women playing a much larger role in the financial system, both within the government and private sector. By transferring the knowledge of, for example, the best anti-money laundering (AML) practices to Ukrainian women, the West would create a generation of AML experts in Ukraine who are capable of detecting suspicious money flows and preventing corruption and money laundering within the Ukrainian financial system.

At the same time, equipping Ukrainian women with cybersecurity skills would help them defend Ukrainian banks and the financial system from Russian intrusions. Ukrainian banks were one of the primary targets of the cyberattacks that Russia initiated right before launching its full-scale invasion of Ukraine in February 2022. More recently, at the end of 2023, Monobank, one of the largest Ukrainian banks, reported a massive hacker attack. While the bank has not publicly attributed this attack to any specific threat actor, Russia has been suspected due to its history of backing cybercrime groups attacking Ukraine. The persistent threat of Russian cyberattacks against Ukrainian banks should be countered by training Ukrainian women in cybersecurity and digital forensics.

Ukraine’s partners and allies can learn from and build on existing work to train Ukrainian women in cybersecurity. For example, the United Nations Institute for Training and Research organized a project that trained Ukrainian women evacuees in Poland in cybersecurity and data analytics. The project was held from October 2023 to March 2024 and was funded by the government and people of Japan. Private companies have also launched similar initiatives. For example, Microsoft is working with nonprofit organizations in Poland to train Ukrainian women refugees to enter the workforce in cybersecurity. Such projects need to expand to include more partners and reach more Ukrainian women.

Investing in Ukrainian women is smart economics

Leveraging Ukraine recovery conferences and other global convenings to encourage Western investment in Ukrainian women corresponds with the United States’ existing strategy of providing economic incentives to allies—also known as positive economic statecraft. The EU, United Kingdom, and other Group of Seven (G7) members are already heavily invested in Ukraine’s success. Directing investment toward the female workforce will strengthen an already existing strategy of ensuring Ukraine has the resources to minimize economic dependence on Russia. Investment in Ukrainian women will create a multiplier effect for the economy. It is well-known that women often spend their income on education, healthcare, and nutrition—all of which raise the standard of living. This is a force that moves economies forward but is often sidelined.

Finally, Ukrainian women can fill in global workforce gaps, too. Training Ukrainian women in cybersecurity would help address the global cybersecurity skills crisis. Private companies and policymakers often note that the world does not have enough cybersecurity professionals. Meanwhile, Ukraine has a highly educated population, especially in technical subjects. Cyber-trained Ukrainian women could defend not only Ukrainian banks but also businesses and governments around the world.

As policymakers and private sector actors adopt strategies for Ukraine’s reconstruction, it is crucial that they fully leverage the potential of Ukrainian women and help establish the groundwork for an inclusive and sustainable recovery.

Melanne Verveer is the executive director of the Georgetown Institute for Women, Peace and Security and a former United States ambassador-at-large for global women’s issues at the US Department of State.

Kimberly Donovan is the director of the Economic Statecraft Initiative at the Atlantic Council’s GeoEconomics Center and a former senior US Treasury official.

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ISIS fell, but the conditions that created the terrorist group still exist in Iraq

Abbas Kadhim — Mon, 10 Jun 2024 16:07:33 +0000

Its 2014 general elections were lauded as proof of Iraq’s dedication to the democratization process initiated after the 2003 US invasion, marking another milestone on the road to consolidating democracy. The two-term prime minister, Nouri al-Maliki, came to the negotiating table armed with a landslide electoral mandate. He also had some major achievements during his eight years in office, including the trial, conviction, and execution of dictator Saddam Hussein and the negotiated 2011 withdrawal of US forces that restored full Iraqi sovereignty. However, Prime Minister Maliki lacked popularity where it mattered: the political elite, who decided the post-election phase and did not favor giving him a third term in office.

While all eyes were on the government-formation disputes, a terrorist group calling itself the Islamic State of Iraq and al-Sham (ISIS) raided the city of Mosul in Nineveh province on June 10, 2014. It captured the entire territory in a matter of hours, with a brazen goal of establishing an Islamist caliphate that included Iraq, Syria, and eventually the entire region, and ruling under its version of Islam. The complete meltdown of three divisions of the Iraqi Army emboldened the terrorists and allowed them to take most of Salahuddin province. With most of Anbar province already in its hands since January 2014, ISIS secured complete control over one-third of Iraq’s territory within a few days.

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The Iraqi government became paralyzed by the lack of progress in the post-election political negotiations, the continued meltdown of the armed forces, and the lack of military support from the international community. On June 13, 2014, as ISIS was about to close in on Baghdad, Grand Ayatollah Ali al-Sistani, the highest Shia religious scholar, issued a rare fatwa calling on Iraqi “citizens to defend the country, its people, the honor of its citizens, and its sacred places.” Tens of thousands volunteered to defend the country and help the government fight the most existential threat Iraq faced since its founding in 1920.

Fighting and defeating ISIS was one of the most important accomplishments of the Iraqi population, showcasing the resilience of people who stood up for their national dignity and defended their liberty at a time when no one else was ready or willing to defend them, including their government. Although other countries were involved—Iran supplied weapons to Baghdad shortly after the ISIS invasion, and the United States formed a coalition to provide advice, logistics, and air support starting in August 2014—none of these efforts would have mattered if Iraqis had not risen to defend their nascent, albeit flawed and uncertain, democracy.

Had Iraqis given up in the critical moments after June 10, 2014, as their armed forces had, their democratic dreams would have witnessed a catastrophic end much like what occurred in Afghanistan under similar circumstances in 2021. Self-organized ordinary Iraqis refused to see their country delivered to a terrorist organization or leave themselves at the mercy of religious extremists. Their acts of valor in the early days of the crisis restored morale to the Iraqi armed forces and revived the international community’s faith in the future of Iraq. What followed was a matter of time to plan and manage the battle of liberating the territories that ISIS captured and stop its rule of systemic civilian oppression and mass murder.

In the years following the 2017 defeat of ISIS, Iraq has progressed positively despite serious challenges. Having endured the painful lessons of 2014, it reorganized its armed forces to prevent a similar security collapse. Those forces stand today among the most confident and combat ready in the region, and some of their components, such as the counterterrorism force, perform at par with elite international peers. Iraqi leaders and their counterparts in allied countries, the United States in particular, have gained confidence in the efficiency and performance of the Iraqi armed forces, prompting discussions to transition the Global Coalition To Defeat ISIS, which is led by the United States and includes eighty-four other nations, into bilateral agreements between Iraq and coalition members, focusing on continued security cooperation and capacity building for the Iraqi security forces.

In January, Iraqi Prime Minister Mohammed Shia al-Sudani announced “the commencement of the first round of bilateral dialogue between Iraq and the United States of America to end the mission of the Coalition in Iraq.” The Iraqi government also requested that the United Nations Security Council (UNSC) terminate the United Nations Assistance Mission for Iraq (UNAMI) mandate by the end of 2025, arguing that Iraq now has mature institutions to cooperate directly with international organizations like other nations do. On May 31, the UNSC voted unanimously to approve the Iraqi request. The Iraqi government described these developments as the end of contingency relations and the inauguration of a new era of normal cooperation with the international community while leaving internal Iraqi governance to its institutions, which have acquired adequate maturity and competence.

What Iraq needs to ensure its success on the path of security and self-governance is to tackle the two most pressing challenges: economic uncertainty and corruption. Iraq continues to depend on a rentier economy, fully dependent on oil revenues, which fall short of supporting the governmental operational cost or leaving extra funds to invest in building a robust economy. Iraq’s only way out of the current economic quagmire is a diversified economy that encourages investment and a private sector. The Iraqi government must move away from the old philosophy and practice of a state-controlled economy to a new direction where its role is to create a healthy environment in which private businesses can thrive. In contrast, the Iraqi government is a regulator in most sectors where governments have not traditionally performed adequately.

The same attention needs to be given to the malignant threat of corruption.

After two decades of political change, the Iraqi political elites have coexisted with a deeply entrenched culture of corruption, and many high-level officials have contributed to it. Normalized and systemic financial, political, and administrative corruption has denied the Iraqi people the opportunity to build a functional state and heal a society that was traumatized by five decades of wars, international economic sanctions, and terrorism. Efforts to combat corruption continue to be limited in scope and target only insignificant perpetrators. To secure a permanent defeat of ISIS and prevent its return, or the emergence of a similar threat, it is important to eliminate conditions that helped such a group thrive to begin with. The pervasive culture of corruption and a poor economy have been among the leading conditions that contributed to the rise of ISIS in Iraq. Now is the time to address those conditions.

Dr. Abbas Kadhim is director of the Atlantic Council’s Iraq Initiative. Follow him on X: @DrAbbasKadhim.

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In a Congolese mining case, Biden can secure a win for US sanctions policy in Africa

Benjamin Mossberg — Mon, 03 Jun 2024 17:32:05 +0000

At the intersection of core US interests in accessing critical minerals, diversifying supply chains, improving human rights, and spurring economic growth sits the thorny case of Dan Gertler. The Biden administration has begun considering easing sanctions on Gertler, an Israeli billionaire businessman, with the offer on the table reportedly allowing the mining executive to sell his holdings in copper and cobalt mines in the Democratic Republic of the Congo (DRC). If it follows through on this move, Washington has the opportunity to show that its sanctions policy toward Africa can be effective.

In 2017, the Trump administration imposed sanctions on Gertler, accusing him of “opaque and corrupt mining and oil deals” that cost the DRC more than $1.36 billion in revenues from 2010 to 2012 alone. Gertler has repeatedly denied any wrongdoing and, through a representative, said that he would abide by sanctions. The news that the Biden administration may ease these sanctions should be viewed positively, as an indication that US sanctions can achieve both economic and geopolitical goals.

Eased sanctions, whether a formal delisting or the issuing of a general license to Gertler, would allow for the sale of currently sanctioned entities. Following the easing of sanctions in this case, US firms could gain access to new investment opportunities by investing in mining projects that currently have links to Gertler, leading to economic growth in the United States and the DRC. In addition, the DRC has an opportunity to showcase the improvements that the country is making in the fight against money laundering and terrorist financing. While some senior officials, human-rights defenders, and anticorruption fighters have valid concerns about easing sanctions on Gertler, the decision could be a win for the DRC and the United States.

The choice—and the history behind it

Both the Trump and Biden administrations have gone back and forth over the tightening and easing of sanctions on Gertler. That has drawn much attention, but what hasn’t is the fact that the United States has quietly used sanctions effectively in this case to get its way.

In 2019, The Sentry—an investigative organization that aims to hold to account predatory networks that benefit from violent conflict, repression, and kleptocracy—conducted a six-month-long study on the effectiveness of sanctions in Africa in the twenty-first century. The study found that better strategies for achieving identified goals in each sanctions program must be developed if sanctions effectiveness was to improve. The Sentry study set the stage for the Treasury 2021 Sanctions Review, which drew conclusions on how to modernize US sanctions and make them more effective. Treasury recommended a “structured policy framework” that “links sanctions to a clear policy objective.” The Biden administration has made no secret of its desire to improve access to critical minerals, diversify its supply chains, and work with US partners to achieve those goals. Since 80 percent of the DRC’s cobalt output is owned by Chinese companies, US policymakers should be seeking ways to reduce barriers to entry in the DRC’s mining sector and to actively promote investment there.

As the United States seeks to gain greater access to critical minerals and diversify its supply chains away from Chinese influence, Biden administration officials hope that granting Gertler a general license to sell his holdings in the DRC would increase US or Western firms’ willingness to invest in the country. That’s because those firms have been largely boxed out as Gertler, according to the US Treasury, used his closeness with government officials to secure below-market rates for mining concessions for his companies. Beyond Gertler, the business environment of the DRC ranks 183 out of 190 on the World Bank’s Doing Business indicators. Easing sanctions, through a coordinated US government effort that seeks to maximize this move, could send an important signal to Western investors that the DRC is open for business. Western firms could lift their bottom lines while stimulating the DRC economy by paying market rates.

The potential delisting of Gertler and his companies is a good example of an instance in which sanctions—or, in this case, the easing of sanctions—are being used in support of a specific policy objective.

Delisting would be good—but more must be done

Building on a potential delisting, the Biden administration should work with Congress to expeditiously pass the bipartisan BRIDGE to DRC Act—which helps the United States secure access to critical-mineral supply chains and sets human-rights and democracy benchmarks for strengthening the US-DRC relationship. These moves could be further timed or calculated to magnify the impact of ongoing foreign assistance programs led by the United States Agency for International Development or other US government agencies.

The United States should coordinate additional moves to support the DRC. In October 2022, the Financial Action Task Force, the standard-setting international organization that seeks to strengthen the global financial system, placed the DRC on its list of jurisdictions under increased monitoring—also known as the “grey list”—for the country’s dismal record in fighting money laundering and terrorist financing. While many African countries are on the grey list, the impact is considerable, as it limits capital inflows, makes investors wary of doing business, and leads to reputational damage and a reduction of correspondent banking relationships, among other consequences. The US Treasury should look to bolster the DRC government’s approach to anti-money laundering and combating the financing of terrorism (AML/CFT) by equipping the country with the knowledge, know-how, and capacity that it needs.

Regardless of whether the delisting happens or whether the BRIDGE Act becomes law, the DRC must do more to help itself. News of a failed coup attempt in Kinshasa on May 19 certainly does not help, especially since—according to local reports—the assailants were linked to exiled DRC politician and US citizen Christian Malanga, who was killed by the country’s security forces in a firefight. Three US nationals were allegedly also involved in the attempt to overthrow the government of President Felix Tshisekedi.

The DRC must continue to take concrete steps to improve the business environment and reduce its political and economic risk factors. Since 2022, the DRC built on its high-level political commitments to improve its AML/CFT regime, finalize its three-year national AML/CFT strategy, and improve its macroeconomic performance—boosting its credit rating. The DRC has an opportunity to continue to make progress in its fight against corruption, money laundering, and terrorist financing that threaten the stability of the country from Matadi on the Atlantic seaboard to Goma in the Great Rift Valley.

A win in the heart of Africa

Delisting Gertler would not only help the United States get its way, but it would show that its sanctions policy in Africa can be effective; its industrial and national security policies can be successfully implemented; and that all of this can be done in a manner that can help an African partner generate greater economic growth, jobs, and the foreign investment it seeks.

The United States can’t do it alone. It must also partner with the DRC in a serious manner to help strengthen the DRC’s framework to combat money laundering and terrorist financing, improve Kinshasa’s image, and reduce barriers to investment such as perceived political and economic risk.

The DRC occupies a central role on the African continent and with its economic potential could serve as a future hub for transportation, logistics, mineral processing, and more. If the DRC wins, all of Africa benefits—as do the United States and the West.

Benjamin Mossberg is the deputy director of the Atlantic Council’s Africa Center. He previously served in the US Treasury Department and US State Department with a focus on Africa policy.

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Warrick quoted in The Latin Times on Border Patrol ties with local businesses

Atlantic Council — Tue, 28 May 2024 19:46:27 +0000

Original Source

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#BalkansDebrief – What is the US role amidst fragility in the Western Balkans? | A debrief with Gabriel Escobar

sjones — Mon, 20 May 2024 16:42:49 +0000

IN THIS EPISODE

The Western Balkans stand at a pivotal moment. Regional stability, security, and prosperity require a more robust US engagement. EU accession remains the goal but simmering ethnic tensions and resurgent nationalism demand a comprehensive US strategy that includes specific and actionable commitments.

In the light of Russia’s brutal invasion of Ukraine that has shaken European security foundations, how can the US enhance its collaboration with the EU to develop a unified approach regarding the future of the Western Balkans?

Ilva Tare, Nonresident Senior Fellow at the Atlantic Council’s Europe Center, discusses with outgoing US Deputy Assistant Secretary and Special Representative for the Western Balkans Gabriel Escobar, at the end of his term, the most pressing issues for the region’s EU prospects, the challenges with corruption and economic growth, and the main concerns for increased tension and risks for stability.

Tare asks DAS Escobar if prioritizing the Association of Serb-Majority Municipalities on the normalization dialogue between Kosovo and Serbia was the most effective strategy, and what is the path forward on this issue?

Is the US considering alternative approaches towards Serbia to achieve progress on EU alignment, especially after the composition of the new government?

Can the US prevent a fracturing of the fragile peace in Bosnia and Herzegovina?

How concerning is Russian influence in the Western Balkans? Specific questions on Montenegro, North Macedonia and Albania will also be covered in this #BalkansDebrief episode.

ABOUT #BALKANSDEBRIEF

#BalkansDebrief is an online interview series presented by the Atlantic Council’s Europe Center and hosted by journalist Ilva Tare. The program offers a fresh look at the Western Balkans and examines the region’s people, culture, challenges, and opportunities.

Watch #BalkansDebrief on YouTube and listen to it as a Podcast.

Explore the #BALKANSDEBRIEF series

SUBSCRIBE TO #BALKANSdebrief

listen to #bALKANSDEBRIEF as a podcast

MEET THE #BALKANSDEBRIEF HOST

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Ilva Tare

Resident Senior Fellow

Europe Center

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The Europe Center promotes leadership, strategies, and analysis to ensure a strong, ambitious, and forward-looking transatlantic relationship.

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‘There are Evans everywhere’

Frederick Kempe — Sat, 18 May 2024 13:25:03 +0000

It’s a bad time for press freedom—which underscores that it unfortunately also is a very good time for the type of autocracies that are most determined to douse free speech.

So, it was a poignant moment at the PEN America Literary Gala, which I attended Thursday evening in New York, when Almar Latour, Dow Jones CEO and Wall Street Journal publisher, spoke about how the long-sought release of his reporter Evan Gershkovich from Russia’s dreaded Lefortovo Prison matters “on a macro level.”

“The grim reality is that there are Evans everywhere,” said Latour, who is also an Atlantic Council board member. “Journalists around the world face increasing resistance and hostility for just trying to do their jobs.”

More than a hundred journalists and photojournalists were killed in the past year, mostly in Gaza and Ukraine, and more than three hundred others were imprisoned for their work by one autocratic regime or another. Through our “Reporters at Risk” events, the Atlantic Council has worked to raise these issues for policymakers and the public. So too has Latour, who listed the names of many of the journalists behind bars, and he included Jimmy Lai, the Hong Kong media tycoon and pro-democracy advocate charged with endangering Chinese national security with his weapon of truth. One of the evening’s awardees sits in a Vietnamese prison for her critiques of state repression, the writer Pham Doan Trang.

It would have been easy in an evening that honored the music legend Paul Simon—who played his “American Tune” on acoustic guitar just a few feet away from me—to lose the singular and symbolic importance of one reporter’s imprisonment.

With talk show host Seth Meyers as MC, with Malcolm Gladwell and other authors as presenters and speakers, and with PEN America at the center of controversies over whether Israeli and Palestinian free speech are created equal, one might, for a moment, forget Evan.

Amid the noise and glitter and controversy, however, there was a bigger story to be told. I scribbled down on my napkin Latour’s closing quote: “Russia may be an ocean and a continent away, but the distance between authoritarianism and a free society is measured by the strength of a free press.”

Frederick Kempe is president and chief executive officer of the Atlantic Council. You can follow him on Twitter: @FredKempe.

This edition is part of Frederick Kempe’s Inflection Points Today newsletter, a column of quick-hit insights on a world in transition. To receive this newsletter throughout the week, sign up here.

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Why Georgia’s ruling party is pushing for the foreign agent law—and how the West should respond

Maia Nikoladze and Ana Lejava — Sat, 18 May 2024 00:55:01 +0000

On May 14, the Georgian parliament passed a controversial “foreign agent” law during its third and final hearing. The legislation would require organizations receiving more than 20 percent of their funding from other countries to register as “organizations serving the interests of a foreign power.” The bill has prompted fierce backlash from critics who argue that it is intended to crack down on opposition to the ruling party and align Georgia closer to Russia and away from the West. President Salome Zurabishvili plans on vetoing the bill, but the parliament can override her veto. Large, ongoing protests in Tbilisi have revealed how unpopular this foreign agent legislation is. So, why is the ruling Georgian Dream party still pushing it forward? And how should the West respond if the bill passes into law?

Electoral advantage

Georgian Dream stands to benefit from the adoption of the foreign agent law ahead of parliamentary elections in October. Civil society in Georgia has historically exerted a significant influence on the country’s politics. For example, it played a pivotal role in the 2012 elections by contributing to voter education and election monitoring.

However, the main vulnerability that Georgian nongovernmental organizations (NGOs) and civil society organizations face is financial reliance on international donors. Civil society organizations in Georgia receive more than 90 percent of funding from foreign sources, according to a 2020 report. Targeting their funding streams right before the elections seems to be a logical step for a ruling party that intends to eliminate influential and potentially opposing voices before the elections.

But many argue that Georgian Dream could win the October parliamentary elections without this legislation. After all, the ruling party is ahead in the polls and there have been reports that Georgian Dream has been leveraging administrative power to influence the elections. Extreme divisions have made it almost impossible for the Georgian opposition parties to form a coalition that could counter Georgian Dream. If anything, by introducing the foreign agent bill, Georgian Dream has united the opposition as well as the broader population in defense of Georgia’s European future.

Why, then, did Georgian Dream decide to move forward with this unpopular bill, knowing all too well it would trigger protests and antigovernment narratives just a few months before the elections?

Ivanishvili’s influence

Bidzina Ivanishvili, the richest man in Georgia and the founder and honorary chairman of Georgian Dream, could be key to understanding why the party took this self-destructive step. He exerts exceptional influence on the government’s decisions and actions.

Ivanishvili delivered a speech on April 29, during which he defined NGOs as agents nurtured by a global force that, in his telling, is responsible for getting Georgia and Ukraine into wars with Russia. He believes that the introduction of the foreign agent law ahead of the elections was necessary because NGOs were trying to change electoral laws, acting in the interest of the “global party of war,” which, he believes, intends to engineer a revolution in Georgia.

The combination of Ivanishvili’s views and a ruling party that executes his every decision with no questions asked is putting the Georgian people’s safety and future at risk. A sensible and nuanced Western response is needed to support the Georgian people.

The regional trend

The adoption of the Russian-style foreign agent law seems to be a regional trend, not just a Georgian phenomenon. Hungary, Kyrgyzstan, and Georgia all started actively pushing for foreign agent laws in 2023. Hungary implemented foreign agent legislation in December 2023, and Kyrgyzstan adopted its own in April 2024.

Three states in Eastern Europe and Eurasia pushing to adopt Russian-style foreign agent laws almost at the same time might not be a coincidence. It is possible Russia is inspiring or even pressuring the ruling parties. After all, Moscow’s influence in these countries would likely increase if the NGOs and civil society organizations in these countries were to lose funding from international donors.

Kremlin spokesperson Dmitry Peskov has defended Georgian Dream’s reintroduction of the foreign agent law and stated that it is in Moscow’s interests that the situation in Georgia is “stable and predictable.” Russian President Vladimir Putin has also reaffirmed ties with Hungary’s nationalist Prime Minister Viktor Orbán and claimed that Russian-Kyrgyz relations are developing in all directions.

The European Union (EU) has already launched legal action against Hungary in response to the introduction of this law. But Georgia and Kyrgyzstan are not EU member states, and so the same legal route is not available.

What the West should and should not do

It is crucial for the international community—especially the EU, the United States, and the United Kingdom—to support the will of the Georgian people. This means aiding Georgia’s pro-European president in her challenge to the ruling party’s actions. It also means seeking accountability for the ruling class that defies the will of its people and is impeding Georgia’s Euro-Atlantic integration, a goal that is written into Georgia’s constitution.

The EU should reconsider measures that could harm the Georgian population, such as the potential suspension of current visa-free travel. It would not help the situation to punish the wider Georgian population for the ruling party’s actions.

The international community and donors must continue their support for civil society organizations in Georgia, especially in the lead-up to the October elections. Despite the legal ramifications of the new bill and the anticipated crackdown on the civil society sector, sustaining funding streams is crucial for bolstering civil society’s monitoring capacity. This is vital for ensuring transparent and fair electoral processes in October and providing Georgia with an opportunity for another peaceful transition of power.

The many EU and Georgian flags carried through the streets of Tbilisi in recent weeks make clear where most Georgians’ view their future. The West must do what it can to help keep them headed in that direction.

Maia Nikoladze is the assistant director at the Economic Statecraft Initiative within the Atlantic Council’s GeoEconomics Center. Follow her at @Mai_Nikoladze.

Ana Lejava is a policy associate at the Georgetown Institute for Women, Peace and Security and a former Young Ambassador of Georgia to the United States. Follow her at @AnaLejava.

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The European Parliament is still learning its lesson from corruption scandals

Sophia Athan — Thu, 09 May 2024 19:09:26 +0000

Earlier this year, the Dutch investigative platform Follow the Money reported that 25 percent of sitting members of the European Parliament (MEPs) across twenty-two European Union (EU) member states have been involved in some type of misbehavior or scandal at the national or international level. A common thread throughout the investigation was MEPs’ entanglement with foreign state actors.

The report includes the now-infamous Qatargate scandal, in which several sitting and former MEPs were arrested in December 2022 for a cash-for-influence operation. But the report also includes lesser-known cases, such as a privately funded trip for two Irish MEPs to the headquarters of Hashd al-Shaabi, an Iranian-backed, Russian-allied militant organization in Iraq, to criticize US and European military action in Iraq.

The upcoming European Parliament elections in June amplify the urgency of defending the institution against foreign meddling. To accomplish this, EU institutions should codify stricter definitions of foreign influence and interference, and they should pass future reforms as legally binding EU regulations. At the same time, EU officials must ensure that the organization’s transparency and anti-corruption reforms are crafted so that they don’t infringe on member states’ civil society organizations.

It’s not just Qatargate

Qatargate was the most prominent recent scandal to plague the European Parliament. The scheme’s primary goal was to rehabilitate Qatar’s image before the 2022 FIFA World Cup by stifling European Parliament resolutions critical of Doha and drafting speeches for Qatari ministers at EU hearings in exchange for under-the-table payments.

The case came to a head on December 9, 2022, when authorities conducted nineteen raids with eight arrests in Belgium and Italy, complete with the seizure of more than one million euros in cash. The highest-profile arrest was Greek MEP and then Parliament Vice President Eva Kaili. Her partner, Francesco Giorgi, and his boss, former Italian MEP Antonio Panzeri, were both arrested and confessed to involvement in the scandal. Throughout the investigation, authorities uncovered evidence of three hundred alleged attempts to manipulate the European Parliament, with Qatar at the center of the influence deal, which was purportedly worth four million euros.

The Parliament continues to find its current, former, and prospective MEPs embroiled in scandals with foreign governments, often involving Russia or China, especially during election years. In March, the Parliament opened an investigation into Latvian MEP Tatjana Ždanoka, who faces accusations of operating as a Russian agent since 2004. Regional news sites published numerous emails linking Ždanoka to a handler in the Russian Federal Security Service.

Additionally, the far-right Euroskeptic party Alternative for Germany, currently polling second among German voters, has made headlines for major scandals involving its top two candidates for the European elections, Petr Bystron and Maximilian Krah.

In March, reports emerged that Bystron was linked to the Russian-backed propaganda outlet “Voice of Europe,” a platform that spreads disinformation and provides financial support to pro-Russian politicians in the EU. Czech intelligence authorities claim that Bystron received “about 20,000 euros” from the site’s Kremlin-connected operator. The Munich Public Prosecutor’s Office has announced preliminary investigations against Bystron for “possible bribery of elected officials.”

Voice of Europe’s news reports would blend in with typical Russian propaganda if not for the political legitimacy they gained by featuring sitting MEPs. Additionally, some Voice of Europe videos appear to have been filmed at VoxBox, the Parliament’s in-house studio, using the heart of the institution’s broadcast system to disseminate Kremlin talking points, including arguments against Ukraine’s accession to the EU and in favor of peace talks with Russia.

In addition to the investigation against Bystron, Krah has been involved in multiple scandals. In April, German police arrested Jian Guo, an aide for Krah, over accusations that he used his proximity to Krah to spy for China. That same week, the Dresden Public Prosecutor’s Office announced two preliminary investigations against Krah over alleged payments from Russia and China for his work as an MEP.

Can the EU defend its own democracy?

In the wake of Qatargate, the European Parliament and European Commission moved to tighten rules to protect the EU’s democratic process. Last September, the Parliament adopted new rules requiring detailed declarations on MEP private interests, reporting on external income over five thousand euros per year, and bans on engagement with paid lobbying activity that could directly impact the EU’s decision-making processes.

The EU’s executive, the European Commission, adopted the Defense of Democracy package in December 2023 in tandem with the Parliament’s reforms to prepare for the 2024 European elections. The plan includes rules designed to increase transparency and safeguard European institutions from corruption. This rollout is the most significant package of reforms at the EU level since Qatargate, but it could benefit from stronger and stricter definitions to maximize its impact.

