CFR’s Civil Society, Markets, and Democracy (CSMD) Program highlights noteworthy events and articles each Friday in "This Week in Markets and Democracy.”
Africa’s Governance and Economic Struggles
New IMF data and the 2015 Ibrahim Index of African Governance (IIAG), both released this week, show stalling or declining economic growth and governance progress across the continent. Despite better health, education, and human development statistics, IIAG found backsliding in accountability and rights, with thirty-one out of fifty-four countries deteriorating. Africa’s business environment—measured as competitiveness, bureaucracy and red tape, and investment climate—scored the lowest and fell the most of any category since 2011. The IMF echoed these gloomy metrics, projecting sub-Saharan growth to slow to 3.8 percent in 2015, hit by an overreliance on commodities. Both sets of data make clear the interdependence of governance and economic growth. The lowest-scoring countries on IIAG’s business indicators—including Eritrea, Somalia, South Sudan, Sudan, and Equatorial Guinea—also ranked among the worst on rights and participation. And Côte d’Ivoire, ranked as IIAG’s “most improved” based on its aggregate governance score is among the few sub-Saharan countries expected to post high growth through 2017.
Post-Disaster Aid: When it Works, When it Doesn’t
Nearing the six-month anniversary of Nepal’s devastating earthquake that killed more than 8,500 people, comparisons to other natural disaster relief efforts highlight the potential pitfalls of aid delivered in a governance vacuum. Thailand’s post-tsunami recovery fared well relative to others—the country’s centralized (albeit authoritarian-leaning) leadership owned the response, mostly relying on technical rather than financial assistance. In contrast, Haiti remains a cautionary tale—despite some $9 billion in relief aid 150,000 Haitians still live in “temporary” camps and the government remains fragile, as witnessed in the recent chaotic and violent parliamentary contest. Nepal appears to be heading on a similar route with the government yet to draw up a plan for spending $4.1 billion in international donations, even as three million survivors lack shelter, food, and basic medical care in one of the world’s poorest countries. With the new constitution in dispute, a political crisis brewing with India, and a worsening fuel shortage all costing the economy an estimated $1 billion, reconstruction will likely be delayed further.
What We’re Reading on the TPP Agreement…
Kimberly Ann Elliott from the Center for Global Development summarizes the TPP’s impact for developing countries: cutting agricultural subsidies and expanding access to capital controls may help poorer members, but concerns over rules of origin and intellectual property rights linger.
Siddhartha Mahanta finds the changes to the heavily-criticized investor-state dispute settlement process important, saying they may “strike a blow to corporate impunity”—especially cases brought by tobacco companies against smoking bans.
As the TPP deal closed, the World Bank announced that extreme poverty will drop below ten percent globally in 2015. John Cassidy argues that trade helped lift 1.3 billion people out of poverty, even as it increased inequality within countries.