The road to reform

First, the EU should provide stronger definitions for the most basic terms in the defense toolkit. Chapter I, Article 2 of the Directive on Transparency of Interest Representation on behalf of Third Countries (2023/0463) fails to provide working definitions for foreign “influence” versus “interference,” a critical debate in the field, nor for the concept of “transparency.” The absence of these definitions is detrimental to the EU’s enforcement efforts, as there is little consensus across the bloc on what these categories include and exclude, or whether they can be used interchangeably. This lack of clarity is understandable in the short term. Creating a narrow definition related only to commonly used tactics may be too restrictive. At the same time, creating too broad a definition could inhibit political participation. In the long term, however, the EU must stop relying on a principle akin to US Supreme Court Justice Potter Stewart’s nondefinition of obscenity—“I know it when I see it”—and instead create specific, workable definitions for the member states to enforce.

Second, the EU must keep legal precedent in mind when creating legislation relating to civil society. In 2020, the European Court of Justice (ECJ) struck down a Hungarian transparency law on nongovernmental organizations (NGOs). The law mandated that NGOs listed as recipients of foreign funding by the Hungarian government must declare their income each year to the state and include disclaimers in all publications noting their designation. The ECJ ruled that the law taken in totality had a “deterring effect” on NGOs. The decision noted that while increasing transparency is a legitimate aim, states must establish how their additional regulations contribute to increasing transparency, which Hungary failed to do. The ECJ decision demonstrates that the EU must balance its necessity for transparency legislation without overregulating, which could lead to the inhibition of civil society.

Third, the EU should pass future reforms as legally binding EU regulations, rather than as directives, which only require member states to create legislation at the national level. The Defense of Democracy package, for instance, issued directives, meaning member states have flexibility in how they interpret and enforce each of its provisions, which increases the likelihood that it will be enforced in a variety of ways throughout the bloc. Thus, to ensure that future transparency and anti-corruption polices are equitably enforced EU-wide, it is important that they be legally binding regulations.

Taken together, these reforms to corruption-fighting legislation will help the EU’s institutions defend their reputation, integrity, and accountability, particularly in an election year.

Sophia Athan is a young global professional with the Atlantic Council’s Europe Center.

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Idlbi quoted in Arabi 21 on new US captagon law

Atlantic Council — Fri, 19 Apr 2024 15:55:57 +0000

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Putin is weaponizing corruption to weaken Europe from within

Francis Shin — Tue, 02 Apr 2024 19:09:02 +0000

Corruption has long been a favorite weapon in Vladimir Putin’s arsenal. He used it extensively against Ukraine over a number of years to help prepare the ground for the full-scale invasion of February 2022. The Russian leader now appears to be employing the same weaponized corruption tactics honed earlier in Ukraine to undermine Europe and weaken the continent’s democratic institutions from within.

Czech and Belgian law enforcement agencies reported in late March 2024 that Kremlin-linked Ukrainian oligarch Viktor Medvedchuk was behind a Prague-based Russian propaganda network centered around the Voice of Europe outlet. Medvedchuk is accused of masterminding the distribution of anti-Ukrainian narratives in the European media and paying European Parliament members to promote Russian interests in their legislative activities.

This latest corruption scandal is a painful reminder that the EU and US remain at significant risk of Russian electoral interference in the lead-up to elections later this year. For the EU specifically, the scandal further demonstrates that it must put its own house in order if it is to credibly demand Ukraine do the same during the latter’s ongoing EU accession negotiations.

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The oligarch at the center of the scandal, Viktor Medvedchuk, has close ties to Russian President Vladimir Putin, who is godfather to Medvedchuk’s daughter. Throughout the three decades following Ukrainian independence in 1991, Medvedchuk was a prominent figure in the country’s political life and a vocal advocate of Russian interests.

Medvedchuk’s personal relationship with Putin helped earn him a reputation as the Kremlin’s unofficial representative in Ukraine. This led US intelligence agencies to identify Medvedchuk as one of Moscow’s top choices to head a puppet Ukrainian administration in the event of a successful invasion.

When Russian troops crossed the border in February 2022, Medvedchuk initially went into hiding. However, he was detained by the Ukrainian authorities two months later, and was eventually traded for a large number of Ukrainian POWs in one of the most controversial prisoner exchanges of the war.

Regardless of his exile and loss of Ukrainian citizenship, Medvedchuk remains an important ally to Putin. His leadership of the Voice of Europe influence operation indicates Europe’s continued vulnerability to the Kremlin’s weaponized corruption. Whereas Ukraine, the US, UK, Canada, Australia, and New Zealand all imposed sanctions on Medvedchuk and his associates some time ago, the European Union did not do so. As a result, Medvedchuk was still able to do business in Europe.

As a result of this apparent oversight, several of Medvedchuk’s EU-based assets are thought to have remained untouched until his involvement with Voice of Europe was uncovered. This gave him a degree of maneuverability with his EU-based financial assets that appears to have facilitated his allegedly illicit activities.

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In the wake of the recent revelations, the Czech authorities have imposed sanctions on Medvedchuk and other Kremlin-linked associates. Meanwhile, Belgian law enforcement agencies have opened probes into alleged bribes paid to serving MEPs from France, Germany, Belgium, the Netherlands, Poland, and Hungary, with the Polish authorities also launching an investigation.

While these measures are welcome, it is not clear why EU authorities did not act earlier to counter the Kremlin’s weaponized corruption. Many now fear the current scandal is just the tip of the iceberg in terms of Russian efforts to infiltrate democratic institutions and the media throughout the Western world. Looming elections on both sides of the Atlantic have added a sense of urgency to this debate.

In theory, the European Commission’s “freeze and seize” task force is meant to coordinate with the rest of the Russian Elites, Proxies, and Oligarchs (REPO) task force, which features the relevant national sanctions authorities from G7 member states and Australia. The fact that the EU’s sanctions listings still do not fully align with that of its REPO allies, especially on somebody as prominent as Medvedchuk, raises serious concerns over the effectiveness of this coordination.

The European Union should be setting an example when it comes to combating corruption. When recommending that the European Council open official EU accession negotiations with Ukraine in late November 2023, Commission Vice President Věra Jourová cautioned that Ukraine still had a long way to go in developing anti-corruption regulations, even as she praised the significant progress made by the Ukrainian authorities so far. Inevitably, questions are now being asked about the credibility of the EU’s own anti-corruption policies.

Recent claims of a major Russian influence operation operating in the heart of the EU should serve as a wake-up call for policymakers throughout the West. With the Kremlin clearly preparing for a long-term geopolitical confrontation, the need for vigilance will only grow. In response to this threat, transatlantic institutions should prioritize bolstering their ability to resist Russia’s weaponized corruption, while making sure the Kremlin’s agents are subject to the maximum available restrictions.

Francis Shin is a Research Assistant at the Atlantic Council’s Europe Center.

And, of course, a responsible Russian government would not be embroiled in a destructive war in Ukraine that may have left Moscow distracted, overstretched, and therefore vulnerable. Nor would a responsible Russian government have embarked on the security crackdown (largely unnoticed in the Western media, with some exceptions) against Central Asian workers that fueled grievances that may have allowed ISIS-K to recruit terrorist killers among people already in Russia—though the details at this time remain unclear.

But Putin’s government is not a responsible government, and the Russian people are likely to be denied all these reasonable steps. This means the Russian people will continue to be vulnerable to future ISIS-K attacks, even after the security crackdown that is no doubt coming inside Russia. Nor is there likely to be a change of Russian support for the Taliban in Afghanistan, the Assad regime in Syria, or the regime in Iran—all of which factor into anti-Russian animus among Muslims in Central Asia and the Caucasus that ISIS-K uses for terrorist recruiting.

Russia’s aggression against Ukraine and the return of great power competition to the world stage have not ended the threat of terrorism from ISIS-K and other terrorist groups. The fact that they get less attention in the Western press does not mean those threats have vanished. Terrorism is still a threat that deserves international cooperation, as the Biden administration showed by warning Russia of the threat in early March.

Russia’s intelligence failure that made March 22 possible shows that terrorism’s danger is not past, even while Russia’s irresponsibility makes the world and its own citizens less secure.

Thomas S. Warrick is a senior fellow and director of the Future of DHS Project at the Atlantic Council. He served in the Department of State from 1997-2007 and as deputy assistant secretary for counterterrorism policy at the US Department of Homeland Security from 2008 to 2019.

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#BalkansDebrief – Why are elections in North Macedonia critical for its EU path? | A debrief with Marko Troshanovski

nlawler — Wed, 20 Mar 2024 13:56:31 +0000

IN THIS EPISODE

North Macedonia, a small nation of 2 million, in the Western Balkans, gained international attention in 2019, when it agreed to the seemingly impossible: changing its name in exchange for EU negotiations and NATO membership. While NATO membership was secured, EU accession talks have stalled for years. This is largely due to Bulgaria’s demand for Constitutional changes recognizing a Bulgarian minority.

For North Macedonians, Sofia’s veto was a bitter pill to swallow resulting in public support for the EU dropping sharply, according to surveys. On May 8, the country faces critical elections that will decide its future in relation to the EU.

Nonresident Senior Fellow Ilva Tare sits down will Marko Troshanovski, President of the Institute for Democracy, to discuss the importance of the elections and the key issues debated by the main two opposing political camps.

Can the North Macedonian public regain trust in the EU accession process? What do the surveys suggest about the winner of the political elections? How will a potential victory by the center-right VRMNO-DPMNE opposition affect the country’s foreign policy and its EU path? What role will Albanian parties play in the winning coalition? How should the new government address the problem of corruption?

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Ukraine’s partners should link wartime aid to continued reform progress

Mykhailo Zhernakov, Nestor Barchuk — Tue, 19 Mar 2024 19:15:34 +0000

As Ukrainians fight for national survival against Russia’s ongoing invasion, the country is continuing to implement important domestic reforms. These reforms play a crucial role in strengthening Ukraine’s wartime resilience, and also set the stage for a successful postwar recovery. The international community has a clear interest in helping Ukraine achieve further reform progress.

Since the onset of Russia’s full-scale invasion two years ago, one of the key catalysts driving Ukraine’s reform agenda has been the June 2022 move to grant the country EU candidate status. When announcing this decision, the European Commission set Ukraine seven key reform goals to meet before official EU membership negotiations could begin. Priorities included reforms related to the rule of law, particularly the reform of crucial judicial bodies such as the High Council of Justice (HCJ) and the High Qualification Commission of Judges (HQCJ).

While significant progress has been made toward implementing these reforms, major challenges persist. For example, although new procedures have been introduced governing the selection of judges to the country’s Constitutional Court, there are still concerns regarding the appointment of politically compromised candidates. As Ukraine continues its judicial reform efforts, it is imperative to infuse these endeavors with renewed energy.

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Looking ahead, a primary focus should be on reforming Ukraine’s Supreme Court, which plays a crucial role in the country’s judiciary. In spring 2023, the National Anti-Corruption Bureau of Ukraine and the Specialized Anti-Corruption Prosecutor’s Office uncovered evidence of a $2.7 million bribe involving the president of the Supreme Court. However, in the wake of this corruption scandal, three-quarters of Supreme Court judges appointed another judge as the new president of the court despite serious integrity concerns.

NGOs and members of the Ukrainian judiciary have proposed a two-step approach to Supreme Court reform featuring the vetting of sitting judges and implementation of a new selection process with the involvement of international experts. This format has been endorsed by the European Commission. Reforming the Supreme Court is widely recognized as an essential step toward strengthening the rule of law, combating corruption, and enhancing protection for investors.

Another reform priority is establishing the High Administrative Court (HACU), following the liquidation of the District Administrative Court of Kyiv (DACK) in December 2022. The DACK was widely accused of judicial misconduct. It wielded substantial power, overseeing cases involving municipal authorities and central executive bodies in the Ukrainian capital, but had become tainted by successive corruption scandals. To safeguard the integrity of HACU judges and prevent future allegations of corruption, it is vital to implement a selection process with the meaningful involvement of independent international experts, similar to the successful model used to establish the High Anti-Corruption Court.

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Reform of Ukraine’s legal education system is also indispensable for the success of the country’s judicial reforms. The judicial system currently suffers from a significant shortage of personnel, underscoring the need for a robust legal education system. Detrimental practices include the training of lawyers by traditional universities and law enforcement institutions. These institutions educate one-third of all legal professionals and receive about half of state funding allocated for legal education. However, rather than promoting critical thinking, students often encounter a curriculum and environment that stresses obedience.

Critics argue that this approach fails to instill the necessary professional skills. Additionally, graduates from law enforcement academies typically exhibit lower levels of specialist knowledge compared to university graduates. The EU highlighted its concerns regarding legal education in the Ukraine Accession Report 2023, stressing the necessity of addressing this issue by separating the training of lawyers in universities and law enforcement academies. G7 countries have also raised this issue.

Ukraine’s ability to defend itself against Russian aggression depends heavily on continued international support. Kyiv’s partners therefore have considerable leverage when it comes to maintaining the country’s reform momentum. With this in mind, it is crucial for Ukraine’s international allies to link continued financial assistance with the implementation of reforms. The effectiveness of this approach can be seen in the progress made between summer 2022 and late 2023 on the reform goals identified by the EU.

The EU has already outlined its additional reform recommendations. It would also be helpful to establish concrete reform requirements from G7 countries and connect these directly to aid. By linking financial support to specific reform targets, Ukraine’s international allies can make sure critical reforms are implemented and the country continues to move in the right direction. The need to maintain Ukraine’s reform momentum is another strong argument in favor of confirming further direct US budget support as part of future aid. This will provide vital leverage while bolstering Ukraine’s resilience and encouraging the authorities in Kyiv to implement the necessary reforms.

The road ahead is extremely challenging, but Ukraine can still emerge as a regional beacon of democracy, Euro-Atlantic security, and the rule of law. This will require the unwavering support of the country’s Western partners. To achieve this goal, future aid should be tied to a steadfast Ukrainian commitment to advance reforms without concessions. This can help shape the kind of future Ukrainians are currently fighting for.

Mykhailo Zhernakov is chair of the board of the DEJURE Foundation. Nestor Barchuk is international relations manager of the DEJURE Foundation.

Navalny’s rise to public prominence was a result of his insight that the Putin regime’s pervasive and massive corruption posed a major political liability. His skill as a corruption investigator enabled him to expose the eye-catching, gaudy excesses on which Russia’s political elites frittered away the enormous wealth they stole from the Russian people. His skill as a political communicator—the clear charisma that shone through the clever, entertaining videos he produced—brought the results of his investigations to mass audiences in Russia and around the world. As his political career developed, his critiques of the Putin regime broadened to include its widespread human rights abuses and its brutal military interventions in Ukraine and Syria.

Navalny emerged as an important political leader during Russia’s “Bolotnaya” protests of 2011-2012, as Russians took to the street over Putin’s return to a third term as president. This year, on the cusp of a fifth Putin term, Russia’s rapid descent into repression and militarism could make Navalny’s vision for a democratic and peaceful Russia seem further than ever from realization. Yet Navalny’s activism since 2011 has also contributed to the development of a broader democratic movement capable of continuing without him.

While Navalny’s personal popularity at times drew criticism of a personalistic style of politics, in truth his political strategy always centered on movement-building. In 2013, his highly competitive campaign for Moscow mayor attracted thousands of volunteers and launched the political careers of several other oppositionists who have gone on to become important figures in their own right. In 2018, his shadow “campaign” for president (which he continued even after being denied access to the ballot) built a nationwide network of dozens of local offices spanning Russia’s huge territory that continued after the election to serve as incubators of local political and civic activism. The Anti-Corruption Foundation (FBK)—the nongovernmental organization Navalny founded to carry out corruption investigations and raise public awareness of how Putin’s elite have looted Russia for decades—has continued to produce high-impact investigations during his imprisonment. Despite a 2021 “extremist” designation that forced FBK into exile as several staff were jailed, the organization remains one of the most important in Russian civil society. FBK’s “Navalny Live” YouTube channel is one of Russia’s most popular, reaching millions of Russians each month. Beyond those with direct connections to Navalny are thousands more (overwhelmingly young) Russian activists who were inspired by Navalny’s work to make their own efforts to build the better future for their country. He built a movement that was bigger than himself.

This is the legacy Navalny leaves for Russian society. His vision, his political skills, and his personal courage helped sustain Russia’s democratic movement through a period of sharply intensifying repression. Perhaps his most important political insight was his recognition of how his own moral leadership—the sacrifices of his health and freedom he was willing to make on behalf of his cause—could cut through the cynicism that so often dominates Russian political life. His martyrdom magnifies that moral leadership immeasurably.

In an interview shown in the 2022 Oscar-winning documentary about his work, Navalny is asked what message he would want to send in the event that he is killed. His message, he responds, is a simple one: “You are not allowed to give up. If they [decide to kill me], it means that we are incredibly strong. We need to use this power . . . All that is needed for the triumph of evil is for good people to do nothing.” This simple but powerful sentiment that has guided Navalny’s life has become an even more powerful message in his death—one capable of inspiring Russians to even greater efforts to build a better future.

Dylan Myles-Primakoff is a nonresident senior fellow at the Atlantic Council’s Eurasia Center and a senior manager for Eurasia Programs at the National Endowment for Democracy.

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Navalny’s life and death show Putinism isn’t inevitable

Doug Klain — Fri, 16 Feb 2024 22:53:14 +0000

Death was probably the only way Alexei Navalny would ever escape his imprisonment on trumped-up charges in Russia: either his own or Russian President Vladimir Putin’s. With Russian media reports that Navalny dropped dead after taking a walk in the Arctic penal colony where he was last held, we have the answer.

The face of genuine anti-Putin opposition in Russia, the former lawyer, blogger, anticorruption investigator, presidential candidate, and prisoner offered, for many, the best democratic alternative to Putinism. While most Russians viewed him with apathy, Navalny built a national movement based on exposing the rampant corruption and gangsterism of Putin’s system. Even if he never had any hope of winning the rigged Russian elections or sparking some sudden popular uprising to overthrow Russia’s leadership, Putin still saw Navalny and his team as a mortal threat.

In the lead-up to Russia’s February 2022 full-scale invasion of Ukraine, Putin set about eviscerating Russian civil society and free media, including Navalny’s Anti-Corruption Foundation (FBK). This crackdown, in effect, disbanded or neutralized any organizations or popular figures that the Russian people could rally around in opposition to the war in Ukraine.

Members of Congress . . . are at this moment rightly being reminded of the urgency with which Russia must be stopped.

After recovering in Germany from an assassination attempt, Navalny returned to Russia in 2021 to face certain imprisonment and a likely death sentence for opposing Putin. Shortly thereafter, his FBK was declared an “extremist” organization and forcibly liquidated. Its offices across the country were shuttered, and those not imprisoned were shunted out of the country.

During Russia’s parliamentary elections in fall 2021, the Kremlin coerced Google and Apple into removing from their online stores the app associated with FBK’s “Smart Voting” program, which encouraged voters to coalesce around individual candidates to deny Putin’s United Russia party seats in the Duma—or at least force the authorities to be even more brazen in their stealing of the election.

Navalny and his team had a talent for breaking through the dry bleakness of Putinism. His investigations into Russia’s kleptocracy were filled with Navalny’s sense of authenticity and humor. For example, a 2016 exposé about former Russian President Dmitry Medvedev’s special building just for ducks at one of his lavish houses became a viral meme and turned rubber ducks into a symbol of protest in Russia. Navalny’s own blue underwear, on which the deadly nerve agent Novichok was smeared by his would-be assassins, became another such resistance meme.

More than most, Navalny was skilled at finding the issues and language that could activate Russians in a system designed to convince individuals that acquiescence is preferable to resistance. In his early years in opposition politics, this included the employment of racist and anti-immigrant tropes, as well as association with particularly unsavory groups.

This history—along with Navalny’s opposition to the war in Ukraine less because of its criminal and genocidal nature and more because it was disastrous for Russia—means that Navalny wasn’t viewed with particular favor among Putin’s other victims in Ukraine and elsewhere.

Navalny’s murder, nevertheless, is an important reminder of two key facts.

First, the violence inherent to Putin’s blood-soaked reign will continue unabated until he and his thugs—as well as the relative indifference in Russian society that allows it to happen—are stopped. Most immediately, that can and must happen in Ukraine. Members of Congress, in their sixth month of debating whether to approve aid to Ukraine, are at this moment rightly being reminded of the urgency with which Russia must be stopped.

Second, Navalny’s murder is like dousing the last flame of hope inside Russia of a positive vision for the country. Stabilizing Putin’s hold on power in the immediate run-up to his invasion of Ukraine meant destroying many of the brightest parts of the freer Russia that emerged from the Soviet Union. Free media is once again censored and civil society organizations like Memorial—Russia’s oldest nongovernmental organization, which was dedicated to the memory of Soviet repressions and the quest to keep them from being repeated—liquidated and banned.

The system crafted by Putin and his allies over the last quarter century relies on manufacturing a sense of inevitability and invincibility. Putin must be a larger-than-life figure and his state must be all-powerful. But the fact that this system can feel so threatened not only by a man such as Navalny, but even by someone on the street holding a blank sign in protest, shows that there is nothing inevitable or invincible about Putinism. The coming “re-election” of Putin next month is intended as a ritual of reaffirming his power, but Navalny’s murder will stand as a stark reminder of the extraordinary lengths to which Putin must go to maintain that power.

With Navalny killed, Putin has left no real alternatives to his rule in Russia, and the chance of change is closed off just a bit more. The best and perhaps only real hope for creating a new opening for change in Russia is by unambiguously defeating Putin’s greatest act of violence—Russia’s war to annihilate Ukraine.

Doug Klain is a nonresident fellow at the Atlantic Council’s Eurasia Center and a policy analyst at Razom for Ukraine, a nonprofit humanitarian aid and advocacy organization.

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Unraveling Egypt’s political economy puzzle: It’s more than just economics

Racha Helwa — Thu, 15 Feb 2024 17:05:45 +0000

Egypt is a country blessed with natural gifts and unique geographical advantages. Situated at the crossroads of Africa and the Middle East, Egypt’s strategic location is underscored by the significance of the Suez Canal, a vital maritime route connecting North America and Europe to the Indian Ocean. This canal stands as one of the busiest shipping lanes globally, emphasizing Egypt’s pivotal role in international trade.

Moreover, Egypt is renowned for its rich cultural heritage, boasting seven UNESCO World Heritage Sites. These treasures include the Great Pyramid of Giza, one of the seven wonders of the ancient world. The allure of Egypt’s cultural legacy, coupled with competitive travel costs due to the substantial devaluation of the Egyptian pound (LE), positions the country as a pivotal travel destination with immense potential for tourism revenues.

In addition to its cultural wealth, Egypt possesses a substantial human capital base, with a population of about 115 million people, representing approximately 1.4 percent of the global population. Notably, 60 percent of Egypt’s population is under thirty, highlighting a sizable workforce poised to enter the job market. Egypt also benefits from abundant sunlight and elevated wind speeds, positioning the country as an optimal site for renewable energy sources. The burgeoning renewable energy market in Egypt holds significant economic potential, amounting to billions of dollars.

However, despite all its inherent advantages, the economy has been grappling with persistent challenges for nearly seventy-five years. High poverty rates continue to plague the nation, with World Bank statistics indicating a rise in the poverty rate, with the proportion of the population below the poverty line increasing from 25.2 percent in 2010 to 32.5 percent in 2017–2018.

Egypt’s tourism revenues have also remained modest, averaging around $8–$9 billion annually between 2014 and 2022, despite the country’s potential as a premier tourist destination. In comparison, the United Arab Emirates (UAE) has consistently generated higher tourism income, averaging around $30 billion annually during the same period, and is projected to reach $60 billion by 2028.

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Additionally, Egypt’s foreign direct investment (FDI) inflows have been relatively modest, amounting to $11 billion in 2020. This figure pales in comparison to that of other middle-income countries that have attracted significantly higher FDI inflows for the same year, such as India ($50 billion), Brazil ($70 billion), or South Africa ($90 billion). Egypt also has a chronic trade deficit, which registered $37 billion by the end of 2023, down from $48 billion in 2022.

Moreover, Egypt has grappled with fiscal deficits, averaging 9.5 percent of gross domestic product (GDP) over the past decade. As a result, the government has accumulated a substantial public debt, with external debt stocks, including International Monetary Fund (IMF) credit, rising from an average of $40 billion post-Arab Spring to $130 billion in 2020, comprising nearly 70 percent long-term debt, which poses significant challenges for the economy.

The economy’s vulnerability is further compounded by its reliance on volatile revenue sources, including tourism, the Suez Canal, and foreign remittances. Therefore, external shocks—such as the pandemic, the Ukraine war, the Gaza war, and the recent Red Sea attacks—have exerted additional economic pressure on Egypt. As a result, the current account, which closed with an average surplus of $2 billion between 2002 and 2007, reversed to a significant deficit of $16 billion by the end of 2022 and is projected to settle at $9 billion by the end of 2024.

Consequently, the Egyptian pound has experienced substantial depreciation, losing more than 70 percent of its value since early 2022, making it the sixth worst-performing currency globally since the beginning of this year. Delayed adjustments to the foreign exchange policy have resulted in the emergence of a parallel market, with the Egyptian pound plunging to LE 68–70 per US dollar, compared to a fixed rate of LE 30–31 per US dollar in the formal banking sector, where the supply of foreign currency is minimal. Central bank reserves of foreign currencies have also dwindled, declining from $44.6 billion in 2019 to $32 billion by the end of 2022.

But why does Egypt, despite its considerable potential, encounter such notable economic hurdles? While many mainstream economists attribute the crisis to macroeconomic mismanagement, acknowledging the importance of macroeconomic stability for growth, this explanation does not capture the full complexity of the issue. Instead, Egypt’s sluggish, and relatively modest, economic transformation can be better understood through the lens of the “political economy of ideas.” This theory, elucidated by Harvard economist Dany Rodrick in his paper “Ideas Versus Interests in Policymaking,” underscores the pivotal role of ideology as a catalyst for shaping public policy and institutional change.

The concept of “ideology” or the “influence of ideas” is a fundamental tenet in political economy, offering insights into why some nations progress more rapidly than others and, conversely, why some lag behind.

Historically, Egypt’s economic ideology long adhered to an inward-looking, import-substitution approach under the Gamal Abdel Nasser regime (1950–1970), a trend common among developing economies during the decolonization era. Key features of the Nasser regime included the nationalization of private assets, management of state enterprises, import substitution, and restrictions on exports.

Later, the Anwar Sadat regime (1970–1981) sought to reverse this trend by introducing a new pro-market investment legislation known as the “open door” policy. However, his ideology was rejected widely, as evidenced by the 1977 Bread Riots. In 1981, Hosni Mubarak came to power in the wake of these riots, which prevented him from initiating similar fundamental reforms. Instead, his government used a mixed approach, implementing partial, piecemeal pro-market policies while relying on strong remnants from the Nasser era. This pattern persists to this day. This mixed ideology has been manifesting, for example, in the slow progress of the public asset-management (privatization) program, and the relatively large size of the public sector in the economy.

However, for a nation to fully embrace a pro-market stance, it must possess a strong ideological commitment to pro-market policies and clear political incentives to foster this ideology. For instance, the adoption of South Korea’s export-driven Industrialization Program (1962–1980) was guided by a long-term vision of joining the ranks of the most industrialized nations, culminating in the country’s successful accession to the Organisation for Economic Co-operation and Development (OECD) in 1996. Similarly, Turkey’s aspirations to join the European Union drove its pro-market economic reform and overall economic progress in the 1980s and 1990s. At the same time, economic reforms in post-apartheid South Africa have been predominantly driven by a strong commitment to business competitiveness and economic equity.

In comparison, Egypt has never fully embraced a long-term, target-driven, pro-market ideology. The economy continues to operate using piecemeal economic reforms, which are hindered by strong Nasser-era remnants, resulting in a slow and inconsistent pattern of implementation. This mixed approach has led to heightened economic uncertainties, posing challenges for both local and global investors. While investors may navigate political instability, economic policy uncertainty deters firms from hiring, investing, and accessing markets. Therefore, to address the fundamental challenges facing Egypt’s economy, it is imperative to assess and address the political economy prerequisites, not just focus on macroeconomic fundamentals. Without fostering a more robust pro-market ideology, both within the government and among the public, economic reforms in Egypt will remain trapped in a cycle of stagnation for years to come.

Racha Helwa is the director of the empowerME Initiative at the Atlantic Council’s Rafik Hariri Center for the Middle East.

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Wartime Ukraine ranks among world’s top performers in anti-corruption index

Peter Dickinson — Thu, 01 Feb 2024 22:17:16 +0000

Ukraine recorded solid progress last year in its long struggle with corruption, according to the latest edition of Transparency International’s Corruption Perceptions Index. Wartime Ukraine climbed twelve places in the 2023 edition of the annual survey to rank 104th among 180 featured countries, increasing its anti-corruption score from 33 to 36 out of 100. “Ukraine’s growth by three points is one of the best results over the past year in the world,” noted Transparency International in the report accompanying the new edition of the ranking, which was released on January 30.

Ukraine’s strong performance in the authoritative anti-corruption ranking places the country alongside Brazil and ahead of fellow EU candidate nations Bosnia and Herzegovina and Turkey. Meanwhile, Russia continues to lag far behind, having dropped down a further two places in the 2023 index to occupy 141th position with just 26 points.

This year’s result is recognition for Ukraine’s ongoing anti-corruption efforts since the 2014 Revolution of Dignity. On the eve of Ukraine’s landmark pro-democracy uprising, the country languished in 144th place in Transparency International’s annual ranking. Following the Revolution of Dignity, the Ukrainian authorities have taken a number of steps against corruption including establishing a new anti-corruption architecture, embracing digitalization, and conducting ambitious reforms in key sectors such as government procurement, banking, and energy. Success has often been patchy, but the overall picture is one of unmistakable improvement that has allowed Ukraine to climb forty places in the anti-corruption index over the past decade.

Ukraine’s most recent progress is all the more notable as it has taken place amid the existential challenges of Russia’s ongoing invasion. While this has necessitated a range of wartime governance and security measures, anti-corruption efforts have continued. “The active work of Ukraine’s anti-corruption and other public authorities resulted in a growth in the 2023 Corruption Perceptions Index even during the full-scale war,” Transparency International acknowledged.

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Transparency International is not the only international body to positively assess wartime Ukraine’s anti-corruption credentials. The fight against corruption has long been a key issue in relations between Kyiv and Brussels, and has traditionally been viewed as an obstacle to further European integration. However, Ukraine’s reform efforts since the start of Russia’s full-scale invasion have helped convince European leaders to grant the country EU candidate status and begin official negotiations on future membership.

Speaking last summer, European Union Commission President Ursula von der Leyen singled out Ukraine’s efforts to advance the country’s anti-corruption agenda despite facing a uniquely challenging wartime environment. “I must say it is amazing to see how fast and determined Ukraine is implementing these reforms despite the war,” she commented. “They are defending their country and reforming.”

These positive appraisals by Transparency International and the European Union undermine the credibility of attempts by Russia and others to portray Ukraine as hopelessly corrupt. For many years, Kremlin officials and regime propagandists have routinely depicted Ukraine as plagued by endemic corruption. This has been an important element of Moscow’s efforts to discredit Ukraine’s democratic transition, deter international support, and even mute criticism of Russian intervention.

Since the start of the full-scale invasion, Vladimir Putin himself has often referenced the alleged excesses of Ukrainian corruption in his public speeches. In November 2023, he declared that “corruption in Ukraine is unmatched anywhere in the world.” This ignores the inconvenient reality that Transparency International actually rates Putin’s Russia as significantly more corrupt than Ukraine.

The argument that Ukraine is simply too corrupt to support has also entered the mainstream in the United States, where it is often repeated by opponents of further US military aid. These objections continue, despite unprecedented levels of institutional oversight and successive Pentagon probes confirming no evidence of corruption or the misuse of weapons.

Across the Atlantic, Russia’s few remaining friends in the EU have made strikingly similar claims regarding Ukrainian corruption. In December 2023, Hungarian Prime Minister Viktor Orban branded Ukraine as “one of the most corrupt countries in the world” while arguing against Kyiv’s further EU integration. Orban, who is regarded as Putin’s closest European ally, certainly speaks with authority when it comes to corruption. His own country, Hungary, occupied last place among EU member states in this year’s Transparency International ranking.

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In a sense, Ukraine is currently paying the price for the unenviable reputation it earned during the first few decades of independence, when corruption throughout state institutions was a far more pervasive problem than it is today. It is no accident that Ukraine’s two post-Soviet revolutions in 2004 and 2014 were both driven largely by public exasperation over widespread corruption, with millions of Ukrainians taking to the streets to vent their anger. Despite undeniable signs of progress over the past ten years, examples of institutional corruption continue to emerge, keeping the old cliches alive.

With Ukrainians now fighting for national survival and heavily reliant on international support, attitudes toward corruption have hardened further. This is fueling a climate of heightened scrutiny that has led to a series of high-profile scandals since the onset of Russia’s full-scale invasion. In summer 2023, President Zelenskyy dismissed dozens of regional military enlistment officials on charges of bribery. Perhaps the most prominent scandal involved former Ukrainian Defense Minister Oleksiy Reznikov, who was forced to resign following claims of corruption within the ministry. Most recently, Ukraine’s State Security Service detained five people accused of conspiring with Defense Ministry officials to embezzle $40 million meant for the purchase of arms.

While these recent corruption scandals demonstrate that Ukraine still has a long way to go, it is worth emphasizing that they only came to light thanks to the investigative efforts of Ukraine’s own state organs and the country’s vibrant civil society. This vigilance should come as no surprise. After all, nobody is more conscious of their country’s corruption problems than Ukrainians themselves.

There is no doubt that today’s Ukraine continues to face serious corruption challenges. However, depictions of the country as irredeemably corrupt are false and misleading. The real story here is of a nation steadily emerging from centuries of imperial oppression and decades of dysfunction, with the current generation of Ukrainians determined to rid themselves of a corruption culture that is one of the most unwelcome legacies of this troubled past. Indeed, the fight against corruption is widely recognized by Ukrainians as an essential element of their country’s transformation toward a European future.

This year’s Transparency International ranking is a timely reminder that Ukraine is actually making meaningful progress in its historic struggle against corruption. While much remains to be done, the country is clearly moving in the right direction. Ukraine’s international partners are right to expect maximum accountability, but there are currently no grounds for abandoning Ukraine based on claims of corruption that are both exaggerated and outdated.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

James Batchik — Tue, 19 Dec 2023 20:52:47 +0000

The European Council’s recent decision to open accession negotiations with Ukraine was a momentous moment both for Kyiv and the European Union. Now the serious work begins.

Ukraine’s EU story is a decade in the making. Ukraine’s European aspirations were a driving factor behind the 2013-14 Revolution of Dignity. Since Russia’s full-scale invasion began in February 2022, Ukraine’s EU integration has received a much-needed push, with both Ukrainian and EU leaders treating the country’s EU bid with fresh seriousness. The European Council’s green light for the opening of accession negotiations means Ukraine has now taken a major step closer to realizing its EU ambitions.

The coming negotiations to bring Ukraine into line with EU standards and regulations will be a technocratic and political feat. The European Commission, the EU’s executive, will be the contact throughout this process. The European Council, made up of the EU’s twenty-seven member states, must formally approve Ukraine’s progress.

Membership in the EU is not a foregone conclusion for Ukraine. On the contrary, Kyiv will now have its work cut out. Ukraine has already implemented a series of reforms including to its judiciary, minority rights, and anti-corruption legislation to meet European Commission conditions before the opening of membership talks, but that was just the beginning. Ukraine will now need to align with the EU’s vast body of rules and procedures, known as the acquis communautaire or acquis for short. These cover everything from economic and trade policies, public finances, rule of law, education, and tax policies to energy infrastructure and agriculture rules.

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Following the recent Council Summit, and once Ukraine fulfills the final measures set out in the Commission’s recommendations, the European Commission will draft a framework for negotiations for approval by the Council. Negotiations are broken down into thirty-five distinct categories or “Chapters.” These chapters make up the EU’s acquis from judiciary and fundamental rights to the free movement of goods and intellectual property, energy and transport policy, and so on.

Once the Commission and Council are satisfied Ukraine has implemented the necessary reforms to close each chapter one by one, the Commission will generate a final recommendation for Ukraine to become a member. The Council and the European Parliament must then approve, with the final step coming when all existing member states sign and ratify a treaty welcoming Ukraine to the EU.

While tedious, these rules are critical to the EU’s basic functioning. The building blocks of the EU, such as the single market, require shared rules across all members to function and ensure a level playing field. The EU must be able to facilitate seamless cross-border trade and movement, for example. The same logic applies to rule of law and political stability, which impact the integrated economies and societies of other EU members.

If the process sounds long and burdensome, that’s because it is. Membership negotiations have usually taken around a decade for successful candidates in the past. Croatia, the last successful candidate to join the bloc, took ten years. Ukraine’s case is new territory. There has never been a candidate that is fighting a war for survival as it pursues these reforms, which brings up questions about how enlargement will work.

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There is also a political element that adds uncertainty to Ukraine’s accession process. All decisions by the European Council during this process require unanimity, thereby giving each member state a veto at any stage. Should any member feel dissatisfied for any reason, even for issues not related to a candidate country’s reform efforts, they may unilaterally block the process.

Politicking around enlargement has happened before. Greece and Bulgaria have both separately used vetoes on North Macedonia’s accession due to domestic politics and bilateral spats. Countries have also delayed enlargement before due to concerns over the EU’s internal functioning. For Ukraine, this was already on full display as leaders dreamed up a theatrical solution around Hungary’s veto of Ukraine’s accession negotiations. There are also concerns over the implications of Ukrainian membership for domestic priorities including Poland’s agricultural sector. The politics of enlargement have contributed to recent enlargement fatigue, which has specifically plagued candidates from the Western Balkans, who have been relegated to the EU’s waiting room for decades.

The earlier reluctance of EU members to embrace further enlargement also speaks to another potential wrinkle in Ukraine’s EU bid: Internal EU reform. EU member states are hotly debating the future functioning of the EU including, for example, the use of unanimity in critical decision-making. This reform process will directly impact Ukraine’s accession. With some members pushing for internal reform before taking on new members including Ukraine, Kyiv’s bid looks to be increasingly vulnerable to political factors not related to its own reforms.

Finally, without reforms, Ukraine’s size and level of development also risks capsizing the EU’s internal transfer system of agricultural and structural subsidies. This could transform member states that currently benefit from EU funds into net contributors to the budget of a union that includes Ukraine.

The timeline of Ukraine’s EU integration will depend both on Ukraine and the EU’s ambitions. Ukraine will fundamentally control the pace and seriousness of its reforms. The EU for its part will have to find a way to square the circle of maintaining momentum on Ukraine’s enlargement effort while not letting Ukraine’s EU aspirations get bogged down in internal squabbles or caught up in debates about EU reform.

Despite these challenges, Ukraine’s EU progress remains hugely significant. It is inspirational for the people of Ukraine, who remain determined to chart their country’s free and democratic trajectory, and for Europe as a geopolitical actor, pushing to secure Ukraine’s place in the West. Getting there will be a tall, but necessary, order.

James Batchik is an assistant director with the Atlantic Council’s Europe Center.

Denys Maslov, Oleksandr Vasiuk — Thu, 07 Dec 2023 19:57:56 +0000

The full-scale Russian invasion of Ukraine has transformed the international environment in a way rarely witnessed since the end of the Cold War. It has mobilized the entire democratic world, while also underlining the importance of a free and independent Ukraine for the future of global security.

With Russia’s invasion now approaching the two-year mark, it is increasingly clear that the outcome of the war will shape the geopolitical climate for decades to come. Ukraine is set to play a key role not only in the stability of Eastern Europe, but also in terms of global food and energy security.

If it is to meet the historic challenges that lie ahead, Ukraine must be able to defend itself. This will require substantial and sustained military aid from the country’s partners. In addition to this immediate focus on strengthening security, it is also vital for Ukraine to continue pursuing reforms in order to counter corruption, bolster national institutions, and consolidate the country’s democracy.

Nothing on Ukraine’s reform agenda is more important than judicial reform. Indeed, it is no exaggeration to say that Ukraine’s future prosperity and international position depend on the effective reform of the country’s legal system. This is well understood in Kyiv’s corridors of power. Against the backdrop of Russia’s ongoing invasion, Ukraine continues to work with international partners to implement effective rule of law reforms.

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Judicial reform has been consistently close to the top of the government’s agenda ever since President Zelenskyy was first elected in 2019, and has remained so in the current wartime environment. Progress has included fulfilling the conditions set by the European Commission regarding the composition of the High Council of Justice and the High Qualification Commission of Judges. Changes have also been introduced to the selection procedure for Constitutional Court judges in line with Venice Commission recommendations.

As part of efforts to counter the threat of politically motivated appointments within the Ukrainian justice system, Ukraine has taken the unprecedented step of involving the country’s international partners in the selection of members to serve on reformed judicial bodies. For example, selection committees have featured the participation of senior British and American officials with extensive experience in the UK and US justice systems. Following months of consultations and negotiations with the Venice Commission and the European Commission, legislation has also been adopted to create an advisory group of experts including international representatives charged with selecting potential judges for Ukraine’s Constitutional Court.

Advancing Ukraine’s unprecedented judicial reform agenda requires a careful balance between achieving meaningful change, protecting the rights of every Ukrainian citizen, and maintaining maximum transparency. Measures are in place to ensure Ukraine’s international partners are informed of any new initiatives, with the G7 group of ambassadors paying particularly close attention to developments and offering positive assessments of recent progress.

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While wartime advances in Ukraine’s judicial reform agenda are encouraging, many major challenges remain. For example, there are currently almost two thousand vacancies for judges in Ukraine. It is absolutely critical to fill these vacancies with the best candidates, who must be subjected to rigorous and competitive selection procedures that scrutinize both their professionalism and their integrity. The future of Ukraine’s judicial system depends on it.

As they defend their statehood and national identity, Ukrainians are acutely aware that they are writing a fresh chapter in the country’s history. Together with an international coalition of partner countries, they are building a new Ukraine that is already emerging as a trusted and valued member of the democratic world. A firm commitment to establishing the rule of law is absolutely foundational to this process.

Despite the uniquely challenging circumstances created by Russia’s ongoing invasion, there is currently reason for cautious optimism regarding the further reform of the Ukrainian legal system. For arguably the first time in the history of independent Ukraine, all the necessary elements are now in place to achieve lasting judicial reform. These include the requisite political will on the part of both president and parliament, along with the active participation of Ukrainian civil society and expert support from the country’s international partners. This helps make continued reform progress possible, even amid Europe’s biggest armed conflict since World War II.

Denys Maslov is a member of the Ukrainian Parliament with the Servant of the People party and head of the Ukrainian Parliament’s Committee on Legal Policy. Oleksandr Vasiuk is a member of the Ukrainian Parliament with the Servant of the People party and a member of the Ukrainian Parliament’s Committee on Legal Policy.

Russia’s use of force has caused untold suffering but it has failed to reverse Ukraine’s historic pivot toward Europe. On the contrary, Ukrainian public support for European integration has surged over the past decade to record highs, while enthusiasm for closer ties with Moscow has evaporated.

Political developments have mirrored this historic shift in Ukrainian public opinion. In summer 2014, new Ukrainian President Petro Poroshenko reversed his predecessor’s rejection and signed a landmark association agreement with the EU. Following the successful implementation of anti-corruption reforms and other measures to bring Ukrainian legislation more into line with European Union norms, Ukraine secured visa-free EU travel in 2017.

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In the first days of Russia’s full-scale invasion, Ukrainian President Volodymyr Zelenskyy officially applied for EU membership. The move was a clever piece of political theater that drew attention to Russia’s war aim of derailing Ukraine’s Euro-Atlantic integration and robbing the country of its independence. European leaders certainly seemed to recognize the significance of the moment. Four months later, they officially granted Ukraine EU candidate nation status.

Candidate status was accompanied by a list of seven recommendations Ukraine needed to address before it could be considered for full EU membership. Tasks included judicial reform and progress in the fight against corruption along with measures to tame the influence of oligarchs, improve press freedoms, and protect national minorities.

Ukraine’s progress over the past year on these seven points was deemed sufficient by the European Commission to recommend the opening of official membership talks. This progress included steps to reform appointments within the judiciary and measures targeting graft. Meanwhile, new legislation has imposed restrictions on the ability of oligarchs to influence Ukrainian politics. The European Commission responded by stating that Ukraine had implemented “important measures to curb the oligarchs’ grip on public life.”

Significant challenges remain. The recent European Commission report recommending membership talks called on Ukraine to further revise existing legislation protecting the rights of national minorities. This has long been a point of contention, particularly as EU member state Hungary has stated its determination to block Ukraine’s EU integration until its demands regarding Ukraine’s Hungarian minority are met.

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While multiple obstacles lie ahead, Ukraine’s reform efforts have drawn praise from senior EU officials in Brussels. “Ukrainians are deeply reforming their country, even as they are fighting a war that is existential for them,” European Commission President Ursula von der Leyen said in a recent address. “Ukraine has completed well over 90 percent of the necessary steps that the Commission set out last year in its report.”

Ukrainians are now looking forward to the next EU summit in December and are optimistic that European leaders will back the opening of official accession negotiations. This would be a genuine geopolitical breakthrough for the country, although it would not guarantee Ukraine’s future place among EU member states. Advancing toward membership would still take time, but the start of talks would provide some very welcome momentum to Ukraine’s European integration drive, while also acknowledging the considerable progress the country has made toward meeting the reform requirements set out by the European Union in summer 2022.

Ukraine has defied expectations by implementing ambitious and comprehensive reform measures in the most extreme of wartime conditions. This reflects Ukraine’s commitment to a European future and underlines the importance of EU integration for Ukrainians at a time when they are fighting for their country’s survival.

The Ukrainian authorities have made clear that they view EU membership as a strategic priority and are fully committed to pursuing this goal, even while defending themselves against Russia’s ongoing invasion. It is now up to EU leaders to make history in the coming weeks by officially opening accession negotiations.

Mark Temnycky is a nonresident fellow at the Atlantic Council’s Eurasia Center.

The EU decided to grant candidate status to Ukraine in June 2022, shortly after the beginning of Russia’s full-scale invasion of Ukraine. This decision galvanized the Ukrainian government to meet the initial steps outlined in the membership application adjacent to approving candidate status.

The Commission report published as part of the overall Enlargement Package outlined Kyiv’s considerable efforts to address the initial application criteria. Ukraine has, for example, cracked down on several high-profile officials accused of bribery and embezzlement and expanded specialized anti-corruption agencies. It has also moved forward on judicial selection and governance reform, and it has made progress in aligning Ukrainian law to the full body of EU law, or the acquis.

Regarding the progress Ukraine has made, European Commission President Ursula von der Leyen said that “Ukraine has completed well over 90 percent of the necessary steps that [the Commission] set out last year.”

While formally recommending that Ukraine advance to accession negotiations, the report also outlined several areas that require improvement. Though Ukraine has made great strides on decentralization, public administration reform, and laws ensuring freedom of expression and fundamental human rights, there is still a long way to go in reforming the courts, tackling systematic corruption, and preparing to integrate into the EU common market.

What’s next?

Though the report outlined areas that need continued improvement, the Commission recommended that the European Council, the second executive arm consisting of the heads of state of the twenty-seven EU member states, formally open accession negotiations.

The first opportunity for the Council to back the Commission’s plan toward Ukraine’s accession will be at an upcoming summit of EU leaders in Brussels on December 14 and 15. Following unanimous approval from the European Council, the EU will formally open negotiations.

Even as the Commission signaled that it is ready to begin preparatory work on Ukraine’s accession following the Council’s approval in December, it is worth noting that the actual start of the negotiations is dependent on Kyiv’s progress on key measures outlined in the report. These include steps toward limiting oligarch influence and establishing the legal framework and implementation of laws protecting the rights of national minorities, media, and education. The Commission would then report on the progress of these measures in March 2024 and finalize the negotiating framework pending satisfactory development.

Though some consider a smooth approval to open these negotiations in December nearly inevitable, concerns remain over continued resistance from Hungary to greenlighting accession negotiations amid a deepening divide between Budapest and Brussels. There is also concern about the extent to which EU and international attention has shifted from Ukraine to the Israel-Hamas conflict.

What are the stakes?

Failure to open negotiations as expected in December risks putting Ukraine in uncertain territory heading into 2024 and into the third year of Russia’s full-scale invasion.

The symbolism of 2024 is also important—it will mark a decade since the beginning of Russia’s invasion of eastern Ukraine and the February 2014 Revolution of Dignity that saw the ousting of pro-Russia former President Viktor Yanukovych. Hundreds of thousands of Ukrainians marched throughout Ukraine from November 2013 to February 2014 in the Euromaidan protests against Yanukovych’s turn toward Russia and sudden withdrawal from closer integration with the EU.

Many Ukrainians—hoping for a prosperous, free, and independent country—marched draped not only in the blue and yellow of the Ukrainian flag, but also in the flag of the EU.

More than 90 percent of Ukrainians support their country’s membership in the EU by 2030, according to a poll earlier this year by the National Democratic Institute.

Ukraine’s continued commitment toward reform—even as significant portions of the country remain under continuous attack or occupation by Russian forces—has more than proved Ukraine’s dedication and will in aligning itself with the EU and the West.

A decision this December would not only represent an important vindication of Kyiv’s decade-long effort to join the EU, but also cement the EU’s continued commitment to Ukraine’s rightful place in Europe.

Aleksander Cwalina is a program assistant for the Atlantic Council’s Eurasia Center.

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Historic progress: Ukraine receives green light for EU membership talks

Peter Dickinson — Thu, 09 Nov 2023 21:21:36 +0000

The European Commission has this week recommended opening EU membership negotiations with Ukraine. The recommendation, which featured in the Commission’s annual enlargement report, was accompanied by a number of conditions regarding further progress on issues including minority rights and the fight against corruption. The stage is now set for official confirmation when EU leaders gather in December.

The European Commission’s decision was welcomed in Kyiv as a major milestone in Ukraine’s bid to join the European Union. Ukrainian President Volodymyr Zelenskyy toasted the news as “a strong and historic step that paves the way to a stronger EU with Ukraine as its member.” Meanwhile, the Ukrainian Foreign Ministry posted that the country was now returning to its European roots.

The start of accession negotiations does not mean Ukraine is now guaranteed EU membership, of course. On the contrary, a long road lies ahead marked by numerous bureaucratic obstacles and demands regarding Ukraine’s continued adoption of EU norms. Nevertheless, this week’s green light for membership talks represents genuinely historic progress at a time when Ukrainians are fighting to defend their independence and their right to choose a European future.

The ongoing Russian invasion of Ukraine began in February 2014 in the immediate aftermath of Ukraine’s Euromaidan Revolution, which saw millions of Ukrainians protest against a Kremlin-backed turn away from European integration. Since the onset of Russian aggression almost ten years ago, Ukrainian public support for EU membership has surged to unprecedented highs, while enthusiasm for a return to the Russian sphere of influence has dwindled to negligible levels.

The Atlantic Council’s UkraineAlert service asked a range of Ukrainian politicians and academics for their thoughts on what the European Commission’s recommendation means for today’s Ukraine and for the country’s future.

Yulia Svyrydenko, Ukraine’s First Deputy Prime Minister and Minister of Economy: We consider ourselves part of the European Union family and are sincerely grateful for this week’s European Commission decision to recommend accession talks. This is just one of many important steps, but it is a significant signal which gives us hope.

There is still a lot of joint work ahead to confirm Ukraine’s position as a fully-fledged member of the European family and to make the Ukrainian economy part of the single European market. To achieve this, we will continue working on a wide range of reforms. This includes the reform of public administration, justice systems, the fight against corruption, and economic reforms. Ukraine is on a path toward great improvements in the coming years that I hope will deepen the country’s EU integration.

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Kira Rudik, Ukrainian MP, leader of Golos party: The European Commission’s recommendation to open EU accession negotiations with Ukraine is not just a formal green light for our path toward EU membership. It is also of huge importance for every Ukrainian. This decision is a source of motivation for our defenders; it is essential for them to know that while fighting continues along the front lines of the war with Russia, many people in the rear are actively working to bring us closer to our goal as a nation.

This is a chance to secure a democratic European future for our children, many of whom have become used to studying and sleeping in bomb shelters. Ultimately, this is an opportunity and at the same time a challenge for all of us as a state. When I am asked what the journey toward EU membership means for Ukrainians, I usually say that we are on our way home.

Lisa Yasko, Ukrainian MP, Servant of the People party: The European Commission decision is a crucial step that confirms the EU is serious when it speaks of Ukraine as a future member. I believe this decision is also highly significant for the EU itself, as Ukraine’s European integration has the potential to become a success story that will strengthen the image of the entire bloc.

The allocation of 50 billion euros is a further clear signal that Europe is ready to partner with Ukraine right now to achieve the country’s European future. I am particularly happy to see that our European partners are objective in their approach toward Ukraine and recognize our achievements including progress in constitutional justice, anti-corruption efforts, and the fight against money laundering.

It is important to stress that the European Commission’s report also contains recommendations for further steps in the reform process, such as rebooting the Bureau of Economic Security, developing a new Customs Code, and criminalizing smuggling. This is not just a question of having the requisite political will to continue these reforms; it is an existential issue for all Ukrainians. We must now keep working to bring EU membership closer, because Europe without Ukraine is unthinkable and Ukraine is unthinkable without Europe.

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Oleksiy Goncharenko, Ukrainian MP, European Solidarity party: It has now been almost 10 years since the Revolution of Dignity when Ukrainians first declared that Ukraine belongs in Europe. We have already proven ourselves by protecting democratic values on the battlefield. We are paying the highest price possible for our right to be a democratic and free country.

Support for EU integration within Ukrainian society has never been stronger than it is today. We are grateful that the European Commission recognizes our efforts and recommends the start of accession talks. This decision has sent an extremely valuable signal that Ukraine is part of Europe. The European Commission has confirmed that it is not a question of “if” but “when” Ukraine will join the EU.

At the same time, we understand that there is still much work to be done on the path toward future membership. Upcoming EU summits in December 2023 and next year will provide a better understanding of what the next steps will be. We have already demonstrated that we are capable of carrying out reforms in wartime conditions and have no intention of stopping. On the contrary, we will proceed with reforms for the sake of our country’s future development and will continue to advance toward the goal of EU membership.

Volodymyr Dubovyk, associate professor, Odesa Mechnikov National University: The European Commission’s recommendation is good news for Ukrainians in general. It confirms that Ukraine belongs in the European family of nations.

This decision is important feedback that recognizes Ukraine’s strenuous efforts to meet key EU membership criteria, including requirements that have been outlined during the extreme wartime circumstances of the past twenty months. It directs Ukraine to conduct further reforms while offering the clear incentive of a realistic EU membership perspective rather the vague talk of future integration. This should give new impetus to meaningful change in Ukraine.

The start of accession talks will deepen ties between the EU and Ukraine, including in terms of trade relations. This might help resolve certain tensions with some of Ukraine’s neighbors. EU security assistance will also be enhanced, with the EU becoming an even more important partner in this sphere than at present. In other words, this is a sign of deepening commitment by both sides. Crucially, it is also a very welcome development for Ukrainians living with the reality of an existential war, which proves that their fight is not in vain.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

In its pursuit of sustaining financial stability after years of enduring years of diplomatic and economic isolation, the Assad regime has transformed many war-torn areas into the world’s cardinal captagon laboratories. Nour highlighted how this psychoactive drug, estimated as a multibillion-dollar chain, has, on one hand, empowered the Assad regime to maintain access over foreign current assets amidst international sanctions, and on the other, bolster its smuggling network which operates across 17 countries to guarantee the drugs’ export throughout Europe and the Gulf. Moreover, the Iran-backed Hezbollah has proved as a successful partner for the Assad regime, as it oversees both local production and packaging of captagon. Notably, unchecked corruption facilitates the exploitation of public infrastructure, such as the port of Beirut, for exporting captagon without government surveillance.

Furthermore, the Assad regime’s narcotic distribution infrastructure has become a top health and security threat to neighboring Arab states but also a growing concern to the United States. In an attempt to curtail this threat, Arab states have resorted to diplomatic reproachment by readmitting the Assad regime into the Arab League earlier in May. However, the United States is pursuing a distinct approach through an inter-agency strategy that aims to disrupt and dismantle narcotics production and trafficking, along with affiliated networks connected to the Assad regime.

Keynote remarks

In June, the US unveiled its interagency strategy for combating captagon trafficking. In his speech, Goldrich emphasized this strategy’s overarching lines of efforts:

i. To support law enforcement agencies involved in investigating captagon-related activities
ii. To utilize economic sanctions and other tools to disrupt and dismantle captagon networks.
iii. To aid regional partners in combating drug trafficking and consumption. The United States is providing security assistance to Jordan and Lebanon
iv. To build coordinated approaches with multilateral institutions in order to strengthen the global response against captagon

Although captagon is neither produced nor widely available in the US, Goldrich highlighted the deep concern about its impact on the health, economy, and social welfare of communities in the Middle East. In July, Secretary Blinken initiated a global coalition aimed at combating the rising threat of synthetic drugs, which pose a critical threat, not only as a leading cause of mortality among Americans aged 18 to 49, but also a significant concern in regions like Africa, the Middle East and Asia.

Regional impact, challenges, and trends

The captagon trade should not be considered in isolation when assessing its ramifications on local security, public health, and the economic landscape in Syria. Rather, Rose emphasized the transnational and transregional threat of the drug. The captagon trade targets established markets in the Gulf, while concurrently attempting to create novel consumption and destination markets. Rose mentioned that there has been credible evidence of captagon trafficking and production that extends beyond Syria into countries such as Libya, Chad, Nigeria, Netherlands, and Germany.

Rose highlighted two challenges in addressing the captagon crisis. The first consists of the lack of a precise definition of captagon’s composition. The latter has evolved over time, departing from its original formula prevalent in illicit markets during the 1960s to 1980s. Presently, it is comprised of a mélange of interpretations of a synthetic amphetamine-type stimulant, sometimes devoid of any amphetamine. In April 2022, the New Lines Institute reported that captagon typically contains amphetamine, sometimes in minuscule quantities, and occasionally comprising a substantial portion of up to 45-47% in the form of amphetamine metabolites per pill. Also, captagon may encompass caffeine, quinine, and sometimes toxic levels of metals such as copper and zinc.

Notably, there is a burgeoning trend of pseudoephedrine potentially being used in captagon production. Rose noted Syria’s consistent demand for pseudoephedrine since the onset of the Syrian war, underlining the paramount role this precursor material plays in the context of captagon production. She also acknowledged that there may be other various reasons to account for this, yet Syria remains one of the largest importers of pseudoephedrine, despite the pharmaceutical industry’s collapse. Although this does not definitively establish pseudoephedrine as the primary input of captagon production, the mounting evidence does lend credence to the notion that it plays a significant role. This confluence of factors strongly indicates a substantial and intricate link between pseudoephedrine and the mass production of captagon by the Assad regime.

Secondly, the participation of the Syrian regime in discussions regarding the containment and prevention of captagon production and trafficking, particularly in the context of Interpol’s efforts, warrants scrutiny. Interpol plays a pivotal role in combating illicit trade including captagon. Operation Lionfish, as highlighted by Rose, focuses on regular seizures of captagon, meth, crystal, and cocaine. Interpol also actively fosters the exchange of regional information and intelligence among stakeholders. However, as of June 2021, Interpol’s persistent attempts to incorporate the Syrian regime within regional discussions – despite evidence of the regime’s involvement in captagon production and trafficking — has compromised Interpol’s creditability and ability to address interdiction. As Rose succinctly phrased it, “It’s like giving the cartel a seat at the table.”

A global supply chain network

Idler outlined five key points through which captagon is intricately embedded within the global illicit supply chain networks. First, captagon does not exist within a vacuum; it intricately intersects with a diverse array of illicit flows, including the trafficking of weapons, humans, and various narcotics. This interconnection is exemplified by the case of precursor chemicals vital for captagon production, as previously noted by Rose. Second, the management of these supply chains is multifaceted. At each stage, from material sourcing to production, transportation, trafficking, and the final market distribution is overseen by distinct actors that are globally connected. The third aspect reveals the instrumental role played by intermediaries or brokers, who operate at the local, regional, and global levels. They facilitate the coordination and unification of all the different phases of the supply chain. Fourth, the routes utilized for captagon trafficking are not confined to physical locations; they also encompass the requisite expertise and knowledge needed to execute these operations. Also, these trafficking nodes are not limited to one commodity. Lastly, illicit markets are interconnected, irrespective of the varying priorities given to different substances in different countries. Meaning, that a shock to one market can reverberate globally across other markets, prompting shifts in production strategies. For instance, while the United States places greater emphasis on fentanyl, a shock in the fentanyl market can lead consumers to seek alternatives, thereby increasing the demand for other markets, including captagon. Idler anticipates that captagon could be the next substance to be exploited by organizations like the Mexican cartels, furthering their endeavors to consolidate power and exacerbating the security risks already present.

A Global Health Crisis

For her part, Dribben explained an often under-researched and under-reported perspective: global health. Captagon should be an American priority because it can easily become a prominent drug in America causing major health implications. Like Fentanyl and Oxycontin, of which America already has a serious addiction problem, captagon is a synthetic drug that requires little knowledge and equipment to produce. She noted that even if captagon trade was halted and addicts were cut off, there is no protocol for dealing with the addiction. In Saudi Arabia, an estimated 40% of youth are addicted to captagon but the region’s medical treatment facilities are not well-equipped to treat drug addiction due to the way it is stigmatized as a criminal problem and not a health one. The American medical community is beginning to take note of captagon, and this attention will hopefully drive greater constituent interest in Congress. There is also increased global engagement, especially from the United Kingdom and the European Union, which is a promising step forward.

Finding Accountability

Tabbara focused on accountability methods for the Syrian Assad Regime. He explained that the captagon crisis is just one piece in the larger puzzle of the Assad Regime’s human and legal rights abuses, but that it can perhaps offer an entry way into taking accountability measures for other crimes. Trials over the illegality of captagon production and export in the International Criminal Court are one possible avenue for accountability. The Syrian Forum’s legal team has also researched existing legislative frameworks that can hold individuals and companies with associations and dealings with the captagon trade accountable here in the United States. The research found that the existing legal frameworks fall short of providing the opportunity for criminal prosecution of those who are involved in the captagon criminal networks. This type of accountability is also greatly important for US national security. Research has shown that both Hezbollah and Iran are directly involved in the captagon trade. A major faciliatory player in captagon trade is the 4th division, an Iran sponsored division of Syria’s military led by Bashar Al Assad’s brother, Maher Al Assad. Tabbara also explained that the Arab world already lost one avenue for accountability when they decided to pursue normalization with the Assad regime and re-admit it into the Arab League. This was a very important negotiating card that was given away for empty promises. The Arab world is now realizing that it is not a question of willingness for Assad to stop captagon and other illicit activities, but that Assad is unable to deliver and to keep order in his country.

The Role of Congress and the Executive Branch

Frost explained that Hill has been at the forefront of the United States’ legislative fight against captagon as he has introduced two important Acts on the topic: the Illicit Captagon Trafficking Suppression Act to sanction those involved in the production and trafficking of the drug, and the Countering Assad’s Proliferation Trafficking And Garnering of Narcotics (CAPTAGON) Act. The latter will allow the State Department and Treasury to sanction other actors in this trade, and it also grants power to the administration to designate political organizations, militias, and state/non-state actors involved in drug trafficking. Frost explained that these important bills were only possible because of the grass–roots support Representative French Hill receives from his district on this issue. The current administration is also supportive of fighting captagon trade as evident by Secretary Blinken’s recent speech in front of the House Foreign Affairs Committee on captagon and normalization with Assad.

Takeaways and Recommendations

1. Goldrich recommends seeking innovative strategies to address drug demand and consumption, emphasizing that Global Reduction Programs could also benefit US partners in the region.
2. Moving forward, Betsy urges educating and fostering support from the medical community at a grassroots level. Their involvement is integral to developing medical protocols for captagon addiction that can be used throughout the world, but especially in the region. The United States must also designate and recognize the actors involved in captagon trade as those are not always obvious.
3. Goldrich urges sustained coordination on sanctions with the United Kingdom and European partners to exert pressure for accountability regarding the Assad regime’s abuses, and to constrain the regime’s ability to profit from the conflict in Syria.
4. Rose underscores the critical importance of understanding the composition of captagon for law enforcement, intelligence, and the healthcare sector.
5. Idler proposes that the United States proactively takes measures to prevent the exploitation of captagon by organizations like the Mexican cartel. Therefore, it is imperative to channel international efforts toward disrupting the captagon trade network and the associated power dynamics to safeguard global security interests.
6. Yasser recommends filling the research gaps that could allow for the creation of stronger legal frameworks under which US based companies and individuals can be held accountable for their involvement in illicit captagon trade and networks. Before any legislation is written, there needs to be an analysis of the jurisdictional limitations of the United States on captagon including money laundering operations, supply chain operations, the use of the US dollar in captagon trade, and extradition of foreign nationals. Research on the role and extent of involvement of Hezbollah, Iran, and Iranian militias in captagon trade also must be greatly expanded upon. In order for this research to be effective, there must be open communication between the United States and its allies like Jordan, Saudi Arabia, and the United Arab Emirates. When those make arrests related to captagon, it is extremely important for them to hold public prosecutions, so that the public is aware of the risk and consequences of involving themselves with captagon.
7. Dylan suggests that the next step for Congress should focus on passing an anti-normalization act with the Assad regime, which would help hold corporations accountable for illicit interactions with the Syrian government – noting the exemptions provided for humanitarian aid. Congress can also find ways to hold individuals involved with captagon who are outside of Syria accountable through existing laws and extradition treaties.

The post Addressing the captagon crisis in MENA: Strategies & Challenges appeared first on Atlantic Council.

The political factors behind China’s disappearing leaders

Mark Parker Young — Fri, 20 Oct 2023 15:42:45 +0000

Chinese Communist Party (CCP) General Secretary Xi Jinping has shaken China’s military and foreign affairs establishments in the past two months by abruptly replacing several senior military officers and China’s minister of foreign affairs. The removals were all the more surprising because Xi had promoted many of these same officials to lead their organizations less than a year earlier. A close look at the officials involved suggests that a variety of personal and institutional factors contributed to their downfall, but the disruptive impact of the sudden disappearances indicates underlying mistakes and misjudgments on the part of Xi and the personnel apparatus he oversees.

The recent removals suggest that Xi has approved prosecutions of several discrete pockets of corruption and misconduct rather than a repeat of the sweeping and interconnected purges of his first term. The senior officials involved had crucial roles within their respective military and civilian bureaucracies, but none was part of Xi’s core apparatus of political control.

Interpreting patterns among ousted officials

The reshuffles in the People’s Liberation Army (PLA) constitute its most significant internal upheaval since 2017. Recent anti-corruption investigations appear to be radiating outward from the traditional locus of military corruption: procurement and logistics. In the last two months, investigators have reportedly detained Minister of National Defense Li Shangfu, Rocket Force Commander Li Yuchao, Rocket Force Political Commissar Xu Zhongbo, and several of their deputies. Li Shangfu served from 2017 to 2022 as chief of the PLA’s armaments and procurement department and the Rocket Force is an extremely capital-intensive service that has expanded rapidly in the past decade, likely affording numerous opportunities for graft. Xu also previously served as political commissar of the Joint Logistics Department and is the latest in a long line of its former leaders to fall under suspicion. The new Rocket Force leaders have no prior experience with the force and its incoming political commissar significantly outranks the new commander in the CCP hierarchy, signaling Xi’s determination to uproot their predecessors’ personal networks and reimpose discipline.

By targeting procurement-related organs, Xi has launched a fresh campaign against one of the two military institutions most susceptible to corruption; the other is the political work system and the network of political commissars embedded at every level of the PLA. If prosecutions were to expand beyond procurement-linked officers to implicate broader networks within the Central Military Commission (CMC) Political Work Department, then the disruptive impact would likely spread across the PLA.

The circumstances of Foreign Minister Qin Gang’s removal remain unclear, but they are more likely to stem from personal misconduct and idiosyncratic factors that have a narrower impact on the national security establishment. Qin’s own network within the Ministry of Foreign Affairs (MFA) may be somewhat narrow because of his unusual and rapid ascent. MFA officials also have limited influence over major contracts and assets, so presumably less direct opportunity for large-scale graft. If Xi decides to publicly charge Qin with a broad range of offenses, however, investigators may find grist in his prior service in the MFA Protocol Department, where he would have been responsible for the disposition of official gifts, travel, and hosting functions. One of the few senior Chinese diplomats charged with corruption in recent years was former Assistant Minister of Foreign Affairs Zhang Kunsheng, who also led protocol functions and was dismissed from his position in 2015.

Alongside these high-profile removals, the internal investigations apparatus continues to churn through the middle ranks of the civilian sector under the new secretary of the Central Commission for Discipline Inspection, Li Xi. Some of the targets this year have been significant, such as the former Guizhou party secretary, former secretary of the Bank of China’s party committee, and a raft of mid-level officials from the discipline inspection system itself. However, there is no clear thread that links these investigations to top leaders.

Removals point to vetting missteps and misjudgments

Xi’s management of the CCP’s personnel system is vital to his political position and to the functioning of the party-state. At the same time, the identity of the recently removed officials along with their brief tenures suggest that he has committed unforced errors.

High-level prosecutions are not in and of themselves a sign of misjudgment, because there is a powerful rationale for Xi to periodically prosecute officials in politically sensitive positions. Working as a senior official in the Ministry of Public Security’s headquarters, for example, is likely to remain a high-risk occupation as long as Xi is in office. Xi has an incentive to selectively undermine ties and trust between officials who are in a position to affect his political security. Indeed, he has already demonstrated his willingness to use members of the security establishment against one another. Xi very likely recognizes that internal investigations can also promote paralysis and degrade organizational cohesion, but views this as a small price to pay for protecting his position.

However, there does not appear to be a clear political rationale behind the most recent removals that would offset the disruption to China’s national security apparatus. The officials who have been targeted played peripheral roles, at best, in the maintenance of Xi’s and the CCP’s political power. The minister of defense is not in the chain of command, and although the Rocket Force is crucial to the PLA’s military capacity, it is probably the most insular service. It plays little role in internal stability operations. The abrupt removals of Qin and senior military leaders so soon after they were put in office therefore exacts a cost to their organizations and to China’s image with little redeeming political value. This suggests shortcomings in the personnel vetting and monitoring systems—and perhaps Xi’s own judgment—that should have highlighted disqualifying factors before they were elevated to positions of prominence.

Implications for Xi’s political and strategic calculus

The recent personnel tumult suggests a variety of implications for Xi and China. First, the clean sweep of the Rocket Force’s leadership team and the imposition of outsiders to replace them indicate that Xi probably does not anticipate fighting a large-scale conflict soon. If he foresaw an imminent likelihood of war, then he probably would not have uprooted the Rocket Force’s entire leadership, or he at least would have chosen replacements more familiar with the force.

The nature of the removals is also a fresh demonstration that the imperatives of secrecy and compartmentalization in party governance are far more important to Xi than assuaging foreign concerns about the CCP’s opaque and seemingly capricious decisionmaking. The silence accompanying the mysterious disappearances of Qin and Li will fuel rumors about other potential targets. It substantiates concerns among foreign officials that their interlocutors are “nowhere near within a hundred miles” of Xi’s inner circle, as US Coordinator for the Indo-Pacific Kurt Campbell described in 2021.

Finally, the extent of the reshuffle will also be a marker of Xi’s broader approach to political control over the elite as he enters a new phase of his tenure. The ebb and flow of investigations over the past eleven years has tracked Xi’s overall political position and priorities. In his first term as general secretary from 2012 to 2017, Xi was consumed by his campaign to target the personal and institutional power bases of his rivals while elevating his allies. After Xi completed his consolidation of power in 2017, the broad purges and reorganizations slowed significantly as he shifted from disruption to construction. Since then, he has focused on rationalizing and strengthening the party apparatus.

The investigations that have come to light recently in Xi’s third term probably reveal cracks in Xi’s personnel management system. However, they do not yet imply a departure from his overall approach to controlling the CCP apparatus or a threat to his power. Xi maintains personal control over the key organs of political power within the party. He relies on a very small circle of trusted subordinates to run those organs and on regular but contained internal investigations into senior officials outside that circle. It would, however, signal a more disruptive and unpredictable approach to governance if leaders and officials at the heart of Xi’s political control apparatus were targeted. Those key organs include the Central Committee’s General Office and Organization Department and the CMC’s General Office. For now, the churn within the upper ranks of the PLA and MFA reflects a familiar, if flawed, playbook for enforcing discipline within the CCP.

Mark Parker Young is a nonresident senior fellow at the Atlantic Council’s Global China Hub and a principal analyst at Mandiant. The views expressed in this article are solely those of the author.

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The West must learn hard lessons from years of failed Russia policies

Kira Rudik — Thu, 12 Oct 2023 20:56:38 +0000

Following the end of World War II, the entire international community declared “never again” and began searching for ways to implement this motto in practice. Most people soon agreed that the key to securing a sustainable peace was to make war unprofitable by deepening international cooperation and economic inter-dependency. This led directly to the creation of the European Coal and Steel Community, which would later become the European Union.

The idea that it is more profitable to trade than fight works well in Europe and has helped secure an unprecedented period of peace across much of the continent. Unfortunately, many European political leaders drew the wrong conclusion from this success story and assumed the same principle could be applied to relations with Russia. Germany in particular spent years expanding energy sector ties with Russia in the mistaken belief that this lucrative trade would serve to moderate Russia’s more aggressive instincts.

Nor was Germany alone in such thinking. Many European countries were happy to ignore Russia’s steady turn toward authoritarianism under Vladimir Putin as long as they could secure cheap energy supplies and other financial benefits. Most were primarily concerned with making money, but many also saw deepening economic ties as an insurance policy against any revival of Russian imperialism. It is now clear that this was a disastrous miscalculation.

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While the Western world was busy repeating the “never again” mantra, Putin’s Russia was increasingly embracing a very different sentiment. From the early years of his reign, Putin actively revived lingering Cold War era antagonism toward the West within Russian society. He also transformed traditional reverence for the Soviet role in the defeat of Nazi Germany into something akin to a state religion, complete with its own dogmas, heretics, rituals, and feast days. People across Russia soon began to repeat the menacing slogan, “we can do it again.” Whereas Soviet troops had once marched to Berlin and occupied half Europe, today’s Russia was now threatening defeat the West through a combination of economic, informational, cyber, and if necessary, military tools.

In this confrontational climate, Europe’s faith in the moderating impact of international trade was perceived by Russia as a fundamental weakness. When viewed from the Kremlin, the profitability of Europe’s growing economic ties with Russia was actually seen as a green light for Moscow to pursue policies of aggression against third parties without fear of consequences.

Members of the Russian establishment remained convinced that while their Western counterparts enjoyed making idealistic speeches, they were ultimately driven by a far baser hunger for money. This Russian contempt for so-called Western values was further strengthened by experience, particularly the indecently rapid clamor for a return to business-as-usual following Moscow’s 2008 invasion of Georgia. The same was true in the wake of Russia’s 2014 annexation of Crimea and invasion of eastern Ukraine.

Russian perceptions of Western weakness and hypocrisy directly paved the way for the full-scale invasion of Ukraine in February 2022. Moscow expected the West to loudly protect the invasion before meekly accepting the new geopolitical realities and resuming economic cooperation with Russia. Based on prior experience, this was an entirely reasonable expectation. It appears to have taken the Kremlin completely by surprise when Western leaders imposed unprecedented sanctions, and when European nations began working to drastically reduce their reliance on Russian energy imports. For Ukraine, however, this show of resolve came too late to avert the devastating consequences of the invasion.

The tragedy of Russia’s criminal invasion could have been avoided if the West had sent an unambiguous message to Moscow indicating that the days of imperial aggression were over. Instead, too much trust was placed in the ability of deepening economic ties to deter international aggression, while modern Russia’s retreat into old-style imperialism was not taken sufficiently seriously.

The failure of trade-based diplomacy is also relevant in relation to China. Economic ties between Beijing and the West are often characterized as being mutually dependent, with some arguing that this makes any serious deterioration in relations unlikely. The same argument is sometimes applied to China and Taiwan, which have a robust economic relationship despite political tensions. However, this flawed logic has already been exposed by the West’s failed Russia policies.

Publicly, at least, China has declared a neutral position toward the Russian invasion of Ukraine. In practice, China is reaping the benefits of closer ties with an isolated Russia, while at the same time avoiding any sanctions pressure from the West. Regardless of the outcome in Ukraine, Beijing stands to benefit; a Russian victory would strengthen China, while a Russian defeat would increase Moscow’s dependency on Beijing.

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If Russia is able to achieve even a partial victory in Ukraine, the consequences for global security would be catastrophic. Western leaders must escalate their support for Ukraine to prevent this outcome and make sure Putin’s invasion ends in decisive defeat.

Looking ahead, it is clear that while economic inter-dependency can help maintain peace among like-minded democracies such as EU member states, it is utterly ineffective in terms of authoritarian regimes like Putin’s Russia. Instead, new approaches are needed that prioritize human values over trade balances or financial interests. Above all, the West must rid itself of the naive illusions that set the stage for today’s Russian war in Ukraine.

It is also vital to speak to dictators in the language of strength. After all, this is the only language that leaders like Vladimir Putin truly understand. To Putin and his fellow dictators, any talk of win-win situations and mutually beneficial cooperation is interpreted as a sign of weakness. Instead, today’s world requires institutions capable of imposing powerful sanctions on countries that break international law.

This process should begin with Ukraine. As Western leaders continue to shape their response to Russia’s ongoing invasion of Ukraine, they have an opportunity to build a new system of international relations capable of deterring future dictators from embracing aggressive foreign policies. Immediate priorities should include tougher sanctions against Russia, dramatically increased military aid for Ukraine, and the confiscation of Russian assets to finance the Ukrainian recovery process. Ultimately, Ukrainian victory and Russian defeat will be the greatest deterrent of all for any authoritarian rulers contemplating their own wars of aggression.

Kira Rudik is leader of the Golos party, member of the Ukrainian parliament, and Vice President of the Alliance of Liberals and Democrats for Europe (ALDE).

That is precisely why there’s been a near-total blackout in Egypt on the Menendez case, in which US federal prosecutors are probing the possible involvement of high-ranking officials from within the country’s intelligence services. Coverage of the case has been restricted to a news show broadcast on the state-owned “Al Qahera News Channel.” On September 23, the show’s presenter stated that Reuters had alleged that Senator Menendez and his wife were being accused of receiving bribes from three New Jersey businessmen to enrich the latter and benefit Egypt.

Not only did the news anchor avoid any mention of the alleged involvement of the Egyptian leadership in the bribery case, but she also failed to make any reference to the fact that one of the businessmen, Wael Hana—a co-defendant in the case—was an Egyptian-American Coptic Christian with a lucrative monopoly over the certification of halal meat—imported by Egypt from the US—granted to him by the Egyptian authorities.

Meanwhile, Ramy Gabr, Al Qahera’s correspondent in Washington, downplayed the bribery allegations, portraying them as part of the power struggle between Democrats and Republicans ahead of US Congressional elections. Gabr asked Joel Rubin, the former Deputy Assistant US Secretary of House Affairs for the State Department, about the rivalry ahead of the US Congressional elections and whether Rubin saw a connection between the elections and the Menendez corruption case. By focusing on the elections rather than the case itself, Gabr tactically steered the conversation away from Egypt and the US prosecutors’ accusations of bribery.

Rubin replied, “Right now, we are in the silly season in the United States with electoral campaigns underway in full throttle; anything can happen in US politics.” He went on to explain that it was a tight race and added that, with US presidential elections due next year, failure by the Democrats to garner majority seats in the Senate would have catastrophic implications for them. As a result, Republicans were stopping at nothing in their quest to attain power, Rubin added.

Egyptian analysts interviewed by the Middle East News Agency (MENA) also dismissed the case as “a US internal political matter” and “part of the wider power struggle between Democrats and Republicans ahead of the US presidential elections slated for November 2024.

Some officials lamented that it was a deliberate attempt to defame the Egyptian leadership amid tensions between the US and its once-staunch ally.

In comments to MENA on September 23, Ambassador Mohamed El-Orabi, Egypt’s former foreign minister and current chairman of the Egyptian Foreign Relations Council, cautioned that the accusations leveled at Senator Menendez were still under investigation.

“It would be inappropriate to comment on the case at this early stage,” he said. Orabi urged Egyptians to reject and resist attempts to tarnish Egypt’s image and drag the country into an internal political dispute between opposing parties in the US, noting that “there has been no official statement from the Biden administration on the case so far,” he told MENA.

Tarek Fahmy, a professor of Political Science at Cairo University, also downplayed the bribery accusations. He explained that such allegations against senators and other US politicians are common in US politics.”

“Involving Egypt in a case that is still under investigation may be linked to recent calls by certain pressure groups within the US Congress to withhold military aid to Egypt,” Fahmy said, in an apparent reference to demands by lobbyists in Washington and rights groups that US lawmakers withhold a further $235 million in military aid to Egypt.

In mid-September, the Biden administration announced it would withhold $85 million from the $1.3 billion the US designates for US security assistance to Cairo yearly, citing human rights concerns.

Some rights groups, such as Democracy for the Arab World Now (DAWN), have gone further, calling for a temporary freeze on all aid to Egypt until the investigations are completed.

Ironically, despite the tight restrictions on Egyptian media and heavy censorship, it was an article published in the Egyptian independent news site,, Mada Masr, in 2019 that questioned the monopoly of the New Jersey-based IS EG Halal Certified—a hitherto little-known company—over the multi-million dollar business of halal meat certification in the US, that may have been the first spark that ignited suspicion and paved the way for the Menendez probe.

Nada Arafat, the reporter who authored the piece, wrote that “the Egyptian government licenses several certifiers around the world whose job is to ensure that exporting slaughterhouses comply with halal (Sharia law) requirements. She continued, “In May 2019, the Egyptian Agriculture Ministry abruptly disqualified all halal certifiers eligible to operate in the United States, except for one newly licensed company—IS EG Halal Certified.”

Through her investigative reporting, Arafat discovered that the company had been established just two years earlier and had no prior experience in halal certification nor any pre-existing ties to the US beef industry. Arafat further noted that days after it became the exclusive certifier, the company raised certification fees in North America, translating into millions of dollars of extra revenue, according to calculations made by Mada Masr.

It is worth noting that Mada Masr is one of hundreds of news sites blocked by the Egyptian government since 2016. In other words, Arafat’s piece was off-limits to most Egyptians, but tech-savvy readers could use circumvention tools like VPNs to access blocked news sites.

The investigation by Mada Masr also revealed that IS EG operates alongside another private business with close links to a sovereign entity—a term often used in Egypt to refer to high-level security institutions.

Despite the low-key coverage of the shocking corruption scheme by the mainstream Egyptian media, the bribery case stirred controversy on Egyptian social media platforms. Government supporters perceived the alleged recruitment of a senior US official to further Egypt’s interests as “a win” for the Egyptian government. Meanwhile, an opposition activist lamented that “we (Egyptians) learn about the (leadership’s) scandals from the international press.” He cited as one example the recent Zambian plane saga in which the country’s notorious security agencies were suspected of implication in a botched attempt to smuggle hundreds of thousands of dollars and gold bars out of the country. Zambian authorities seized the plane on arrival at Lusaka Airport, and the suspects were arrested.

Another activist lamented via his X account, formerly known as Twitter, that “corruption and bribery have become so normalized in our psyche, they are not shocking anymore.”

Others, however, questioned the timing of Menendez’s indictment with Egypt’s presidential elections scheduled for December 10-12. They suspect the US administration may use the case to pressure President Abdel Fattah el-Sisi to hold free and democratic elections. But, with the bulk of Egyptians left in the dark about the case—particularly Cairo’s alleged involvement in the corruption scheme—it appears highly unlikely that the Menendez case will cast a pall over the upcoming presidential election in Egypt.

Shahira Amin is a nonresident senior fellow at the Atlantic Council’s Scowcroft Middle East Security Initiative and an independent journalist based in Cairo. A former contributor to CNN’s Inside Africa, Amin has been covering the development in post-revolution Egypt for several outlets, including Index on Censorship and Al-Monitor. Follow her on X: @sherryamin13.

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Mixed messaging from Moldova on energy sector reforms

Suriya Evans-Pritchard Jayanti — Tue, 03 Oct 2023 20:21:04 +0000

Observers and stakeholders are unsure whether recent energy sector developments in Moldova constitute progress or backsliding. Some reforms are underway, such as the unbundling of gas monopoly Moldovagaz, but other recent steps cast doubt on Chisinau’s commitment to energy market liberalization, escaping Russian energy dominance, and anti-corruption imperatives.

Moldova, one of the world’s most energy insecure countries, has been relying on foreign assistance to meet its energy needs since gaining independence in 1991. Entirely reliant on oil and gas imports, and upon a single power plant problematically situated in the Kremlin-controlled separatist region of Transnistria, the country has been plagued by energy sector corruption, vulnerability, and structural impediments.

Russia has long been accused of taking advantage of this predicament, most recently in September 2023 with targeted cyberattacks against Moldovan energy companies. Russia’s majority ownership, via Gazprom, of Moldova’s state-owned gas monopoly Moldovagaz, has also certainly not helped Chisinau steady itself. But neither has Moldovan leadership shown a consistent commitment to energy sector reforms.

Under the country’s Western-supported President Maia Sandu, there have been some signs of long-awaited energy sector improvements. This is much to the relief of Western stakeholders, such as the European Energy Community Secretariat (ECS) and US government agencies including the US Agency for International Development (USAID). Western governments collectively donated over $1 billion to Moldova in 2022 alone and would like to see a return on their investment.

Positive developments include progress on the unbundling of Moldovagaz, which Moldova first agreed to complete 13 years ago when it acceded to the EU Energy Community Treaty in 2010. This process was to be completed in 2016, but the original deadline was subsequently extended to January 2020 and then February 2021. In 2021, the ECS brought infringement proceedings against Chisinau because the unbundling of Moldovagaz still hadn’t taken place.

Some recent progress has been made on unbundling, leading the ECS to “commend” Moldova for approving a Lease Agreement between Moldovatransgaz, the country’s largest transmission system operator, and Vestmoldtransgaz, to operate the transmission networks owned by Moldovatransgaz and Moldovagaz. However, this move was criticized by some as merely swapping Russia’s Gazprom out for an equivalent Romanian foreign controller, as Vestmoldtransgaz is 75% owned by Transgaz Romania, with the remaining 25% owned by the European Bank for Reconstruction and Development (EBRD). However, it does constitute a significant step toward unbundling Moldova’s gas sector.

Chisinau also recently completed an audit of Moldovagaz to assess whether $800 million of purported debts claimed by Gazprom had any basis. The audit concluded that the alleged debts were the result of bogus accounting shenanigans by the Russians. For a country widely regarded as among the poorest in Europe, wiping clean a $800 million debt is a very important development that could allow for gas market restructuring and reform.

Another promising sign is Chisinau’s recent courtship of renewables investors. Handicapped by its reliance on a lone power plant in Transnistria, Moldova desperately needs alternate power generation capacity or green electricity. The country has good wind and good enough solar potential to supplement its energy mix with renewables; the necessary amendments to its power sector laws should soon be enacted that will permit the construction of grid-scale battery storage capacity with which to regularize the use of renewables generation.

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There are a number of troubling recent developments in Moldova’s energy profile that leave observers in Western governments and think tanks, as well as private investors in the energy sector, wondering whether the country is actually de-liberalizing its energy sector.

Emergency orders instituted after Russia’s full-scale invasion of Ukraine and the resulting global energy crisis have made it possible to allow for continued Russian natural gas imports, to restrict broader market access, to consolidate all gas supply in Moldovagaz, and most recently, to sign a gas import contract with Turkish suppliers of Russian gas. Many observers are concerned that this last development is at the very least an opportunity for corruption, if not in fact a kickback scheme.

Undermining Moldova’s claim to have stopped using Russian gas, the new Turkish supply from BOTAS will be coming from Russia through the Turkstream pipeline. BOTAS, which signed an agreement with brand new Moldovan company East Gas Energy Trading, has begun supplying two million cubic meters of gas per day from October 1, 2023. At the same time, Moldovan Energy Minister Parlicov announced on September 21 that Chisinau will not stop importing Russian gas for Transnistria.

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When pressed about these apparent steps backward, Moldovan Energy Ministry officials have cited the need for energy security. However, they have been unable to explain how favoring Russian gas sold through Turkey or directly from Gazprom was necessary when Western supply companies already operating in the region, in some cases even in Moldova itself, were ready to import through Romania or Ukraine.

One company, Energy Resources of Ukraine (ERU), a well established US gas trader in Eastern Europe, has been waiting over a year for Moldova’s energy regulator, the National Agency for Energy Regulation (ANRE), to allow it to apply for a license to import gas. When contrasted with the BOTAS contract and its justification, examples like ERU’s situation have raised concerns over possible corruption in the energy sector.

With questionable logic, “energy security” was also cited as the explanation for why Western companies are being frozen out of the Moldovan energy market. Six out of ten interested private suppliers have walked away recently because ANRE is accused of undercutting the viability of commercial operations by imposing a Public Service Obligation to supply below cost.

Some companies say they are facing bankruptcy because of ANRE’s anti-competitive decisions. The largest company, Rotalin Gas Trading, announced this week that it can no longer supply gas because ANRE has set tariffs so low. With a 3% market share, Rotalin Gas Trading had been the only supplier of gas other than Moldovagaz and was about to take on a broader industrial customer base when, in May 2023, Moldova instituted so-called “equity contributions,” meaning penalties for any customers trying to switch away from Moldovagaz. ANRE this week started the process of revoking Rotalin Gas Trading’s license, which critics say will reduce both Moldova’s energy security and market competition.

The result of these measures is the strong appearance of an effort to consolidate the entire gas sector into a single state-owned entity, Moldovagaz, supplied with Russian natural gas through state-owned Energocom. It is unclear how reducing competition and diversity of supply helps achieve energy security, reduces prices for Moldovans, or complies with the liberalization commitments Chisinau made when it began to seek greater integration with the EU. Western government stakeholders are paying attention, as are investors.

Moldova is at a crossroads. It could use abundant foreign assistance, the political license afforded by the war in Ukraine, and energy transition momentum to reform its energy sector. This will not be an easy task, to be sure. But today’s “one step forward, one step back” situation risks undermining the overall reform agenda while weakening Moldova’s energy independence, the goodwill of the West, the likelihood of Moldova being admitted to the EU any time soon, and the quality of life for individual Moldovans.

Suriya Jayanti is a nonresident senior fellow at the Atlantic Council’s Eurasia Center.

In advancing these initiatives, USAID has been a key partner in supporting anti-corruption in Ukraine and Moldova. Isobel Coleman, Deputy Administrator for Policy and Programming at USAID, explained, “One approach we are taking is really trying to constrain the opportunities in the first place for corruption, and secondly, when corruption occurs, to raise the cost of corruption.” According to Coleman, costs can be raised by “investing in the institutions of anti-corruption, so that there can be more robust prosecution of corruption when it occurs.”

Coleman also underlined the importance of robust civil society engagement, so civil society actors can track procurement contracts and other processes vulnerable to corruption. She underlined the importance of “strong, vetted, qualified leadership able to prosecute crimes and deal with corruption when it arises.”

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Nicu Popescu, Moldova’s Deputy Prime Minister and Minister of Foreign Affairs and European Integration, cited the malign influence of corruption on the development of the wider region. “Corruption over the last 30 years in our part of the world has been one of the factors facilitating and actually driving our region to this moment in our tragic history,” he said.

Popescu cited the pre-vetting of judges as an area where his country is now making progress. Working with Moldova’s partners, they have returned an important airport to public control as part of their de-oligarchization initiatives, and have also introduced sanctions against corrupt individuals accused of trying to destabilize the country.

Ukraine’s Minister of Justice Denys Maliuska highlighted the importance of transparency within Ukrainian society and noted that his country presently has many initiatives to streamline reforms and make recovery as transparent as possible. Maliuska cited digitalization and privatization as key means of decreasing state influence over resources and reducing the market share of state-owned enterprises in Ukraine, which he views as a route to decreasing corruption and optimizing the country’s civil service. “Anti-corruption efforts are a huge priority for our country in line with EU accession,” he said.

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Alongside state reforms, the role of civil society remains paramount. Moldova’s civil society is active in contributing to maintaining government accountability at the central and local levels. “Civil society organizations in my country are involved in policy processes, in decision-making processes, in contributing with expertise, and supporting reform efforts,” said Iulian Groza, Director at the Institute for European Policies and Reforms. “We know how corruption is affecting or has affected our country’s institutions, and how it makes us more vulnerable to malign aggression,” he commented.

Amid efforts to rebuild the Moldovan justice system and other anti-corruption institutions, Groza cited the importance of civil society in facing the challenges presented by the lingering influence of loyalists from previous kleptocratic regimes, arguing that civil society plays an important role in bridging gaps of understanding and reaching out to communities. “It’s very important to understand that the justice system in my country has been made vulnerable for years,” he states.

Groza described how crucial it was for international stakeholders, including the EU and the US, to reinforce anti-corruption institutions to combat security threats, as corruption within the country continues to be used as a tool of hybrid aggression. It is very important to ensure a balance “between preserving democratic values, rule of law, and efficient anti-corruption efforts, while at the same time addressing security concerns,” he said.

Andriy Borovyk, Executive Director for Transparency International Ukraine, stated that “fighting corruption and building good governance is always a process.” Commenting on the rise of technological solutions to increase transparency and accountability, Borovyk noted that technology was only one piece of a broader puzzle to eliminate corruption. “Behind every IT solution are people,” he observed.

USAID’s Coleman spoke to the need for continued assistance to Ukraine, even as it confronts the scourge of corruption. “There are huge flows of money, but we know that they are going directly to pay teachers, to pay healthcare workers, to pay first responders,” she said. “These are funds that are actually going to help keep the government of Ukraine intact as it wages this war for survival.”

In her concluding remarks, Ylva Johansson, European Commissioner for Home Affairs, stressed the importance of the anti-corruption reforms taking place in both countries and underlined the EU’s commitment to further support. “The fight against corruption is a life or death struggle for Ukraine,” she noted, as Putin exploits corruption to advance his interests. “One day, both Ukraine and Moldova will become EU member states.”

Olivia Yanchik is a program assistant at the Atlantic Council’s Eurasia Center.

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Removal of defense minister shows wartime Ukraine is changing

Melinda Haring — Tue, 05 Sep 2023 15:24:15 +0000

Ukraine’s outgoing Defense Minister Oleksii Reznikov, who resigned on September 4, was known for his deep relationships with the country’s Western partners. Outspoken and often wearing an olive green hoodie since the full-scale invasion began, the bald, bespectacled former Kyiv city councilman developed a reputation for being detail-oriented but personable, straightforward but sardonic, and above all, universally well-liked abroad. He was instrumental in establishing an indispensable coalition of Western countries that supplied Kyiv with heavy weapons to ensure that it could keep fighting during its darkest hours and days in 2022.

So what gives? There have simply been too many scandals on his watch. In January 2023, egg-gate broke when it emerged that the defense ministry had been procuring eggs for its soldiers above market prices. This may not sound like a career-ending scandal, but critics worried about what else might be lurking in defense contracts if the ministry had overlooked graft in food contracts. If insiders were already stealing from the army after less than a year of full-scale war, what else would they find once more serious arms contracts were declassified? Plus, there was widespread awareness that Ukraine couldn’t afford any corruption scandals if it wanted vital Western military and financial aid to continue uninterrupted.

Reznikov snapped into action and promised a crackdown. He appointed a tenacious but low-profile reformer, Arsen Zhumadilov, who had previously rooted out corruption in prescription drug procurement after Ukraine’s 2014 Euromaidan Revolution. Kyiv insiders spoke highly of his competence and integrity, but the effort never really gained momentum and nobody in the West seemed to notice.

Fast forward to August. Ukraine’s mighty anti-corruption activists accused the defense ministry of overlooking graft once again. The ministry had purchased winter jackets from Turkey for $20 million, and the price began to skyrocket, sparking outrage and demands for the defense minister’s head. Reznikov played for time, urging journalists to wait for the results of the investigation before jumping to conclusions. However, President Zelenskyy is under intense pressure to root out corruption, both large and small. Ultimately, Reznikov was asked to resign.

“Reznikov was not good enough at external communication with a number of extremely emotional and sometimes aggressive public activists, which all resulted in a pretty bad flavor around the ministry of defense and the minister. Most of the corruption scandals were extremely marginal, manipulative, and mostly artificial,” one current member of parliament told me off the record.

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Zelenskyy will appoint 41-year-old Crimean Tatar Rustem Umerov, who most recently led Ukraine’s State Property Fund, to replace Reznikov. The anointing of Umerov, a former member of parliament from the opposition Holos Party, signals two things: First, Crimea is Ukraine and Kyiv will not enter into any negotiations over the status of the occupied peninsula. Many people, especially in Berlin and Paris, would love for Kyiv to abandon Crimea. They argue that Ukraine’s ownership of Crimea is an historical accident and claim the peninsula is really Russia’s after all. Trading away Crimea will never happen on Umerov’s watch.

Second, Umerov’s appointment underlines how much perceptions of what it means to be Ukrainian have changed. Jews, Muslims, and ethnic Russians are all Ukrainians now. Modern Ukrainian identity is a civic construct, not an ethnic one, something Olga Onuch and Henry E. Hale have found in their remarkable new book The Zelensky Effect. A Jewish president appointing a Muslim defense minister is a notable achievement that reflects Ukraine’s nation-building progress.

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Umerov couldn’t be more right for the job of Ukraine’s next defense minister. He speaks fluent English and Turkish, and has extensive negotiation experience with Turkey and the Middle East, which could prove particularly important as the war continues. He has negotiated prisoner exchanges between Ukraine and Russia with the help of Saudi Arabia, and helped negotiate the Black Sea Grain Initiative.

For Umerov, human rights aren’t an afterthought. As a member of Ukraine’s Crimean Tatar minority who was born in Uzbekistan following the Stalin-era deportation of the Crimean Tatar population, he understands the importance of home and one’s ties to their ancestral land. “I survived the resettlement back home to my historical land in Crimea. I know what reintegration is, and I know what temporary occupation is,” Umerov told Forbes.

I was lucky enough to meet Umerov in 2019 at a Kyiv restaurant; in typical Crimean Tatar fashion, he plied me with more food than I could possibly eat and came across as a genial host. His intelligence was obvious from miles away. Umerov is the right man for the job, and Ukraine will be well served by having a Crimean Tatar in one of the country’s top positions.

Melinda Haring is a non-resident senior fellow at the Atlantic Council’s Eurasia Center. She tweets @melindaharing.

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The Ukrainian government has also reacted by prioritizing the war and rooting out security threats, including residual Russian leverage in the business sector. However, after a few months of deregulation and tax breaks to help business withstand the initial shock of war, a return to regular policies was initiated in late summer 2022. Driven by expectations on the part of the IMF and other international financial institutions that Ukraine should shoulder its fair share of the financial burden, and by the need to fund the direct military expenditures that partners would not cover, this summoned up some of the old familiar demons that have bedeviled Ukraine’s business climate for decades. These included unpredictable and selective tax and customs administration enforcement, ill-founded criminal prosecutions sweeping up what are really civil or commercial law disputes, and a reductively literal application of the law to punish senior officials who showed business-friendly initiative.

This back-tracking is at odds with the Ukrainian authorities’ proclaimed economic policy goals and does not help to make the country fit for national renewal. Spare capacity in agencies that should no longer be handling economic issues generates spurious cases that do not go to trial but waste thousands of hours of management time spent responding to document subpoenas and attending interrogations. The new Bureau for Economic Security, designed to be a center of expertise on business-relevant enforcement, remains underfunded and adrift, with its acting management on holiday or sick leave. Poor administrative modeling leads to tax clampdowns that hurt legitimate business more than fraudsters. Senior officials who implemented legislatively approved public-private partnerships or corporate governance models are on trial for ostensibly harming the state by “exceeding their competencies,” sending a distinctly chilling message to would-be reformers already in office or thinking of joining the government.

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Business leaders shared these and related concerns with Ukrainian President Volodymyr Zelenskyy at a meeting on June 29. An ad hoc committee bringing senior presidential advisors on both the business and law enforcement sides of things has been meeting weekly to get a handle on why reforms in these fields so far have not meshed. As Ukraine’s Business Ombudsman, I’ve offered the support of our experienced legal team in working out the contradictions and disconnects.

Tackling problems together is all the more important as Ukraine’s European Union integration agenda is about to get very real. A €50 billion Ukraine Support Package is to be accompanied by a rigorous pre-accession plan linking quarterly payments to reform results achieved. Gone are the days when hundreds, indeed thousands, of pages of airy strategies could be generated, safe in the knowledge that they would never face the test of contact with reality. Every Ukrainian ministry and every agency will need to not only align formal documents with EU rules, but start acting in ways that make them fully interoperable with counterparts from the 27 current EU member states.

To achieve individual, business, and national goals of renewal, Ukrainians need their government to be just as nimble and adaptive as the country’s private sector. Getting there means not only enabling the new, but also letting go of the old by building down the country’s excess capacity to stop change and change-makers in their tracks. Beyond the existential security challenges created by Russia’s ongoing invasion, this will be the principal task for Ukraine’s business environment in the months and years ahead. Finding the right solutions will prove decisive for the emergence of a new Ukraine as a competitive EU member state.

Roman Waschuk is Ukraine’s Business Ombudsman.

Corruption is a complex issue that exists in various forms and degrees in any society. It normally refers to the abuse of power for personal gains and the diversion of public resources for private use. As it is done behind closed doors, it is difficult to observe as it happens. Transparency International has developed the Corruption Perception Index (CPI), a widely used measure that is based on how experts and the private sector perceive corruption in the public sector. It draws on data collected by leading organizations through a range of regular surveys and assessments of different sectors of society, including politics, the economy, and the judiciary.

While even the best performer, Denmark, achieves only a score of ninety out of one hundred, Iran hovers around twenty-five, which ranks it as 147th out of 180 countries in 2022. Interestingly, its score improved between 2013-2017—when Iran became relatively more open to the outside world—but has sunk sharply since and not improved after hardliners consolidated their power and control over all branches of the regime—thus, validating the saying, “absolute power corrupts absolutely.”

Consensus exists among governance experts that opaque power structures, lack of transparency and accountability, and a weak rule of law are the primary causes of the persistence of corruption in any country. These conditions exist in Iran and have been exacerbated by the decades-long efforts to circumvent international sanctions, even though some steps have been taken to address corruption.

Most notably, Iran signed and ratified the United Nations’ Convention against Corruption. Additionally, high-profile public-sector bribery or fraud cases receive ample media coverage, ranging from vast embezzlement in state-controlled enterprises, such as the $21 billion fraud in Mobarakeh Steel Complex, the $3 billion in Sarmayeh Bank, or in the intricate web of bribery and fraud in the judiciary, as in the case of Akbar Tabari, the deputy to the long-time head of the Judiciary, Ayatollah Sadegh Larijani. These are just a few of the high-profile cases in recent years that have seen the light of day.

In one way or the other, all cases point to the prolific involvement of regime insiders. Some perpetrators have fled and now live comfortably in the West, like Bank Melli General Manager Mohammad Reza Khavari, who presumably embezzled $2.6 billion and reportedly lives in Canada. The perpetrators that were caught have received heavy sentences, while some were executed and others fled. In one instance, one faced a suspicious death in exile for fear of whistleblowing.

These cases have demonstrated the extent of power networks of patronage within the regime and its various factions, often linked to high-level clergy. The very big fish that were caught continue to benefit from protection—even inside prison. In late June, the head of Iran’s prisons revealed that, despite his thirty-one-year sentence, Tabari is no longer in prison and has been set free by the highest judicial authority.

Unfortunately, systemic corruption is likely to get worse. The fragility of the regime and the erosion of its supporters in the wake of the ongoing anti-establishment protests due to Mahsa Jina Amini’s murder, the shifting loyalties within the inner circles, and the uncertainty of the post-Ayatollah Ali Khamenei succession are among some of the factors that create an environment of instability in which those who have an opportunity to steal are likely to do so while they can.

Do sanctions promote corruption?

Some Iranians point fingers for the ever-deepening corruption at the layers and layers of economic sanctions that have been imposed on the country since 1979. Sanctions do create economic distortions that are meant to disrupt normal economic activity, mostly through blocking trade and financial channels. But according to Hashem Pesaran, a prominent Iranian economist, only 20 percent of the economic malaise over a thirty-year period was caused by sanctions, and eighty percent is due to domestic policies.

Nonetheless, efforts to bypass these barriers lead to the emergence of informal or black markets, where corruption can thrive as individuals seek alternative ways to bypass sanctions and obtain necessary goods or services. One such instance is the case of Babak Zanjani—a businessman who, with the consent of officials during the presidency of Mahmoud Ahmadinejad (2005-2013), was tasked to export Iranian oil by evading internationally imposed sanctions and, in the process, siphoned off vast amounts. When the winds of fortune turned, he was arrested for embezzlement. Though initially sentenced to death, he was commuted to a life sentence and there are reports that he had been quietly pardoned since.

There is considerable debate about the role and effectiveness of international sanctions. Corruption and sanctions were among the topics discussed during an Atlantic Council panel on June 13. There are two opposing views. Some believe that more sanctions are needed to force the Islamic Republic to adopt acceptable behavior, be it in the realm of a nuclear deal, regional relations, human rights, or even bring about regime change. Others contend that regime insiders only benefit from sanctions—that they actually welcome it—while ordinary Iranians bear the brunt. There is evidence that sanction-busting mafias, known as sanction traders, derail any agreement with the West that may lead to sanctions relief as this would erode their economic interests.

Countries that impose sanctions insist that they are targeted toward specific individuals and activities and will not impact average citizens, particularly in the areas of food and medicine. However, the anemic economy combined with the difficulty of repatriating Iran’s foreign exchange earnings has resulted in an ever-weakening rial and high inflation, which Iranians feel daily.

Nevertheless, while there is a plethora of stories on how sanctions hurt the people, there are also daily examples of how sanctions have had little impact on limiting the access of officials to Western luxury goods and lifestyles. Sightings of officials with expensive watches, the latest iPhones, and designer clothes have become routine and questioned in the media. Indeed, a recent report argues that Iranian decision-makers have successfully shielded themselves from the adverse effects of sanctions. In reality, sanctions largely impact those that do not influence the regime’s actions.

Iranians inside and outside the country have long complained that foreign powers are not serious or consistent in applying sanctions. On the one hand, the average Iranian cannot open bank accounts abroad, and often many who opened accounts decades ago were asked to close them for fear of violating sanctions rules. On the other hand, visible trades, such as luxury goods (like a fleet of Porsches or Maseratis) and their payments, slip safely through the sanctions’ walls, and access to them is used as a reward for loyalty to the regime.

The inconsistency leads to suspicions that, contrary to oft-stated objectives that sanctions are not designed to hurt the people of Iran, the West not only knows what it is doing, but is, in fact, a facilitator for the regime against the people, as evident when a German IT firm helped the regime filter and block Internet during the height of the ongoing protests. Recently, it was reported that the infamous Hossein-Ali Nayyeri, one of the four judges who executed several thousand political prisoners in 1988—known as the 1988 massacre—was being treated at a leading neurological center in Germany. It is unimaginable to contend that German officials were unaware of who he is or through what channels the payment was made to cover his exorbitant treatment costs. The United States and Europe must do a better job of walking the talk to ensure that their maximum pressure measures are indeed punishing the ones whose decisions have caused the state in which Iranians find themselves.

A common thread

The frequently publicized cases of bribery, embezzlement, or diversion of funds have become routine. Hence, only the ever-increasing amounts of money and elaborate schemes can temporarily attract people’s attention until the next outrageous corruption case emerges.

A common thread among these cases is their link to the vast politically and ideologically loyal networks of patronage and rent-seeking interests, often including prominent members of the clergy. It is yet another area that the Islamic Republic has failed in making good on its promise of establishing an ethical society. The presence of an elaborate sanctions scheme does not seem to deter these networks. In fact, they seem to thrive more from the resulting opaqueness while the public at large suffers the consequences.

There is a considerable consensus among Iranians inside and outside the country that the regime must be punished for its egregious human rights conduct. Sanctions seem to be the only instrument in the toolbox to bring about behavioral change within the mullahcracy. There is a widely held view that the actions of the US and other Western governments have blocked the access of average Iranians. Yet, the door remains wide open for regime insiders to travel freely, access their oft ill-gotten funds with ease, and whose children live comfortably in the West. Sanctions need to be better targeted and better enforced instead of the West looking the other way.

Nadereh Chamlou is a nonresident senior fellow at the Atlantic Council’s empowerME initiative and an international development advisor.

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Kroenig and Ashford debate the impetus of the Niger coup

sodal — Fri, 04 Aug 2023 17:35:53 +0000

Vice President and Senior Director, Scowcroft Center for Strategy and Security

On August 4, Foreign Policy published its biweekly “It’s Debatable” column featuring Scowcroft Center Vice President and Senior Director Matthew Kroenig and Emma Ashford assessing the latest news in international affairs.

In their latest article, Kroenig and Ashford debate the impetus of coups in fragile states, using the recent 2023 Niger coup as an emblematic case study. Does US military training of foreign officials inflate the tendency for coups, and other instances of state-based violence? Or are underlying economic and institutional concerns the catalyzing factor?

Realistically, US military training is not a meaningful driver of coups. The real problem in Niger and the broader Sahel is weak institutions and economic underdevelopment and the interaction between them.

Matthew Kroenig

The United States relies a lot on military-to-military contacts, training and equipping foreign militaries to do antiterrorism or other missions, rather than traditional diplomatic or economic ties with regional governments… It doesn’t really tamp down terrorism, and it destabilizes governments in the process.

Emma Ashford

Staff

Matthew Kroenig

Scowcroft Center for Strategy and Security

China Defense Policy

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Ukraine must not forget fight against corruption while battling Russia

Brian Mefford — Thu, 27 Jul 2023 21:14:21 +0000

With Russia’s invasion of Ukraine now in its eighteenth month, the courage of the Ukrainian army and the resilience of the Ukrainian people have inspired the world, generating enormous amounts of international sympathy and goodwill. Audiences everywhere are rooting for Ukraine to win the war and succeed in its postwar reconstruction efforts. However, while Ukraine battles the Russian army, corruption continues to threaten the country from within and could help the Kremlin achieve its goals even while Moscow is struggling militarily.

The multiple anti-corruption agencies established by Ukraine following the country’s 2014 Euromaidan Revolution have yet to bring any high-ranking corrupt officials or oligarchs to justice. Instead, critics claim these agencies are frequently manipulated and weaponized in order to target reformers. While there have been no landmark breakthroughs in the battle against corruption within state organs, numerous reformers have had their reputations damaged.

For example, Ukraine’s Supreme Court finally acquitted former Ukrainian Transportation Minister Volodymyr Omelyan in March 2023 over charges brought by the National Anti-Corruption Bureau of Ukraine (NABU) that he illegally ordered the reduction of all port fees by 20 percent while in office. It took this former minister with strong reformist credentials six years and significant legal fees to clear his name and get the charges dismissed.

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Concerns are now growing over the wartime performance of Ukraine’s anti-corruption agencies. In December 2022, courts in Chernihiv suspended the mayor of the city over a supposed conflict of interest. Vladyslav Atroshchenko had been a fixture in local politics in the city for 20 years, serving as governor and member of parliament before finally becoming mayor. The court ruling to suspend him from office has raised questions over the role of Ukraine’s anti-corruption bodies.

What was the reason for Atroshchenko’s removal? With Chernihiv on the front lines in the first days of the Russian invasion, the mayor used a car belonging to the municipal authorities to send his wife to safety in Poland while he stayed to help with the defense of the city. The car was later returned, but the National Agency for the Prevention of Corruption (NAPC) issued an administrative protocol claiming the mayor had failed to report this alleged “conflict of interest.” A Ukrainian court then ruled to remove the mayor from office on this technicality.

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There are similar concerns in Rivne, where a judge recently suspended the city’s 36-year-old mayor Oleksandr Tretyak on the grounds that he also failed to disclose an alleged conflict of interest. Once again, Ukraine’s anti-corruption agencies are involved. In February 2023, the NAPC issued an administrative protocol against the mayor for a technical “conflict of interest” related to the payment of a bonus to an employee who had made a donation to Tretyak’s election campaign some years earlier while working as a campaign volunteer.

This charge is particularly contentious because bonuses are widely used throughout the Ukrainian government to retain key staff, reward hard work, and discourage the taking of bribes as public officials typically receive low salaries. Nevertheless, the NAPC accused the mayor of failing to inform them of a “conflict of interest.” Critics have alleged that this as an example of unreformed courts working together with anti-corruption agencies to secure politically motivated verdicts. The case is on appeal with an uncertain outcome.

With so many Ukrainians currently making huge sacrifices to ensure the country’s survival, accusations that anti-corruption agencies are being misused to target reformers and political opponents could have a significant negative impact on morale. This alarming trend risks undoing the progress of the past nine years and undermining Ukraine’s chances of achieving further Euro-Atlantic integration. If it remains unaddressed, it could see Ukraine trapped in the geopolitical gray zone and vulnerable to further Russian aggression.

Corruption has long been seen as a critical element of Russian efforts to retain control over Ukraine and prevent the country from decisively exiting the Kremlin orbit. In other words, Russia wins when Ukrainian corruption continues, regardless of the outcome on the battlefield. Ukrainian victory will only come when both Russia and corruption are decisively defeated.

Brian Mefford is the Director of Wooden Horse Strategies, LLC, a governmental-relations and strategic communications firm based in Kyiv. He is a senior nonresident fellow at the Atlantic Council and has lived and worked in Ukraine since 1999.

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As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

Ukrainian President Volodymyr Zelenskyy traveled personally to Lithuania on Tuesday, but his last-minute intervention was unable to sway the doubters and secure the kind of unambiguous membership commitment Ukraine has long sought. “Today I embarked on a trip here with faith in decisions, with faith in partners, with faith in a strong NATO. In a NATO that does not hesitate, does not waste time, and does not look back at any aggressor,” he wrote in a carefully worded but emotionally charged post following publication of the summit declaration. “I would like this faith to become confidence; confidence in the decisions that all of us deserve and every warrior, every citizen, every mother, every child expects. Is that too much to expect?” In a social media commentary posted earlier on Tuesday, he was significantly more outspoken, criticizing NATO’s failure to state a specific membership timeline as “unprecedented and absurd.”

Others were in even less diplomatic mood. “No amount of spin will turn this into a “great” or “historic” summit. Best not even to start,” posted former Estonian President Toomas Hendrik Ilves. Some fellow politicians in the Baltic region clearly agreed. “This is not leadership,” tweeted Lithuanian MP Zygimantas Pavilionis. “This is appeasement that normally leads to final defeat.” In Kyiv, Ukrainian Ambassador for Strategic Communications Olexander Scherba questioned the logic behind the apparent fear among some NATO members of provoking Putin. “The strategy of “not provoking Russia” is in reality a strategy of provoking Russia,” he wrote. “That’s how it goes with bullies. Will the West ever see it?”

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Meanwhile, many in Ukraine expressed anger at the apparent lack of urgency among the country’s international partners. These feelings of frustration were summed up in a powerful post by veteran Ukrainian anti-corruption activist Daria Kaleniuk: “Ukraine needs “strategic patience”. Should I patiently wait until a Russian missile strikes my apartment in Kyiv with my kids inside? Or should I patiently wait for my son to turn eighteen and go to fight in a war against the largest threat to NATO? Delays cost lives!”

Despite the undeniable mood of anti-climax in Ukraine, the country’s famed wartime spirit of resilience was also on display as Ukrainians reacted to news from Lithuania. “Disappointment but not discouragement. Next stop, Washington DC,” posted Alyona Getmanchuk, director of the Kyiv-based New Europe Center think tank and nonresident senior fellow at the Atlantic Council’s Eurasia Center, in reference to next year’s NATO summit, which is scheduled to take place in the US capital.

Ukrainian MP Oleksiy Goncharenko echoed this sentiment regarding the need to focus on securing a firm membership commitment at the 2024 summit, but warned that further delays could have grave consequences for public opinion in Ukraine. If there is no progress toward joining NATO by this time next year, he wrote, Ukrainians will ask: “So we are good enough to die for democracy and not good enough to live together with other free nations in one alliance?”

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

The structure built by Putin has become a snake pit. Perhaps a “house of cards” is a more fitting term. Having previously refrained from sanctioning Yevgeniy Prigozhin, the ruthless leader of the Wagner paramilitary group, Putin spoke following the mutiny of punishing his enemies, even if such efforts are complicated by Wagner’s penetration into the Russian elite. The first arrest related to these consequences (still unconfirmed) appears to be that of Russian General Sergey Surovikin.

Prigozhin had been engaged in a power struggle with the military leadership for some time. Specifically, his attacks have targeted Russian Minister of Defense Sergei Shoigu and Chief of the General Staff Valery Gerasimov. The confrontation was exacerbated after last February’s invasion by the increasing relevance that the head mercenary and his followers have gained. Their relative effectiveness compared to the regular Russian army—which collapsed in the early onslaught of the war—brought Wagner into the spotlight inside and outside of Russia. In addition to its military actions, the group’s cruelty went viral on social media, as did its sermons in the courtyards of the prisons Wagner forces toured, recruiting convicted criminals of all kinds.

The mercenary leader’s strong connection with the great leader—a connection forged during the murky stage of the president’s public debut in Saint Petersburg in the 1990s—seemed to give Prigozhin a blank check. He first emerged on the scene as “Putin’s chef,” a nickname earned from managing the catering service of someone well acquainted with the dangers at the table, himself being a master in the use of poison as a political weapon.

Before the insurrection, the outspoken warrior had been making accusations of all kinds of irregularities, misconduct, and mistreatment against his two enemies: that they had claimed credit for Wagner’s victory in Bakhmut, that men were dying so they could “get fat in their mahogany offices,” and that they had denied his fighters necessary ammunition and support. And, most importantly, that they had deceived Putin about the progress of the military campaign.

The speech that kicked off the mutiny goes even further. No one had dared to question Putin’s justification of the invasion based on a victim mentality incessantly fed to the Russian people. The few in Russia who dared to dissent, such as Vladimir Kara-Murza, immediately found themselves behind bars.

Thus, Prigozhin’s words should be considered inflammatory: a qualified member of the establishment dared to openly and boldly denounce the falsehood of “the story that there was insane aggression on the part of Ukraine, and they were going to attack [Russia] together with the entire NATO bloc.” Careful not to mention the president by name, he stated that, contrary to Kremlin messaging, the war served “not to demilitarize and de-Nazify Ukraine,” but rather “it was launched for completely different reasons.” He implied that the disaster was orchestrated by high-ranking military officials (driven by economic greed and vanity), in combination with “some oligarchs.”

[The] turmoil has shattered the thesis that the Euro-Atlantic community must not humiliate Putin for fear of provoking him, with the unpredictable consequences regarding the use of nuclear weapons that doing so would entail.

Putin’s response was not long in coming. In his televised address on June 24, he labeled the uprising as “a stab in the back of [the] country and [the] people.” His references to the Russian Empire—a frequent topic of his outdated musings—were to be expected, but his implicit identification with the ill-fated Tsar Nicholas II was surprising.

He equated the situation triggered by Prigozhin to the prelude of the upheaval of 1917, which led to the collapse of the system. Was he seeking, in his association with the tragic figure, a symbolic reincarnation of the tsar—in his case, having made the right decisions to avoid falling into the black hole of violence that characterized those years when “Russians killed Russians, brothers killed brothers”? It was a diatribe made with his citizens in mind, who retain a collective memory of that terrible period and who found their livelihoods crushed during the 1990s following the dissolution of the Soviet Union.

During the uprising, the lack of response was salient, both from the siloviki (the economic and political elite) and the common people. There was no notable support of—or clear opposition to—Putin, who exploits the fact that people cling to the status quo out of fear of the unknown.

Prigozhin has nonetheless proven to be a torpedo aimed at Putin’s narrative. He punctured the myth of a war of necessity, of an inevitable war for historical justice. He undermined Putin’s explanation of an existential struggle against US aggression disguised as NATO. Furthermore, the turmoil has shattered the thesis that the Euro-Atlantic community must not humiliate Putin for fear of provoking him, with the unpredictable consequences regarding the use of nuclear weapons that doing so would entail. This thesis has justified the countries’ stinginess in sending to Ukraine certain equipment classified as offensive and the West’s delay in accepting stark realities, such as the urgent need for full operational readiness in the air.

The Euro-Atlantic community must move away from the habit of delaying decisions based on speculation about the consequences of its actions for third parties. It needs to look beyond the pipe dream of an immediate peace negotiation based on the stalemate on the front or a Kremlin-asserted “right” to subjugated areas. NATO allies’ opportunity to demonstrate determination when facing Russia will come soon—on July 11 in Vilnius at the NATO Summit.

Ana Palacio is a former minister of foreign affairs of Spain (2002-2004) and former senior vice president and general counsel of the World Bank Group. She is also a member of the Atlantic Council’s Board of Directors.

A version of this article originally appeared in El Mundo. It has been translated from Spanish by the staff of Palacio y Asociados and is reprinted here with the author’s and publisher’s permission.

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The mechanisms of corruption in Iran

Masoud Mostajabi and Britt Gronemeyer — Fri, 07 Jul 2023 20:41:19 +0000

On June 13, the Atlantic Council’s Iran Strategy Project hosted a virtual event, “The Mechanisms of Corruption in Iran” to discuss the nature of corruption and sanctions in Iran as well as the social, economic, and political implications of these issues.

The Atlantic Council’s Scowcroft Middle East Security Initiative Director, Jonathan Panikoff conducted opening remarks, stating that discussions of Iran’s current economic situation must also address the corruption that exists within the country given its rampant nature. This was emphasized by Atlantic Council nonresident senior fellow Nadereh Chamlou who served as the moderator for the session.

In order to discuss the complexities of corruption within Iran, it is first important to define corruption. Associate Professor of Finance at the University of Dallas, Ali Dadpay, explained that corruption is the use of a public position for personal gain. Dadpay shared how this phenomenon manifests in situations such as the importation of luxury vehicles into the Islamic Republic. He recalled how foreign made vehicles were banned from Iran, however, members of Parliament were able to import foreign made luxury vehicles due to their positions of power.

Causes of Sanctions and Corruption

The beginning of the conversation included a review of the causes of corruption in Iran and specifically analyzed the role that sanctions play in its prevalence. To initiate the discussion, Chamlou mentioned a study by one of Iran’s top economists that found only 20% of corruption can be traced back to sanctions, whereas 80% is attributed to other factors. This begs the question, what could that something else be?

Entrepreneur Majid Zamani claimed that while sanctions are not the only cause of this corruption, they have created a plethora of opportunities for rent-seeking, which only those who are ideologically connected to the regime have access to.

Within Iran specifically, Zamani discussed the existence of a theocratic system, stating that because people are selected for leadership based on their loyalty to ideology, rather than merit, the political system is poorly organized and thus more susceptible to corruption. Furthermore, Dadpay argued that because Iran has a nationalized economy with extensive regulations, as opposed to a globalized economy, the government benefits from corruption and monopolization. Zamani added that the banking system epitomizes this vulnerability to corruption due to the interest rates, corrupting all loans.

Impact of Corruption & Sanctions

The panel then moved to the discussion of how corruption and sanctions have manifested in Iranian society. Given the US Government’s prioritization of US interests, as opposed to those of the Iranian community, Atlantic Council’s nonresident senior fellow Brian O’Toole and Dadpay both recognized that even though these sanctions are targeted, they will ultimately influence all Iranians, by creating a demand for sanctions evasion and a market that avoids financial responsibility. When asked whether Iranians could avoid corruption in the private sector and still succeed, Zamani claimed that the entire private sector in Iran is impacted by its relationship to the government. However, there is a spectrum of involvement, with one end including those who are loyal to the government and comfortable with the corruption and the other end comprising of individuals trying to avoid engaging in corrupt behaviors but ultimately having to comply at times in order to survive. He also clarified that although they do not make up the majority of the GPD, the Iranian private sector includes small market owners and medical professionals, occupations that comprise the bulk of society.

How to address it

After discussing the causes and effects of corruption in Iranian society, the panelists moved to their recommendations as to how to address it. O’Toole said that it takes time, so patience and persistence are crucial, and tackling corruption begins by addressing root problems. While pursuing flashy cases of corruption may be more alluring, it often only targets a single perpetrator rather than the source. To tackle the wider system would require transparency at every stage, even the more mundane. Dadpay agreed with O’Toole, advocating for a clear and transparent legal framework and stating that accountability in corruption cannot be achieved without an explicit and independent judiciary branch. In order to achieve transparency and accountability, according to Zamani, civil society must demand it from the government, through civil disobedience and outward refusal to engage in a corrupt system of governance. Lastly, moderator Chamlou included her own belief that tackling corruption in Iran would require dismantling networks of patronage and government insiders.

Masoud Mostajabi is a Deputy Director at the Atlantic Council’s Middle East Programs.

Britt Gronemeyer is a Young Global Professional with the Middle East Programs at the Atlantic Council.

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As Guatemala’s voters signal a left turn, great powers are watching closely

María Fernanda Bozmoski, Eva Lardizábal — Mon, 26 Jun 2023 21:09:32 +0000

What does an election reveal if not the winner? Since the end of Guatemala’s Civil War in 1996, no candidate has won a presidential election in the first round. The election on Sunday held to this pattern, although abstention and null votes (a blank ballot or write-in for an ineligible candidate) were the clear winners.

Sandra Torres, a well-known but polarizing figure in her third bid for the presidency, and Bernardo Arevalo, a congressman, first-time presidential hopeful, and former diplomat with a strong anti-graft message, have advanced to the second round, which will be held on August 20. The low voter turnout of 60 percent and high percentage of null votes—four times as high as in the last elections, making up nearly a quarter of all votes—reflect a prevailing sense of apathy among Guatemalan voters and an erosion of confidence in an electoral process that, to date, has been marred by seemingly arbitrary court decisions on candidates’ eligibility to run. For this cycle, political parties brought a record number of legal actions against each other, with at least three presidential candidates and other candidates for congress barred from running.

Nonetheless, Guatemala’s runoff election to replace term-limited Alejandro Giammattei will have far-reaching implications, both for the region and beyond. For one, Guatemala’s next president will be less ideologically conservative than the last three administrations in Central America’s most populous country. The emergence of more left-leaning governments is in line with trends from other recent elections in the region (Honduras, Chile, Colombia, and Brazil, for example).

The next president’s decision to align with China or maintain relations with Taiwan will reverberate beyond Guatemala’s borders. The outcome could determine whether the Biden administration has a reliable partner for its strategy in Central America—which is designed to help quell the surge of migrants on the US-Mexico border and to combat graft and corruption. And the economic challenges facing the country, including poverty, inequality, and fiscal deficits will require comprehensive policy measures and hard reforms from whoever takes office in 2024. That’s a tall order when considering the two candidates for the August runoff.

Geopolitical implications

Guatemala is host to one of the last two Taiwanese embassies in Central America (the other is in Belize), and one of only seven in Latin America and the Caribbean. The outcome of the runoff election has the potential to tip the region’s balance toward China once and for all, thus shaping the future trajectory of not just Guatemala but also the broader interests of the United States and the rest of the Western Hemisphere. China has been calling on Guatemala to make the “right choice” and has overtly increased its footprint in the region in the last few months—first through Honduras’ decision to break off ties with Taiwan in March and then with reports of late-stage talks for the establishment of a Chinese military training facility in Cuba. Despite this, leading candidate Torres has vowed to maintain diplomatic ties with Taiwan. Arevalo’s position is less clear. He has stated that Guatemala’s sovereignty and interests are most important and that there is no reason to “jump trains.” After all, China is Guatemala’s second-biggest commercial partner, behind the United States.

Closer to home, the runoff election results may determine the extent to which the next Guatemalan government is willing to collaborate with the United States to address matters such as irregular migration, corruption, and transnational crime. As a political insider whose party has been embroiled in several corruption investigations, Torres is seen as unlikely to take strong measures against suspected corruption within the party system. On the other hand, Arevalo is known as the anti-corruption congressman. His party—Movimiento Semilla—is all but a symbol of the 2015 “Guatemalan Spring,” which resulted in the resignation and arrest of then-president Otto Perez Molina. Arevalo announced on Monday that if he were to win the election, he would convene former judges and prosecutors to create a national anti-corruption advisory group. With increasingly unreliable allies across the region, the Biden-Harris administration’s ability to carry out its strategy toward Central America hinges upon the election of a trustworthy and dependable leader in Guatemala.

Economic implications

Guatemala is the largest economy in Central America, but with some of the highest rates of poverty and inequality in the region, as well as the lowest rate of tax collection in Latin America. While Torres would likely continue with a more conservative economic agenda focused on macroeconomic stability, market-oriented reforms, attraction of foreign investment, and fiscal discipline, less is known about Arevalo’s plan. The next president will also have to deal with a growing fiscal deficit and continued social demands. The president will need to work with a split Congress to pass budgets—the country failed to do so in 2020 and 2021, when protestors set the Capitol on fire—to support the population’s needs and continue to improve the country’s basic infrastructure. To address the low rates of tax revenue in relation to the size of the economy, the next administration will also have to undertake important reforms on the fiscal front.

Should Torres win in August, she would likely pursue a robust social domestic agenda—she’s already promised bags of basic food items for the most vulnerable and cuts in taxes on basic foods. Meanwhile, Arevalo has floated the idea of a public hospital for cancer treatment and a state-owned enterprise that would create a network of pharmacies with medicines at “fair prices.” But his economic plan, which will need some refinement over the next six weeks, depends on the creation of “jobs, jobs, jobs”—the lack of which is a main driver of migration in Guatemala. Arevalo has laid out plans to bring Guatemala’s citizens into the formal economy while vowing to eradicate poverty and boost quality education. With increasingly few resources to finance the robust social programs these center-left candidates are proposing, breaking ties with Taiwan in favor of China could just make economic sense. This would be especially attractive if a landmark infrastructure project accompanied the announcement. For example, Costa Rica received a national stadium in 2011. More recently, El Salvador received a stadium and a library in 2019, and, following President Xiomara Castro’s announcement of breaking diplomatic ties with Taiwan this year, Honduras received a pledge for Chinese investment in a major hydroelectric dam project.

Guatemala’s voters will likely be most concerned with their pocketbooks when they head to the ballot box in August. Urban centers want a leader who will work to root out corruption—which could give Arevalo an edge. But their choice will reverberate far beyond the country’s borders and could reshape the geopolitical map in the hemisphere.

María Fernanda Bozmoski is the deputy director of programs at the Adrienne Arsht Latin America Center.

Eva Lardizábal is an assistant director at the Adrienne Arsht Latin America Center.

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Francis in the Kyiv Post: Russia’s Sopranos

Atlantic Council — Mon, 26 Jun 2023 18:09:00 +0000

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Putin’s weakness has been revealed. Here’s how Russia’s neighbors are reacting.

Andrew D’Anieri — Sun, 25 Jun 2023 15:16:54 +0000

Yevgeniy Prigozhin’s Wagner Group rebellion began in Ukraine near Bakhmut, halted on Russia’s M4 highway roughly two hundred kilometers south of Moscow, and ended with Prigozhin reportedly on the way to Belarus. While the insurrection was contained largely to the Russian border cities of Rostov-on-Don and Voronezh, Wagner’s so-called “march for justice” laid bare the weakness of Russian President Vladimir Putin’s regime—in ways that are likely evident to surrounding, largely post-Soviet countries. This peek behind the Kremlin curtain could have significant ripple effects across Eurasia as Russia’s neighbors react to the crisis.

As Wagner forces turned toward Moscow, Putin called Kazakh President Kassym-Jomart Tokayev to brief him on the situation. Kazakhstan’s readout of the call was brief but called the rebellion “an internal affair of Russia.” This seemingly mundane bit of diplomat-speak carried an outsized amount of geopolitical weight—it implied that Kazakhstan would not help Russia in its “internal affair.” Just eighteen months ago, Tokayev had called the Russian-led Collective Security Treaty Organization (CSTO) to help shore up his own mandate when popular protests spun into an armed uprising. Hours later, 2,500 mostly Russian CSTO troops entered Kazakhstan, violently put down the unrest, and exited the country six days later. Now, with Putin facing a similarly fast-moving threat, Tokayev signaled that Kazakhstan wouldn’t be there to help.

Tokayev’s indifference is even more interesting in the context of his Eurasian Economic Union (EEAU) speech on May 24 chiding Putin for his ultra-close relations with Belarus at the expense of the other members of the EEAU, including Kazakhstan. Kazakhstan and Russia share the world’s longest land border, but Tokayev may continue to seek diplomatic space between Astana and Moscow.

Russia’s preeminence in Eurasia was once taken as a given, but the specter of Russian power may now be waning…

Almost 750 kilometers south of Rostov-on-Don, Georgia’s borders remained open even as President Salome Zourabichvili called on Prime Minister Irakli Garibashvili to convene the country’s security council and urged authorities to secure its border crossings with Russia. Garibashvili opted not to call the security council together and appeared to take no measures at all to prepare for any potential ripple effects of instability in Rostov-on-Don and beyond. Both the president and prime minister belong to the anti-Western Georgian Dream (GD) party, which has sought closer ties with Moscow as a means of ensuring “stability” for Georgia. The Prigozhin rebellion undermines some of GD’s talking points as it looks to consolidate power ahead of hotly contested parliamentary elections in October 2024.

Putin’s calls to Uzbek President Shavkat Mirziyoyev and Armenian Prime Minister Nikol Pashinyan yielded relatively neutral readouts, though Pashinyan asked to stay apprised of further developments. While Pashinyan has expressed anger at the fecklessness of the CSTO to support Armenia’s defense against Azerbaijan, Russia remains the nominal guarantor of stability in the disputed region of Nagorno-Karabakh and Armenia’s key backer. A weaker Russia would further strengthen Azerbaijan’s hand in peace negotiations.

While the mutiny was ongoing, Turkish President Recep Tayyip Erdogan declared Ankara’s readiness to play a role ensuring “peace and harmony” in Russia. Iran’s foreign ministry spokesperson emphasized support for “rule of law.” Both countries already maintain commercial and military ties with Moscow but don’t depend on the Kremlin for legitimacy or as a power backstop. Each could seek to leverage Kremlin weakness and extract further concessions.

The end of the immediate crisis came via Russia’s closest neighbor and ally: Belarusian dictator Alyaksandr Lukashenka won credibility with Putin for brokering the agreement that halted Prigozhin’s march on Moscow. For years, Putin has financially backed Lukashenka’s grip on power with billions of dollars and more recently has moved to integrate Belarus into a “union state” with Russia. The Prigozhin agreement turned the tables on Putin, making the oft-bumbling Lukashenka look competent, decisive, and more useful to the Kremlin—at least for now.

But Lukashenka may soon face his own problems at home. The Kastus Kalinouski Regiment, which currently fights on the side of the Ukrainian army, issued a call to take up arms against the Lukashenka regime. The democratic forces of Belarus, led by Sviatlana Tsikhanouskaya, also reinvigorated opposition efforts to oust the longstanding dictator.

And the war in next-door Ukraine carried on. There, observers watched with glee as Russian authorities squirmed and flailed to try to maintain order in four Russian regions. Ukrainian memes mocked and cheered on Russian infighting, while Ukraine’s armed forces liberated a village that had been under Moscow’s occupation since 2014.

When Prigozhin agreed to halt Wagner’s advance, Ukrainian President Volodymyr Zelenskyy took a more serious tone; he acknowledged the chaos but appealed to the West for more support: “Ukrainian soldiers, Ukrainian guns, Ukrainian tanks, Ukrainian missiles are all that protect Europe from such marches as we see today on Russian territory.” Prigozhin’s march toward Moscow began not over Russia’s maximalist goals in Ukraine, but over the methods by which they should achieve them. Kyiv is gearing up for the war to continue, despite turmoil in Russia. Even amid the confusion, Russian forces fired rockets at civilian apartment blocks in Kyiv, killing three people.

Prigozhin’s Wagner insurrection exposed the brittle nature of the Putin regime and the limits to the power it can project even within Russian borders. Russia’s preeminence in Eurasia was once taken as a given, but the specter of Russian power may now be waning, with major implications for the region. Leaders and elites across Eurasia will now be closely tuned in to Moscow for further signs of weakness. Declining Kremlin power could usher in a new era of more independent foreign policies in Central Asia and the South Caucasus, as countries look to grow relations with the US-led West, China, and Turkey.

Andrew D’Anieri is assistant director at the Atlantic Council’s Eurasia Center. Follow him on Twitter at @andrew_danieri.

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Pavia joins i24NEWS to discuss President Kais Saied’s ongoing crackdown on key opposition figures.

Atlantic Council — Thu, 22 Jun 2023 19:51:56 +0000

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Pavia joins i24NEWS to discuss Europe’s approach towards Tunisia and the concerning democratic backsliding within the country.

Atlantic Council — Thu, 22 Jun 2023 19:50:34 +0000

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Imran Khan on the failed India-Pakistan thaw and why he’s ‘prepared for everything’—even death

Wajahat Khan — Wed, 21 Jun 2023 00:54:23 +0000

This article was updated on June 21.

Imran Khan, Pakistan’s former prime minister, has been on the warpath in the streets of Pakistan against the military-led establishment ever since he was voted out by parliament last year. Once seen as the military’s darling and reportedly assisted by the military and its intelligence agencies in the elections that brought him to power in 2018, he has now turned on the army and its chief. In an interview with the Atlantic Council this week, he also claimed that the former army chief General Qamar Javed Bajwa told him “frequently” that the army was not equipped or prepared for a war with India.

In the interview, conducted June 18, Khan confirmed that there was indeed an opening for peace with India—despite New Delhi’s rescinding of disputed Jammu and Kashmir’s semi-autonomous status in 2019—and the Pakistani army chief favored it. (Bajwa had previously revealed this plan to reporters.) Normalizing trade between the two nuclear-armed countries was reportedly one of the steps that was to be taken before Indian Prime Minister Narendra Modi could visit Pakistan.

Watch the full interview

However, despite successfully deescalating a military standoff in 2019, Khan couldn’t explain why he faltered on trade normalization with New Delhi after India changed its relationship with the disputed territory of Kashmir by removing its special status in the Indian union. Khan responded to India’s Kashmir move by closing the border for trade with India.

“I don’t remember the trade talks,” Khan said. “All I know is that there was supposed to be a quid pro quo. India was supposed to give some concession, give some sort of a roadmap to Kashmir, and I was going to then host Prime Minister Modi in Pakistan. But it never materialized.”

Bajwa’s plan, which included a ceasefire with Indian forces on the Line of Control in Kashmir, was a lost opportunity for establishing long-term peace with Pakistan’s archrival. “I tried everything, but I came across this brick wall,” Khan said. “And I realized it’s something to do with the RSS-BJP [the Modi-aligned ideological movement and political party] mentality where they’ve cashed in on hostility with Pakistan. That’s all.”

Transcript

Jun 20, 2023

Read Imran Khan’s full Atlantic Council interview on failed peace with India, Pakistan’s plight, and his own fate

By Atlantic Council

In an Atlantic Council conversation, former Pakistani Prime Minister Imran Khan shared details about a potential peace plan with India and discussed the future economic and political prospects for Pakistan.

Economy & Business Elections

Currently, Khan says he is facing nearly 160 legal cases, ranging from terrorism to corruption to conspiracy against the state—a roster that keeps him busy court-hopping to secure bail or relief. The seventy-year-old former cricket champion-turned-populist firebrand spends his weekdays commuting from city to city in protective gear to attend court hearings. Every evening, he addresses his followers on YouTube from his residence in Lahore, which just last month was surrounded by security forces.

Khan said he fears that he may be incarcerated over the next two weeks but admitted that he’s “prepared for everything,” including the prospect of being assassinated. (Khan was wounded in an assassination attempt last November and claims to have survived another plot in March.)

Reviewing his performance as premier, Khan admitted to political blunders during his tenure, including granting an extension of service to Bajwa, who Khan claims was responsible for engineering his ouster. He did not elaborate on the exact reasons for their break-up.

Khan confessed that he was dependent on the military’s clout to push his reforms through parliament because he had a weak coalition government with a razor-thin majority. But this admission—needing the military to remain in power—runs counter to his claim that he didn’t need or get the military’s support to achieve power in the 2018 general elections.

“If you want a reform program and to take on the big mafias, you cannot do it if you have a coalition with government, with a thin majority, you can’t do it,” Khan said. “So that is the mistake I made. And that’s why I became more and more dependent on the army chief, because he could get a budget passed because they have the clout. It’s exactly what’s happening right now. If the military withdraws support, this coalition would fall apart in days.”

Crucially, Khan also said he sacked the current army chief, General Asim Munir, from his previous position as the director-general of the Inter-Services Intelligence (ISI) because he “couldn’t work with him.” He did not explain why. Yet he went on to declare his willingness to talk to the all-powerful chief of army staff now—but not to his civilian counterparts—an unsustainable position in a multi-party parliamentary democracy that he wants to lead again. Claims by former members of Khan’s own party suggest that Khan sacked Munir because he had alleged that Khan’s wife was involved in corruption; Khan has denied these allegations.

While Khan defended his economic and foreign policy record and claimed that his Pakistan Tehreek-e-Insaf (PTI, or Movement for Justice) is the most popular party in the country’s history, he also claimed that ceding further space to Pakistan’s all-powerful military while he was in power was the right thing to do—until it wasn’t.

But as Pakistan faces the prospect of economic default, and his quest for an immediate election seems to be waning, Khan stands isolated. Over one hundred of his party leaders, including many senior deputies, have left the PTI, through what he claims is coercion by the military. Thousands of party workers face trials over the riots of May 9, when many Pakistanis took to the streets to attack government and military installations while protesting what Khan says was his provocative detention, designed to trigger mass outrage.

“The country is going into a black hole,” he said. “The only policy is to get rid of Imran Khan. That’s no policy. I mean, what is the future of Pakistan?”

Meanwhile, the military-backed regime continues its legal and information crackdown against sections of the press and public who dare to support Khan on mainstream and social media. Also, as the military claims that Khan and the PTI leadership tried to sow dissent in the rank and file of the all-powerful army—treason by definition and law—Khan has denied that he has any active links to senior military leadership.

None of Pakistan’s foreign friends and allies have issued any statements in favor of Khan. The US State Department said last week that it would refrain from comment as Khan is a “private citizen”—a categorization that he shrugged off without expressing regrets about his bashing of the United States following his ouster. Khan continued to blame a senior US official for, as Khan claims, making his removal as prime minister a condition for US assistance and goodwill—a claim that he watered down earlier this year while blaming Bajwa for poisoning the US view of Khan through Husain Haqqani, Pakistan’s former ambassador to Washington. (Haqqani has rejected Khan’s allegations as baseless and his attorney has issued a cease-and-desist notice to Khan, threatening legal action if Khan keeps on alleging Haqqani’s involvement in the former premier’s ouster. The US State Department has said that “there is not and there has never been a truth to” Khan’s claims that the United States was involved in removing him from power, adding that “we will not let propaganda, misinformation, and disinformation get in the way of any bilateral relationship, including our valued bilateral [partnership] with Pakistan.”)*

Further evidence of Khan’s shifting position is his party’s active support for lobbying efforts inside the United States, including letters from members of the US Congress admonishing the Pakistani military’s crackdown. Furthermore, not a single influential member of the fifty-seven-state Organization of Islamic Cooperation (OIC), a grouping that Khan claims to have galvanized, has come out in support of him.

Khan has responded by saying that as long as he has the people of Pakistan behind him, he doesn’t need foreign help. How he will do this now is unclear considering that many of his party’s senior leaders have deserted him after having been arrested and released by the authorities. Khan claims they were coerced and has named new, younger members to replace them. He believes strongly that he is still the most popular political leader in Pakistan and this will help him yet again in the elections that currently are expected to be held in October or November.

Khan said that popularity is the reason why his enemies have tried to kill him. “As long as that reason is there, they could try again,” he said. “So, in that sense, mentally, I mean I have overcome the fear of dying. I feel that I should be prepared for everything.”

Wajahat S. Khan is a nonresident senior fellow at the Atlantic Council’s South Asia Center and an Emmy-nominated journalist and author. He is the former bureau chief in Kabul and Islamabad for NBC News.

This article was updated to include the US State Department’s denials of Khan’s allegations about US involvement in his ouster.

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Western companies are still financing the Russian invasion of Ukraine

Nataliya Popovych — Tue, 20 Jun 2023 11:39:15 +0000

Despite tremendous business interest in Ukraine’s reconstruction and development, a large number of Western companies continue to undermine Kyiv’s efforts by contributing to the Kremlin’s war chest. This ongoing corporate complicity must be stopped if Ukraine’s meaningful recovery is to happen any time soon.

The recent destruction of the Kakhovka dam is one of over 90,000 suspected Russian war crimes in Ukraine. Clearly, no reconstruction of Ukraine can succeed unless Russia is completely deprived of the resources to continue its invasion. The international community cannot have a meaningful conversation on recovery or reconstruction unless international companies that continue to feed Putin’s war chest cease their business operations in Russia entirely.

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When Russia’s full-scale invasion of Ukraine first began in February 2022, some Western businesses demonstrated swift and early exits from the Russian market, putting values over profit. While these often high profile departures generated a lot of media coverage, in reality the majority of Western firms have chosen to remain in Russia.

According to data from the Kyiv School of Economics (KSE), out of 1,361 Western companies with Russian subsidiaries at the start of the full-scale invasion, only 241 (17%) have completely exited Russia. The remaining Western companies generated $136 billion in revenues during 2022, thus helping the Kremlin to finance the war in Ukraine.

Perhaps even more staggering than these numbers are the excuses used by the leadership of Western multinationals to justify their continued presence in Russia. The most common justifications for persisting with “business as usual” in Putin’s Russia primarily revolve around the provision of essential goods. This argument is widely cited despite the fact that it is rarely supported by the nature of the businesses in question.

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It should be crystal clear by now: All western companies that have not left the Russian market since the full-scale invasion of Ukraine began almost seventeen months ago are complicit in the Putin regime’s war crimes and crimes against humanity. In a very real sense, Western businesses that refuse to leave Russia are silent enablers of Putin’s invasion. Any meaningful conversation about Ukraine’s recovery and reconstruction should start by shedding a bright light on the issue of corporate complicity.

Ukraine’s true recovery can only happen when international businesses realize this is not just a war against Ukraine. They must acknowledge that this is a Russian war against the entire rules-based international order. It is a very deliberate Russian attack on the peace and stability that Western businesses have greatly benefited from over the years.

International efforts to advance Ukraine’s recovery are absolutely vital. Priorities should include rebuilding Ukrainian human capital and upgrading Ukraine’s energy infrastructure to set the country firmly on the path toward a green energy future. International companies have a tremendously important role to play in this process, but actions and values must also align.

By countering Russia, Ukraine is providing an invaluable service to the entire free world. Ukrainians who are risking their lives want to deal with international businesses that are ready to sacrifice part of their profit. We do not want to deal with war profiteers, but with those who understand that there is more at stake than just the bottom line. This is what the new era of corporate social responsibility is all about. In Ukraine, any company’s commitment to corporate social responsibility is measured by its willingness to accept a drop in revenues in order to disable the Russian war machine.

The flooding that resulted from the recent dam destruction in southern Ukraine is flushing down the reputation of companies still doing business with and in Russia. Western businesses carry an important responsibility in places where they operate, especially in conflict-ridden areas. Such companies can no longer afford to sit on two sides of the same fence. Either they are part of Ukraine’s reconstruction and recovery efforts, or continue to support the destruction of its physical and human capital by feeding the Kremlin’s war chest.

Nataliya Popovych is a co-founder and steering committee member of B4Ukraine and the founder and president of One Philosophy.

In 1958, public discontent led to the monarchy’s overthrow. During the subsequent republic era, from 1958 to 2003 and under leaders like Saddam Hussein, Iraq witnessed a transition to a presidential republic. Divisions, instability, foreign conflicts, and crippling sanctions revealed the limitations of both systems. Iraq’s journey towards stability and effective governance remains an ongoing struggle.

The US-led invasion in 2003 brought about a new constitution and transformed Iraq’s political system into a federal parliamentary republic. The parliament emerged as the most powerful government branch, with the authority to vote in or out the president and prime minister, pass the budget bill, ratify international conventions, and approve cabinet and ambassadorship positions. The parliament, which is known as the Council of Representatives, is one of the most diverse elected councils in the Middle East; Iraqi groups, particularly women and minorities, are represented proportionally. Despite obstacles and the influence of money and weapons, Iraq has managed to hold national elections regularly every four years. This has resulted in peaceful transitions of power, a significant achievement that was lacking in Iraq prior to 2003.

Recently, in his Foreign Policy article, former Iraqi President Barham Salih called for what is essentially a presidential system. This call harkened back to the message of the Tishreen protest movement, made up of Iraqis taking to the streets in October 2019 to demand political reform. Multiple Shia political figures have also expressed their support for a presidential system.

While some argue that a shift to a presidential system—with a balanced legislative branch and a president elected through popular vote—could help overcome Iraq’s sectarian divide and facilitate reforms, what really matters is the quality of leadership and the resilience of civil society. There is a misperception among the Iraqi youth as well as the elite that only a strongman can fix Iraq’s many problems while the issues are way more complex than that. The current constitution, despite its shortcomings, provides the necessary tools that Iraqi leaders need to establish a stable, prosperous, and democratic country. For example, the Iraqi Political Party Law of 2015 provides legal tools to establish new parties—currently, there are hundreds of new parties registered in Iraq. This may lead to chaos, but it defuses political disagreement among various groups. Additionally, the constitution gave significant executive power to a prime minister to rule the country, while giving the parliament strong oversight.

What Iraq truly needs are democratic leaders who prioritize the nation’s interests over personal gain. For example, Iraq needs leaders that will prioritize job-creation reforms, rather than channeling public wealth to buy votes. Iraq also needs a strong civil society capable of uniting Iraqis on crucial matters. Leaders must be willing to make necessary compromises, embrace diversity, and treat citizens based on democratic principles rather than sectarian or ethnic identities. The achievement of democracy and stability relies on democratic leadership and a vibrant civil society that effectively mobilizes people towards shared national goals.

Unfortunately, Iraq currently lacks a robust civil society capable of nationwide mobilization and unity. Furthermore, the existing political party structure fails to embrace Iraq’s diversity, favoring specific sects, ethnicities, or religious groups. Although the October 2019 demonstrations showed promise in uniting Iraqi youth across ethnic and sectarian lines on economic and justice issues, their aspirations were not fully realized in reshaping the political landscape.

How the international community plays a role

Iraq’s current parliamentary system faces significant obstacles, such as sectarianism, ethnic division, political fragmentation, corruption, weakness in its institutions, security concerns, and socioeconomic and development issues. Tackling these issues requires a concerted effort to strengthen institutions and, in those institutions, promote inclusivity, combat corruption, foster reconciliation, and ensure effective governance. But efforts to take on these challenges shouldn’t focus solely on institutional change—they should also focus on investing in the current and future leaders of the country.

The international community, particularly the United States and Europe, has made significant investments in Iraq’s democratic system. Unfortunately, corruption and sectarianism have undermined these investments over time, highlighting that it’ll take an extensive and holistic strategy to improve democracy in Iraq.

That strategy should first include investments in Iraqi youth, as they will ultimately shape the country’s future. The United States and European Union should specifically prioritize empowering Iraqi youth, developing their leadership abilities, and creating a sense of national unity. By investing in education, creating opportunities for civic participation, and providing platforms for dialogue and cooperation among the diverse communities within Iraq’s borders, international support could foster a new generation of democratic leaders that prioritize all Iraqis’ interests over individual interests.

Additionally, the international community should increase its financial support for civil-society organizations in Iraq, as these play an instrumental role in reconciling ethnic divisions while promoting democratic principles among younger people.

By supporting the development of Iraqi youth and promoting a robust civil society, the international community can help invest in Iraq’s democratic future, unify all Iraqis, and lead the country towards peace, prosperity, and democratic stability.

Sarkawt Shamsulddin is a nonresident fellow at the Atlantic Council’s Middle East Programs and was a member of the Iraqi Parliament from 2018 to 2021.

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Younus in Al Jazeera: Who is Imran Khan?

Atlantic Council — Thu, 15 Jun 2023 14:00:51 +0000

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Russia’s failing Ukraine invasion is exposing Putin’s many weaknesses

Anders Åslund — Mon, 12 Jun 2023 00:29:11 +0000

Vladimir Putin’s disastrous invasion of Ukraine is exposing all of his personal weaknesses as a ruler. It is also casting an unforgiving light on the extensive damage he has done to Russia.

In the early 1990s, I encountered Putin several times at international meetings in St. Petersburg, but I never really met him. I talked to the city’s friendly mayor, Anatoly Sobchak, and his first deputy Alexei Kudrin, but Putin, whose background in the KGB was well known, hid on the sidelines and did not really talk to anybody. He was perceived as a secretive nuisance.

Based on this early impression of Putin, I have always been surprised by his remarkable rise to the pinnacle of Russian politics. My view is that he was simply lucky and owed his many promotions to a handful of people close to Russia’s first post-Soviet president, Boris Yeltsin. Putin’s main benefactors were Yeltsin’s daughter Tatyana and last two chiefs of staff, Valentin Yumashev and Alexander Voloshin, along with oligarchs Boris Berezovsky and Roman Abramovich, who trusted his loyalty while Yeltsin was too sick to rule in 1998-99.

Putin arrived at a table of increasing abundance laid by Yeltsin and his reformers; he was further helped by an extended period of rising global oil prices. He has had a surprisingly long run, but nobody can expect to be lucky forever. For more than two decades, Putin thrived on personal loyalty and relied on his slow, deliberate approach to decision-making. However, as the invasion of Ukraine continues to unravel, his many flaws and weaknesses are now coming to the fore.

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Despite being in power for more than two decades, Putin has never broadened his expert base. Instead, he has stuck to his former KGB colleagues and old St. Petersburg technocrats along with a small number of economists and lawyers. How can anybody seriously listen to Nikolai Patrushev or Yuri and Mikhail Kovalchuk? They are considered among Putin’s closest advisers but they are full of old-style Soviet conspiracy theories.

Putin himself has consistently refused to rely on any sources of information other than his own intelligence agencies. In his big media events, he has repeatedly shown that he believes in all manner of conspiracy theories. In other words, he has consciously chosen to remain poorly informed.

He has never been a fast decision maker or crisis manager and has always taken his time. For much of his reign this has not been a major issue, but that is no longer true in the current wartime environment. Putin’s obvious lack of skill as a crisis manager is presumably one of the reasons why so many important decisions related to the war in Ukraine are late and inconsistent.

Putin is also a micromanager who is reluctant to delegate and prone to over-centralizing. He has persistently gone far too deep into details. Much of the failure of the war in Ukraine seems to have been caused by Putin insisting on deciding too much himself, just like Hitler during World War II. Military decisions require detailed knowledge which Putin simply does not possess. He is also physically far from the battlefield due to his lack of personal courage.

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Since 2000, Putin has systematically destroyed Russia’s state institutions and imposed extreme repression. One consequence is that his regime has very little capacity to generate, receive, or utilize negative feedback. Everybody around him has learned that he only wants to hear good news. As a result, neither he nor his administration learn much from their mistakes.

Many biographers of Putin have been reluctant to discuss allegations that he has been deeply involved in organized crime and kleptocracy for much of his political career. Nevertheless, awareness of this kleptocracy is vital for anyone seeking to understand today’s Russia. Far-reaching criminal influence has made the Russian state rot from within. It can neither manage processes nor produce things effectively.

A peculiarity of the Putin regime is that the ruler actually offers two-way loyalty, unlike Stalin. Putin recognizes only one crime, disloyalty. If one of his underlings happens to steal a billion or two, it is not typically seen as a problem. Nor does Putin fire anybody because of incompetence. Instead, incompetent senior officials are forgiven for their frequent blunders as long as they remain personally loyal to Putin.

The invasion of Ukraine has exposed widespread corruption and incompetence throughout the Russian military and defense sector, but Putin’s old friends and allies remain in their posts. Rather than dismissing the many incompetent Russian generals, Putin prefers to circulate them. The most outstanding failures, Defense Minister Sergei Shoigu and Chief of the General Staff Valery Gerasimov, have not lost their jobs despite their obvious and costly mistakes.

With the invasion of Ukraine now in its sixteenth month, Putin’s limitations as a leader have left Russia heading for an historic defeat. During the early years of his reign, he benefited from the hard work done before him by 1990s reformers and enjoyed favorable international conditions, but his many sins and shortcomings are now clearly catching up with him.

Anders Åslund is a senior fellow at the Stockholm Free World Forum and author of “Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy.”

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The relaunch of Ukraine’s Supreme Court was one of the initial efforts to reform the country’s widely discredited judiciary in the initial aftermath of the 2014 Revolution of Dignity. However, it did not produce the desired results as a number of factors robbed the court of true independence. Unreformed judicial governance bodies were tasked with hiring Supreme Court judges, with civil society offered a superficial role in the selection process and Ukraine’s international partners largely standing aside. As a result, civil society observers assessed that around a quarter of all selected candidates were questionable.

The creation of the High Anti-Corruption Court in 2017-2019 was a more positive experience, with all candidates scrutinized by an independent panel composed of international experts. This paved the way for the cleansing of two judicial governance bodies, the High Council of Justice and the High Qualification Commission of Judges, with foreign experts once more playing a crucial role.

In January 2023, Ukraine appointed eight new members to the country’s key judicial governance body, the High Council of Justice (HCJ), thereby enabling it to resume its work. On June 1, the HCJ appointed new members to the High Qualification Commission of Judges (HQCJ), which is another significant step forward. However, it is important to highlight that no agents of change from civil society were appointed, while two of the new members have questionable reputations. The next challenge is for the HQCJ to finish qualification assessments and hire judges to fill more than 2,500 vacancies. In addition, further measures are also expected in order to restore public trust in the Supreme Court.

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The next big issue on the path toward rule of law and EU accession is the selection procedure of Constitutional Court judges. EU candidate country status has opened up an historic opportunity to repair the Constitutional Court, which has long wielded effective veto power over any reform efforts in Ukraine. Reforming the Constitutional Court is widely seen as the most politically challenging element of judicial reform for the Ukrainian government to implement.

Additionally, some anti-corruption initiatives that were justifiably put on hold following the start of Russia’s full-scale invasion must now be revived. This includes asset declarations for all state officials. The recent bribery charges brought against the head of the Supreme Court underline the urgency of a return to the asset declaration submission and verification process. Concerns regarding this issue have recently been voiced by the International Monetary Fund and EU Ambassador to Ukraine Matti Maasikas.

An independent judiciary and the rule of law have long been recognized as vital pillars for Ukraine’s future success. As the country looks toward the post-war recovery period, these factors are now more important than ever. During the rebuilding process, Ukraine’s partners will demand transparency and security for all state and private sector investments. Additionally, judicial reform has a central role to play in Ukraine’s further EU integration. Crucially, creating a fair legal environment free from corruption is also a key demand of Ukrainian society, including the hundreds of thousands currently defending the country against Russian invasion.

Olena Halushka is a board member at AntAC and co-founder of the International Center for Ukrainian Victory.

Today, the Diia ecosystem offers the world’s first digital passport and access to 14 other digital documents along with 25 public services. It is used by more than half the Ukrainian adult population. In addition to consumer-oriented functions, the system collects information for the national statistical office and serves as a digital platform for officials. Diia is widely seen as the world’s first next-generation e-government platform, and is credited with implementing what many see as a more human-centric government service model.

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In today’s increasingly digital environment, governments may find that they have a lot of siloed systems in place, with each system based on its own separate data, infrastructure, and even principles. As a result, people typically suffer from additional bureaucracy and need to deal repeatedly with different official organizations. Most e-government initiatives are characterized by the same problems worldwide, such as technical disparity of state systems, inappropriate data security and data protection systems, absence of unified interoperability, and inefficient interaction between different elements. Ukraine is pioneering efforts to identify more human-centric solutions to these common problems.

One of the main challenges on the path to building sustainable e-government is to combine user friendliness with a high level of cyber security. If we look at the corresponding indices such as the Online Services Index and Baseline Cyber Security Index, we see that only a handful of European countries have so far managed to achieve the right balance: Estonia, Denmark, France, Spain, and Lithuania. Beyond Europe, only Singapore and Malaysia currently meet the necessary standards.

Ukraine has a strong record in terms of security. Since the onset of the Russian invasion, the Diia system has repeatedly been attacked by Russian cyber forces and has been able to successfully resist these attacks. This is an indication that the Ukrainian platform has the necessary reserve of cyber security along with a robust and secure digital public infrastructure.

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The success of the IT industry in Ukraine over the past decade has already changed international perceptions of the country. Instead of being primarily seen as an exporter of metals and agricultural products, Ukraine is now increasingly viewed as a trusted provider of tech solutions. The Ministry of Digital Transformation is now working to make Diia the global role model for human-centric GovTech. According to Samantha Power, the Ukrainian authorities are interested in sharing their experience with the international community so that others can build digital infrastructure for their citizens based on the same human-centric principles.

USAID has announced a special program to support countries that, inspired by Diia, will develop their own e-government systems on its basis. This initiative will be launched initially in Colombia, Kosovo, and Zambia. Ukraine’s Diia system could soon be serving as a model throughout the transitional world.

As they develop their own e-government systems based on Ukraine’s experience and innovations, participating governments should be able to significantly reduce corruption tied to bureaucratic obstacles. By deploying local versions of Diia, transitional countries will also develop a large number of their own high-level IT specialists with expertise in e-government. This is an important initiative that other global development agencies may also see value in supporting.

Anatoly Motkin is president of the StrategEast Center for a New Economy, a non-profit organization with offices in the United States, Ukraine, Georgia, Kazakhstan, and Kyrgyzstan.

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To attract the huge volumes of investment, especially private capital, needed to kick start reconstruction and get the economy back on its feet, Ukraine will need to pivot away from war economy measures toward a strategy of private sector growth. The numerous emergency nationalizations that took place last year were understandable at a time when arms production and energy supply were the most urgent priorities. But in the battles that lie ahead, Ukraine’s survival will be determined as much by its economic strength as by its military prowess.

The role of the state was already outsized before Russia’s invasion, with more than 3,500 state-owned enterprises accounting for one-tenth of Ukraine’s output and about 18% of employment. The demands of war mobilization have created a public sector that is now far larger than in any existing EU member state. In the banking sector alone, the state’s share has reached nearly 60%, stifling competition to the point where the Ministry of Finance has been forced to acknowledge that there is currently no functioning financial services market.

Although the prewar target of reducing the state’s share to less than a quarter remains, the Ukrainian parliament is now debating a draft law intended to permit the nationalization of even more banks. The law is designed to deal with a single case, the proposed nationalization of the Sens Bank. However, it is drawn so broadly that critics fear it will give the state discretionary powers to take over almost any bank it wishes. This includes not only those banks that have been targeted with official state sanctions, but also those included on the “shame list” of businesses that continue to trade with Russia.

While it is perfectly understandable that Ukraine should wish to penalize businesses that have failed to cut their ties to Russia, the satisfaction of seizing their assets may come at a high cost if market confidence is undermined by the weakening of property rights. Some legal experts have also questioned whether these widely drawn powers are in line with the Ukrainian Constitution, and have argued that only the National Bank of Ukraine is empowered to approve the nationalization of a bank in cases of insolvency. Nationalizations pushed through by the government for political reasons are likely to be challenged successfully in the courts, according to legal observers.

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An additional consideration is that any increase in the state’s control of the economy is likely to fuel concern about corruption, which remains one of the main obstacles on the path to EU accession. The boundaries between political and economic power, which too often remain blurred in the characteristically post-Soviet style, need to be much more sharply delineated. As numerous scandals have shown, state-controlled banks and enterprises create huge opportunities for self-enrichment and abuses of power by those who control them ostensibly on the nation’s behalf, including kickbacks, nepotism, excessive salaries, and favoritism in the awarding of public contracts.

Instead of considering new measures to extend the state’s reach into the economy, the Ukrainian government should be thinking about how the state can divest itself of assets it has already acquired in a way that is fair, transparent, and most likely to foster the economic growth Ukraine badly needs.

If one of the few beneficial effects of the war has been to accelerate Ukraine’s deoligarchization, one of the emerging risks in its aftermath will be the danger of reoligarchization via privatizations that are opaque and marred by favoritism. Ukrainian President Volodymyr Zelenskyy must resist the temptation to use patronage to create a business class loyal to him. That would leave Ukraine looking less like an EU member-in-waiting and more like a miniature version of Putin’s crony capitalism. There would be no victory in such an outcome.

David Clark was Special Adviser on Europe at the UK Foreign Office 1997-2001 and now works as an independent analyst specializing in foreign policy and European affairs.

Universal jurisdiction trials

One of the few accountability tools currently employed for Syria is the framework of universal jurisdiction, which enables domestic courts to try atrocity crimes committed outside of their borders based on the premise that the crime is so grave that it threatens the international community as a whole. Many countries only allow cases to proceed if a suspect is present within their borders, and thus there have been a limited number of cases on Syria. Many of these cases have focused on terrorism charges and only a few have been against Assad regime–linked perpetrators.

With normalization, Assad and his regime’s senior leadership may increasingly travel outside of Syria and the region. Any country wanting to support Syrians’ demands for accountability should ensure they have the laws and resources available to arrest, investigate, and prosecute any suspected war criminal who ends up on their soil.

Most perpetrators will likely avoid traveling to countries in Western Europe that oppose normalization and are known for bringing universal jurisdiction cases, such as Germany and France. However, universal jurisdiction laws extend outside of Western Europe, to Eastern Europe, Asia, South America, Africa, and even some countries in the Middle East. While most of these countries have rarely or even never used their universal jurisdiction laws, concerted advocacy by civil society in Syria and the relevant country, combined with support or resources from countries with more practice on universal jurisdiction cases, could help change the tide.

Where perpetrators are found in countries that fail to try them under universal jurisdiction frameworks, countries could also follow the example set by Belgium in seeking to prosecute former Chadian dictator Hissène Habré for war crimes, crimes against humanity, and torture. This could include issuing arrest warrants under their universal jurisdiction laws, following up with extradition requests wherever perpetrators are found, and bringing cases at the International Court of Justice or other international tribunals to ultimately ensure trials.

Trials of senior leadership in national courts

While universal jurisdiction trials typically require the presence of a perpetrator, some civil law countries allow for certain trials to proceed in absentia, provided there are sufficient safeguards to protect a defendant’s fair trial rights. For example, France can hold in absentia trials when the victim is a national of that country. French authorities are using these laws to try three architects of the Assad regime’s detention and torture apparatus—Ali Mamlouk, Jamil Hassan, and Abdel Salam Mahmoud—for their alleged role in arbitrarily detaining, torturing, and killing a father and son who were French-Syrian dual nationals. This trial will not result in the imprisonment of the accused if they are found guilty, at least for now. It will, however, serve as a powerful moment for Syrian victims and lawyers to present evidence against those responsible for designing and ordering atrocity crimes in Syria.

To help close the justice gap for Syria, countries with authority to hold in absentia trials should explore opportunities that may be available and fill strategic gaps in the Syria accountability space. For example, this might include cases against high-level perpetrators who may be less likely to travel to countries with universal jurisdiction trials but whose cases may have significant symbolic importance for victims.

While universal jurisdiction trials are proceeding slowly for Syria, many countries have been eager to bring universal jurisdiction cases related to Ukraine. In the past year, Germany, Canada, and other countries have opened structural investigations to begin building universal jurisdiction cases against Russian perpetrators. These countries should proactively investigate links between the conflicts in Ukraine and Syria to ensure that any future trials related to Ukraine also incorporate relevant links to Syria. For example, a Russian commander responsible for atrocity crimes in Ukraine may have committed those same crimes in Syria. Officials liable for the use of Iranian drones to facilitate atrocity crimes in Ukraine may have done the same in Syria. Or Syrian soldiers reportedly recruited to Ukraine may have committed atrocity crimes in Syria.

Whenever an apprehended perpetrator is suspected of committing crimes in both Ukraine and Syria, both sets of crimes should feature in a universal jurisdiction trial.

Ensuring reparations for Syrian victims

One element of justice, in addition to trials determining legal responsibility for crimes, is reparations for victims to help them recover and rebuild their lives. Since Russia’s full-scale invasion of Ukraine last year, countries have eagerly explored legal avenues to seize Russian assets and use the proceeds to ensure reparations and reconstruction in Ukraine. As recently as May 17, the Council of Europe established a register of damages for Ukraine as a first step toward ensuring compensation for Ukrainian victims. Lest countries want to support selective justice, they should explore the application of these legal tools to ensure that Syrian victims also receive reparations for the harm they have suffered.

Normalization will ensure that individuals connected to the Assad regime have increasing access to global financial markets. These perpetrators could attempt to purchase properties overseas or place their money in foreign banks. This, in turn, would increase legal pathways to seize assets and repurpose them as reparations for Syrian victims.

Countries could also fund reparations for Syrian victims using existing pools of funding obtained as a result of violations in Syria—for example, the $778 million judgment against the French industrial company Lafarge for violations in Syria, or proceeds from sanctions violations, or the assets of Bashar al-Assad’s uncle Rifaat al-Assad, which France seized after finding him guilty of corruption.

Cases at the International Criminal Court

The International Criminal Court (ICC) is not investigating crimes committed in Syria because Syria is not a member state of the ICC and because Russia and China vetoed a United Nations Security Council referral to the ICC. However, Syria does not fall entirely outside of the ICC’s jurisdiction. Using the precedent established for Myanmar in 2019, ICC Prosecutor Karim Khan could open an investigation into crimes committed in Syria that resulted in forced deportation to Jordan, an ICC member state.

The ICC is a particularly important accountability avenue to activate for Syria. An ICC investigation would, for example, make available additional resources to investigate and build cases. It would also send a message to Assad because the ICC can issue arrest warrants for and try sitting heads of state. National courts do not have this authority under international law. Thus, while Assad is still in power, the ICC is virtually the only avenue to secure his arrest and subsequent trial. And the modern era of accountability has seen relatively high success for ensuring that heads of state or major military forces who are subject to arrest warrants or indictments face accountability.

Khan has received multiple requests to open an investigation into Syria but has thus far failed to do so. A referral of Syria by an ICC member state would significantly increase the likelihood of an investigation. Dozens of countries were motivated last year to refer Ukraine to the ICC and should consider doing the same for Syria.

Cases at the International Court of Justice

The International Court of Justice (ICJ) also can ensure accountability for Syria by hearing a case against the state (in contrast, the ICC tries cases against individual perpetrators). The Netherlands and Canada are preparing to bring the first ICJ case against Syria for violations of the Convention Against Torture.

Countries could bring other cases against Syria at the ICJ, for example, for violations of the Chemical Weapons Convention. Since Syria acceded to the convention in September 2013—a month after carrying out a sarin gas attack near Damascus that reportedly killed 1,300 people—the Assad regime has been accused of hundreds of chemical weapons attacks. Any member state of the Chemical Weapons Convention that wishes to support accountability could bring a case against Syria at the ICJ.

The trend towards normalizing relations with Assad was not inevitable. Normalization is happening now because states have failed to use existing accountability tools to bring Assad and his regime to justice. But the tools are still available, and some opportunities to use them may be increasing. Justice for the horrors experienced by millions of Syrians is long overdue, and more concerted efforts by countries to pursue justice may help counter the trend in normalization.

Elise Baker is a staff lawyer with the Atlantic Council’s Strategic Litigation Project. Previously, she worked at the United Nations International, Impartial and Independent Mechanism on Syria and led Physicians for Human Rights’ Syria Mapping Project, which documented attacks on Syria’s health care system.

The post How to hold the Assad regime accountable, even as countries normalize relations with Syria appeared first on Atlantic Council.

In Pakistan, populist Imran Khan faces the biggest challenge of his political career

Roohan Ahmed — Mon, 22 May 2023 14:08:58 +0000

Imran Khan, Pakistan’s populist former prime minister, is facing the biggest test of his political career as he challenges the very same security establishment that accelerated his journey to power in the 2018 elections.

Earlier this month, Khan was arrested by Pakistan’s paramilitary Rangers during a hearing for a corruption case at the Islamabad High Court. This came after the country’s anti-corruption watchdog issued warrants for his arrest related to the case. Moments later, Khan’s supporters took to the streets in protest, setting ablaze public and private property. Amidst their anger, the violent protesters did something that no political party has done in decades: they set ablaze the official residence of a three-star general in the eastern city of Lahore, with some going so far as to enter military headquarters in Rawalpindi to vent their frustration.

Imran Khan and his political party (the Pakistan Tehreek-i-Insaf, or PTI) have denied that their supporters were behind the violent protests, instead alleging that it was a conspiracy to squash the party and its followers. The former prime minister—now out on bail by the country’s Supreme Court—claims that General Asim Munir, Pakistan’s army chief, is leading a crackdown against Khan and his party.

However, the attacks on military installations brought a perhaps unintended but serious consequence—they gave Khan’s opponents a golden opportunity to dismantle the PTI. The military suggested that those who staged violent protests be tried under the Pakistan Army Act and the Official Secrets Act, a suggestion that has been approved by current Prime Minister Shehbaz Sharif’s civilian government.

Thousands of Khan’s party workers have been arrested across Pakistan and over a dozen leaders and former lawmakers have left the party. Those who still remain loyal to the former prime minister are either in jail or on the run. The political turmoil that Pakistan has been going through since last year could further dent the country’s turbulent democracy, and Khan’s opponents are not the only ones behind it.

Imran Khan, unlike other politicians, does not believe in talks with his rivals to settle political disputes. Instead, he stages rallies and calls opponents “thieves” and “looters” in front of thousands of supporters. His arrogance and refusal to engage in political dialogue with rivals has brought Pakistan’s political scene to a point of no return.

As a result, the situation is unlikely to improve anytime soon.

Khan’s main rivals—the parties of former Prime Minister Nawaz Sharif and former President Asif Ali Zardari—have been long active in the country’s politics. They, too, have experienced the wrath of the military establishment currently faced by the Pakistan Tehreek-i-Insaf. Their governments were either thrown out of power or weakened because of the establishment’s meddling. In the end, though, their parties still exist and remain key civilian players in Pakistan’s politics. Likewise, attempting to dismantle Khan’s political party will not simply make his support base and influence disappear.

Democracy is about not the politicians, but the voters who send these men and women into the corridors of power. There is no denying that Imran Khan and the PTI have a support base in almost every city of the country. If his party is dismantled, his supporters may lose interest in politics and serve to strengthen undemocratic forces in Pakistan, a trend which has long plagued its political landscape.

Imran Khan, with all his faults, is a popular leader and should face the law as would any other politician. That said, attempts to break his party should not only be opposed by all the political parties, but especially by those who are in the current government. If Khan and his military backers’ undemocratic sidelining of former Prime Minister Nawaz Sharif and former President Shehbaz Sharif’s party before the 2018 elections was indeed wrong, then the same rule must apply to the equally undemocratic crackdown against the PTI.

Democracy remains the only system that can save Pakistan from plunging into darkness. To strengthen it, all political parties need to come together and agree to the earliest date possible to hold countrywide elections in hopes of alleviating the political crisis. This fight is about power. Power comes from the people, and elections remain the only way to have their voice heard in government.

Roohan Ahmed is an independent journalist based in Islamabad covering politics and extremist groups in the region.

The South Asia Center is the hub for the Atlantic Council’s analysis of the political, social, geographical, and cultural diversity of the region. At the intersection of South Asia and its geopolitics, SAC cultivates dialogue to shape policy and forge ties between the region and the global community.

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SouthAsiaSource May 10, 2023

Experts react: Former Prime Minister Imran Khan’s arrest and implications for Pakistan

By South Asia Center and other experts

On March 9, 2023, former Prime Minister of Pakistan Imran Khan was arrested over corruption charges. We asked experts to react to this decision.

Corruption Elections

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SouthAsiaSource May 3, 2023

How Pakistani women use technology solutions to overcome barriers to entrepreneurship

By Fatimata Ndiaye, Ishani Srivastava, Estelle Thomas, and Yiran Zha

A field study of women entrepreneurs in urban Pakistan, commissioned by the South Asia Center in conjunction with Johns Hopkins University and the American Pakistan Foundation, revealed how technology solutions can support women to jumpstart their entrepreneurial ventures.

Entrepreneurship Pakistan

In Pakistan, populist Imran Khan faces the biggest challenge of his political career” class=”gta-horizontal-featured–img” />

SouthAsiaSource May 3, 2023

A conversation with Fawad Chaudhry, senior member of Pakistan Tehreek-i-Insaf

By Fawad Chaudhry and Wajahat Khan

South Asia Center non-resident senior fellow Wajahat Khan interviewed Pakistan’s former Federal Information Minister for Broadcasting and senior member of Pakistan Tehreek-i-Insaf Fawad Chaudhry.

Crisis Management Economy & Business

Quirk in Just Security on adapting the US strategy towards hybrid regimes

sodal — Fri, 19 May 2023 14:06:14 +0000

Nonresident Senior Fellow

On May 17, Scowcroft Strategy Initiative Nonresident Senior Fellow Patrick Quirk co-authored a piece for Just Security on the importance of developing a US strategy towards hybrid regimes that promotes US interests whilst remaining steadfast in the US’ commitments to democratic values.

The authors go on to posit that prolonged engagements with hybrid regimes, in the long term, risks impeding upon the US’ global interests, as non-democratic regimes are less likely to uphold the US’ interests on the global stage, and may prove detrimental to the US’ posture in its strategic competition with China.

Failing to address the democratic deficiencies of hybrid regimes sets up the United States for long-term strategic failure and hinders American economic prosperity. To avoid these outcomes, the United States must carve out a new path forward that preserves near-term US interests while also pressing these States to make democratic progress.

Patrick Quirk

Fellow

Patrick Quirk

Freedom and Prosperity Center GeoStrategy Initiative

Civil Society Conflict

The post Quirk in Just Security on adapting the US strategy towards hybrid regimes appeared first on Atlantic Council.

Experts react: Former Prime Minister Imran Khan’s arrest and implications for Pakistan

South Asia Center and other experts — Wed, 10 May 2023 22:14:33 +0000

On May 9, 2023, former Pakistani Prime Minister Imran Khan was arrested over corruption charges during his court visit in Islamabad. This sparked nationwide protests, leading to internet blockages across the country. The arrest follows longstanding tensions with and attempts to apprehend Khan, adding to Pakistan’s already escalating political and economic crises.

To offer insights about the implications of Khan’s arrest for Pakistan, the Atlantic Council’s Pakistan Initiative asked experts to react to recent developments below.

Shuja Nawaz: Pakistan’s self-created vortex

Kalsoom Lakhani: Pakistan has already been impacted by increasing political and economic instability, which will continue to exacerbate the funding challenges for startups

Ali Hasanain: Pakistan needs to finalize an IMF deal and sort out external financing if the country is to avoid default beyond June

Amber Rahim Shamsi: A Pakistani journalist’s guide to survival

To learn more about the arrest, tune in below with Pakistan Initiative Director Uzair Younus.

Pakistan’s self-created vortex

Just when one imagined Pakistan could not sink further into an economic and political morass, its leaders, civil and military, appear to have come up with yet another unnecessary crisis. The use of the military to arrest former Prime Minister Imran Khan in the sacrosanct confines of the Islamabad High Court reflects the inability of Pakistani political leaders to provide a coherent strategy to fight its economic and political woes. It also represents the inability of its military leaders to resist political engineering.

If the ultimate aim is to rid Pakistani politics of Imran Khan, then the storm that appears to have been unleashed may produce unintended and unmanageable consequences. The military’s calculations appear to hinge on expectations of a declining trend of Khan’s popularity and an inflated view of its own ability to ride out street unrest. What it may not have calculated is the cumulative effect of unrest on the national economy, currently gasping for air and heading toward hyperinflation and default, as well on its own rank and file. Will schisms emerge within the military? Or, will the unrest and mayhem serve as an excuse to postpone, perhaps indefinitely, the provincial and national elections ordained by the Constitution? Pakistan can ill afford a coup on the Egyptian model. If that were to occur, the country would struggle to survive an extended period of chaos as an economic and political pariah.

A fascinating picture of absences from Pakistan emerged this week. The prime minister had repaired to London for a coronation and extended his stay while Pakistan was burning. He returned to Pakistan and addressed the nation on May 10, 2023. The army chief was in the Gulf, if one could believe the information on FlightAware for his personal aircraft. The caretaker chief minister of the powerful Punjab province was also abroad when the drama unfolded.

Who was in charge? Who took the decision to allow a relatively small rampaging mob to break into and torch the Corps Commander House and the Governor’s House in Lahore? Where did their guards go? And where were the military guards that abandoned the gate leading to the army headquarters in Rawalpindi to the mob? Who allowed the mob to “liberate” the headquarters of the Frontier Corps at the Bala Hissar fort in Peshawar? Some pundits opined that this was a master plan of subterfuge that has yet to unfold. Social media had a field day adding to the confusion with colorful conspiracy theories till the pulling of the plug on the internet slowed their dissemination. But the images shared by hundreds of participants in the rioting created the impression that the military was being challenged with impunity by mobs of youth and angry women. Abandoned military check posts in some military cantonment areas remained a puzzle. Only a day later did the provincial authorities in Punjab and Khyber Pakhtunkhwa seek military assistance in aid of civil power.

In one fell swoop, Pakistan has managed to hurt its stability more than any enemy action could have achieved. Will its leaders speak out now and take responsibility for the shambolic mess that unfolded on May 9, 2023? The silent majority of Pakistan that is suffering the effects of poor governance and secretive decision making deserves some quick and clear answers. So do Pakistan’s friends abroad, who want it to return to a path of stability and development.

Shuja Nawaz is a distinguished fellow and the founding director of the South Asia Center of the Atlantic Council, Washington DC. His latest book is The Battle for Pakistan: The Bitter US Friendship and a Tough Neighbourhood. Website: www.shujanawaz.com. On Twitter: @ShujaNawaz.

Pakistan has already been impacted by increasing political and economic instability, which will continue to exacerbate the funding challenges for startups

In the wake of the recent developments in Pakistan, the suspension of mobile broadband usage “indefinitely” by the Pakistan Telecommunications Authority as well as the restriction and blocking of social media platforms like Twitter, Facebook, and YouTube has an immediate and adverse effect on the country’s technology sector and startup ecosystem. Not only are Pakistani startups reliant on these platforms for new user acquisition and growth of their companies, but many Pakistanis are mobile first in how they engage with the digital economy, meaning their ability to leverage technology to access startups solutions for financial services, mobility, food, commerce, and other areas has been hindered and halted. Moreover, given that international perceptions of Pakistan have already been impacted by the country’s increasing political and economic instability, this will continue to drive a negative narrative of the country in the minds of investors globally, which will only exacerbate funding challenges for startups in Pakistan.

Kalsoom Lakhani is a non-resident senior fellow at the South Asia Center and co-founder and general partner of i2i Ventures. On Twitter: @kalsoom82.

Pakistan needs to finalize an IMF deal and sort out external financing if the country is to avoid default beyond June

Over the past eighteen months, every major power player in Pakistan has demonstrated a willingness to disregard the rule of law and national interest to strengthen its claim to power. This ugly fight has looked uglier as it has played out in lockstep with an economic meltdown that has led to 40 percent inflation this year. The country is seeing an endemic of personal tragedies played out over and over, triggered by normal citizens descending rapidly and seemingly hopelessly into poverty—from fathers killing children they cannot feed before taking their own lives, to stampedes in food lines.

Pakistan needs to finalize an International Monetary Fund (IMF) deal and sort out external financing if the country is to avoid default beyond June. For months, it has suffered not only from gross internal mismanagement, but a lack of coordination between its most important creditors—the IMF, the Chinese government, and its allies in the Middle East.

On May 6, 2023, Chinese Foreign Minister Qin Gang put it bluntly while he was in Islamabad: “We sincerely hope the political forces in Pakistan will build consensus, uphold stability, and more effectively address domestic and external challenges so it can focus on growing the economy.”

Two days later, the wildly popular former Prime Minister Imran Khan has been jailed, bringing his followers into direct and physical conflict with Pakistan’s powerful military, which is seen as being behind Khan’s fall from office.

One can only wonder what Pakistan’s creditors in Beijing, Washington, Riyadh, and elsewhere must be thinking about this latest chapter in a sordid tale of economic mismanagement and intemperance in managing the country’s affairs.

Put bluntly, default appears near certain unless unprecedented corrections are embarked on over the next few days.

Ali Hasanain is an Associate Professor of Economics at the Lahore University of Management Sciences (LUMS) and a non-resident senior fellow at the Atlantic Council’s South Asia Center. On Twitter: @AliHasanain

A Pakistani journalist’s guide to survival

Spare a thought for the journalist. Not the Whatsapp-as-a-source, vlog-from-the-basement kind of journalist, but the reporters, camerapersons, producers assignment editors, and desk editors who just want a normal country. It’s been a year since politics in Pakistan have been high on amphetamines with a generous sprinkling of LSD. They are exhausted, they are underpaid, and their stories are shaped by everything other than news value.

Just last Sunday, Sindh-based reporters were deployed to cover the local bodies elections. The stakes are high, particularly since these could offer control over Pakistan’s largest and richest city—Karachi—and as a bellwether for general elections. The local body polls have already been subject to intense legal contestation for several months. One reporter told me how his story on irregularities during polling in one station was dropped by his channel because it did not suit that channel’s agenda. Sometimes, reporters are asked to find evidence to fit a pre-determined verdict.

But what is a journalist to do when the biggest story after Khan’s arrest isn’t his first photograph in detention (yes, that’s a scoop, but a transient one), but the protests and riots that have erupted across Pakistan targeting military-owned property? I keep hearing the word “unprecedented” on international channels and social media, but only condemnation rather than nuanced context on local media. More glaringly, the visuals of protestors breaking into General Headquarters or marauding the guest house of the Lahore corps commander (that came to symbolize the post-Khan arrest reaction from his supporters) cannot be broadcasted.

I met a media manager the day after, his phone buzzing with calls from one of his bureau chiefs. “I asked him to divert the calls pressuring him to stop coverage to me,” he said, without naming who, although we both knew who he was referring to. It’s a code that doesn’t need deciphering any more. “We find ways to slip coverage into a show or a bulletin, and then run with it.”

Journalists have gotten really good at finding ways to cover the unnamed and unnameable in the last five years. For example, when one anchor couldn’t play clips of former Prime Minister Nawaz Sharif accusing the former army and intelligence chiefs of political manipulation, he read a carefully curated transcript on his show. Others have found solace, and subsequently legal and physical threats, through social media.

But the pockets of resistance are still small, given that political allegiance is safer and more lucrative than independent reporting. By and large, mainstream television—and to a lesser extent newspapers—have learned their lessons the hard way. On the day the press wing of the armed forces released a statement condemning Imran Khan’s accusation against a serving military officer, I was on a television show with other analysts. Two of the analysts knew their over-the-top sparring in favor of their preferred political parties would be great for ratings, so they kept at it for the bulk of the show. As soon as they were asked to comment on the military’s press statement, there was a pause, and suddenly it was hard to tell the two apart.

Amber Rahim Shamsi is the director of the Centre for Excellence in Journalism at IBA Karachi. On Twitter: @AmberRShamsi

Nonresident Senior Fellow

SouthAsiaSource May 3, 2023

A conversation with Fawad Chaudhry, senior member of Pakistan Tehreek-i-Insaf

By Fawad Chaudhry and Wajahat Khan

South Asia Center non-resident senior fellow Wajahat Khan interviewed Pakistan’s former Federal Information Minister for Broadcasting and senior member of Pakistan Tehreek-i-Insaf Fawad Chaudhry.

Crisis Management Economy & Business

SouthAsiaSource Mar 22, 2023

Experts react: Elections postponed in Pakistan’s Punjab province

By South Asia Center and other experts

On March 22, 2023, the Election Commission of Pakistan announced a decision to delay elections in Punjab, the country’s most populous province. We asked experts to react to this decision.

Elections Pakistan

SouthAsiaSource Mar 6, 2023

Amid Pakistan’s political and economic turmoil, risks to curbs on digital freedoms grow

By Uzair Younus

Growing polarization and instability in Pakistan have increased the likelihood that as elections draw near, curbs on speech, largely limited thus far to television channels, may extend to internet platforms like YouTube, Facebook, and Twitter.

Civil Society Elections

Roberts on CNBC

everges — Fri, 14 Apr 2023 15:07:42 +0000

ORIGINAL SOURCE

On April 13, IPSI Nonresident Senior Fellow Dexter Tiff Roberts spoke on a CNBC special report on “Why China’s Billionaires Keep Disappearing.” For the full episode, watch here.

Fellow

Dexter Tiff Roberts

Global China Hub Indo-Pacific Security Initiative

China Chinese

The post Roberts on CNBC appeared first on Atlantic Council.

Nawaz in Dawn: For Pakistan to prosper, it must invest in its children

Atlantic Council — Thu, 13 Apr 2023 20:40:00 +0000

The post Nawaz in Dawn: For Pakistan to prosper, it must invest in its children appeared first on Atlantic Council.

How to keep Western tech out of Russian weapons

Aleksander Cwalina — Tue, 04 Apr 2023 18:13:20 +0000

One prong of the Western response to Russia’s full-scale invasion of Ukraine has been the designation of strong sanctions and export controls to punish Russian aggression and limit the Kremlin’s ability to effectively wage war. However, numerous recent reports have revealed that some Russian weapons continue to utilize components ostensibly coming from Western countries including the United States, the United Kingdom, and the European Union.

A joint March 2023 International Partnership for Human Rights and Independent Anti-Corruption Commission (NAKO) report found Western components critical in the construction and maintenance of drones, missiles, and communications complexes in weapons used by Russia in Ukraine. Also in March, the Atlantic Council’s Eurasia Center convened a panel of experts for a virtual event to discuss how to stem the flow of dual-use technology to Russia. Moderated by Ambassador John Herbst, panelists described how sanctioned Western tech gets to Russia and offered concrete recommendations to better implement and enforce export bans on Moscow.

Panelists noted that companies and manufacturers could simply be unaware their products are entering the Russian market. Though distributors may believe they are selling dual-use components to non-sanctioned consumer markets, many components are resold through secondary markets such as Hong Kong or Turkey and end up in Russia. Urging more due diligence, Olena Tregub, executive director of NAKO, explained, “if a company has a client from Turkey, for example, it should ask if the product is for Russia. They should study the supply chain.”

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While the West should be lauded for the speed and breadth of sanctions and export controls imposed on Moscow, compliance offices are still catching up. “Western companies and countries still seem to be finding their footing when it comes to compliance, implementation, and maintenance of these restrictions,” said Jack Crawford, research analyst at the Royal United Services Institute (RUSI). According to Crawford, Western governments lack the capacity to effectively monitor and act against Russian sanctions evasion. This results in delays, not only in dealing with sanctions breaches but also in terms of identifying them in the first place.

As for the private sector, Sam Jones, president and co-founder of the Heartland Initiative, noted that investors and companies have increased responsibility when conducting business in respect to conflict-affected areas such as Ukraine. Jones said companies should be more diligent in determining the end use of their products, as outlined in the UN Guiding Principles on Business and Human Rights, and argued that “companies would be well advised to take the findings in these reports seriously and consider the potential material risk in terms of future investments.”

Western companies and investors also do not always appear to recognize dual-use components as belonging to the same category as other heavily restricted military technology, such as cluster munitions and anti-personnel landmines. This puts dual-use components in a sanctions gray area. Jones suggested that future steps could include increased restrictions on dual-use components through conduct-based exclusion, which would target repurposed components in terms of how they are actually used and not through their intended use.

Eurasia Center events

Drones, defense, and diplomacy: Negotiations and the battlefield in Ukraine

Conflict Defense Technologies Europe & Eurasia Politics & Diplomacy

Another key element in efforts to successfully control Russian access to critical Western tech is effective monitoring and enforcement of sanctions. This is an area in which governments can cooperate effectively with civil society, NGOs, and think tanks.

Benjamin Schmitt, senior fellow at the University of Pennsylvania Department of Physics and Astronomy and Kleinman Center for Energy Policy, noted that Western companies and NGOs “have easily available open-source intelligence tools at their fingertips, whether they’re commodity trading platforms or automatic identification system-based vessel tracking websites.” These tools empower watchdog organizations and risk assessment committees in governmental and non-governmental organizations to monitor malign transfers of products and technologies that would undermine sanctions efficacy.

Panelists pointed out that the implementation of sanctions oversight depends in large part on increased interoperability between business, government, and civil society powered by information exchange, open dialogue, and cooperation with emerging intelligence technology and organizations.

Schmitt cautioned that Western hesitancy toward sanctioning Western-based entities could be a real threat to an effective sanctions regime. He pointed out that Nord Stream AG, the company behind the Nord Stream 2 pipeline from Russia to Germany, evaded Western sanctions despite majority ownership by Russian state-owned Gazprom, because the company was based in Switzerland. Considering that Russia’s brutal war against Ukraine aims to fracture Western political and financial stability, it is key that Western countries work in concert and take every step possible to slow the Kremlin’s efforts to control Ukraine and threaten European security.

Tregub put it more bluntly: “War crimes are a Russian strategy. To implement this strategy, Russia needs to build weapons. Without Western components, Russia wouldn’t be able to accomplish its war aims.”

Aleksander Cwalina is a program assistant at the Atlantic Council’s Eurasia Center.

Disclaimer: The purpose of the International Partnership for Human Rights and NAKO report is to explain and illustrate how Western-made components are used by Russia to commit suspected war crimes in Ukraine. To achieve this, the report identifies several companies and governments who are believed to be involved in the manufacturing of components which have been acquired by the Russian military and are used in their military hardware. For the avoidance of doubt, the authors of the report do not allege any legal wrongdoing on the part of the companies who manufacture the components and do not suggest that they have any involvement in any sanctions evasion-related activity. Furthermore, the authors of the report do not impute that the companies which make the components are involved in directly or indirectly supplying the Russian military and/or Russian military customers in breach of any international (or their own domestic) laws or regulations restricting or prohibiting such action. Where a link is drawn between manufacturers and the weapons being used in suspected war crimes, this is done solely to highlight ethical and moral concerns. The existence of counterfeit components is a recognized global problem. The authors of the report recognize the possibility that components featuring the logos and/or branding of named entities may not have indeed been manufactured by said entities. However, given a) leaked Russian “shopping lists” showing the intent to acquire components manufactured by such companies in order to support its military, and b) the history of Soviet and Russian military procurement efforts targeting leading global technology companies, the authors of the report have worked on the assumption that the components they and third parties have identified are genuine.

As this week’s Summit for Democracy—which the United States is co-hosting with Costa Rica, the Netherlands, South Korea, and Zambia— gets underway, these reports highlight in increasingly urgent terms the regression of democratic governance around the world, including in most of Latin America.

For example, Colombia held three broadly free and fair electoral processes last year, and the rule of law is relatively strong. Many in Bogotá and other big cities have access to judicial, health, law-enforcement, and other state institutions. However, elsewhere in the country, the situation is different: Rural municipalities do not have the resources to provide the same level of education or health care as capital cities, and basic infrastructure is lacking. Public safety is even weaker. With its unequal application of democratic norms and protections, Colombia has been labeled a “flawed democracy” by the Economist Intelligence Unit. It’s not alone: Two-thirds of countries in the region (including Brazil and Mexico) qualify as flawed democracies or “hybrid regimes.” Only three are full democracies and the remaining four of the countries scored are fully authoritarian.

Across Latin America, weak institutions perpetuate corruption, inequality, poverty, and insecurity, and they standardize illicit economies. This provides a breeding ground for populist leaders on both the left and right to turn the situation to their advantage by exacerbating political polarization and popular distrust of the government. Weak rule of law is a constant trait of fragile democracies or hybrid regimes. Populist El Salvadoran President Nayib Bukele, for example, suspended civil liberties and arrested thousands of suspected gangsters with no due process. In the presence of weak institutions, criminals and corrupt officials can buy their way out of accountability. Gangs can shake down business owners with impunity. A lack of leadership and inclusion, including political parties’ own undemocratic behavior, is also a constant regionwide.

The factors contributing to the region’s democratic decline are well-known. What is less acknowledged is how these democratic deficits undermine the quality of life for millions of citizens and how they hinder government responses to new challenges and crises. From COVID-19 to Russia’s full-scale invasion of Ukraine, shocks have already tested the region’s governments, and they were found wanting. Three threats in particular have the potential to further destabilize Latin America’s democratic progress:

Climate change and natural disasters have already started to upend economic and social conditions. Much of southern South America has suffered from record heat waves this year, fueling record forest fires in parts of Chile. A heavy rainy season has exacerbated a major Dengue fever outbreak in eastern Bolivia and caused devastating floods in Brazil. Meanwhile, the Paraná River—a major transportation artery and irrigation source—has fallen to such a low level that shipping has struggled; and Uruguay declared a national emergency in October last year due to crop failures caused by drought. Poor environmental governance both contributes to these phenomena and hinders mitigation and adaptation efforts. Governments’ inabilities to respond effectively contribute to poverty, dislocation, and migration across the region. To strengthen their democracies, governments must be able to channel citizen demands more nimbly and mobilize resources to mitigate these environmental or climate shocks .
Latin America and the Caribbean struggle with food insecurity and price shocks. Energy prices and inflation add to severe cost-of-living pressures for many across the region. A new report from the Pan American Health Organization shows that over 22 percent of the Latin American and Caribbean population cannot afford a healthy diet, with rates reaching over 50 percent in the Caribbean. Many governments provide subsidies for certain foodstuffs, fuel, and other critical imports, but high inflation and soaring debt payments will challenge governments’ abilities to keep this up. This can rapidly lead to popular unrest: For example, in 2019, a simple public transportation fare hike triggered massive protests in Chile. A similar increase in gas prices in Panama resulted in over a week of protests over fuel, food, and medicine, and Suriname saw protests this month after the government announced it would cut electricity and fuel subsidies.
Most regional governments throughout Latin America and the Caribbean are also under extreme financial stress, which limits their abilities to respond to new crises. The resource boom—fueled by Chinese growth and consumption—that propelled massive social spending and slashed poverty around the region ended years ago. As budgets were tightening, COVID-19 struck the region harder than most others and forced governments to expand deficit spending as economies closed for months at a time. Several states ended the pandemic with bulging debts and lower credit ratings, meaning that they now have less flexibility when it comes to confronting the next shock. And while Latin America’s economy grew nearly 4 percent in 2022, that growth is projected to slow in 2023 as the US Federal Reserve continues to hike interest rates and the value of the dollar continues to rise, with damaging spillover effects for regional economies.

The most effective way to prepare for and mitigate against these external shocks is by strengthening democratic institutions—ensuring greater transparency, democratic participation, and government responsiveness. The United States and other democracies that help the region in dealing with these external shocks have a vital role to play in helping Latin America reverse the trend of democratic decline and prepare for coming challenges that could exacerbate democratic decay. This role extends to the diplomatic, development, and private sectors, which should support partners with best practices and resources that incentivize transparency, civic participation, free trade, and countering the influence of malign foreign actors such as China, Iran, and Russia. As US Agency for International Development Administrator Samantha Power recently wrote, “everywhere they provide assistance, democratic countries must be guided by and seek to promote democratic principles—including human rights, norms that counter corruption, and environmental and social safeguards.”

Voters have delivered major course corrections in Brazil, Colombia, and elsewhere in the past year, with newly installed leaders vowing to tackle inequality. But beyond these democratic processes, there’s more that governments will need to do to fully shore up vulnerable institutions. Investing in initiatives that strengthen civil society, political party systems, and open government will help give citizens a stake in the system, improve the function of institutions, and reduce the space for incursion by would-be autocrats.

Power has rightly called for a development strategy that “addresses the economic grievances that populists have so effectively exploited, that defangs so-called digital authoritarianism, and that reorients traditional democracy assistance to grapple with modern challenges.” As the United States and its partners convene for the Summit for Democracy, creating a vision for strengthening democracy in all US assistance to Latin America should figure among the Biden administration’s highest priorities.

Antonio Garrastazu is the senior director for Latin America and the Caribbean at the International Republican Institute.

Casey Cagley is a resident program director at the International Republican Institute.

The post How can Latin America halt its democratic backsliding? And how can the US help? appeared first on Atlantic Council.

Svetlova in Haaretz: Maidan, Bolotnaya, Tahrir – three things the protest must remember

Atlantic Council — Mon, 27 Mar 2023 17:14:15 +0000