from Development Channel

This Week in Markets and Democracy: Duterte Targets Critic, China’s Trade Ambitions, FCPA Uncertainty

A police officer from the SWAT team stands guard during an anti-drugs operation in Mandaluyong, Metro Manila in the Philippines, November 12, 2016 (Reuters/Erik De Castro).

November 18, 2016

A police officer from the SWAT team stands guard during an anti-drugs operation in Mandaluyong, Metro Manila in the Philippines, November 12, 2016 (Reuters/Erik De Castro).
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Philippines’ Duterte Tries to Take Down Critic

Philippine President Rodrigo Duterte brooks no dissent. His latest backlash is against one of his most outspoken critics, Senator Leila de Lima. After she opened an inquiry into Duterte’s role in killings while he was a mayor, and urged the international community to investigate the over 1,500 alleged extrajudicial killings during his first four months in office, the president’s Senate allies ejected her as chair of the Justice Committee. The government is now accusing her of drug trafficking, bribery, and graft. If the case moves forward, De Lima could face up to thirty years in prison—effectively silencing Duterte’s opposition.

Can Mercantilist China Lead on Global Trade?

With the Trans-Pacific Partnership (TPP) dead, the Regional Comprehensive Economic Partnership will lead the agenda at the Asia Pacific Economic Cooperation (APEC) summit in Peru this weekend. The China-led alternative includes ten Southeast Asian countries as well as Japan, India, South Korea, Australia, and New Zealand, roughly 28 percent of world gross domestic product. As trade deals go it is limited—focusing mainly on lowering tariffs. And one of the countries with the highest barriers is China itself, which levies taxes on everything from imported toys to computers, alongside strong “buy-national” policies, and favored financing for its own companies. Those looking for strong leadership against rising protectionism will likely be disappointed.

Future of the FCPA in Question

In 2016 the United States used the Foreign Corrupt Practices Act (FCPA) to bring civil or criminal penalties against a record twenty-three companies, slapping them with fines totaling over $1 billion. The latest came this week as J.P. Morgan Chase agreed to pay U.S. authorities $264 million for a “systematic bribing scheme” involving hiring the children of China’s elite to win business. These ramped-up U.S. anticorruption efforts of the past decade are now in question, and anticorruption scholars differ on the future. Harvard’s Matthew Stephenson expects the end of FCPA and the fledgling Kleptocracy Asset Recovery Initiative as we know them. Others are cautiously optimistic, assuming companies’ self-reported cases, which make up half of FCPA actions, to continue. U.S. multilateral leadership, through the OECD, the United Nations, the G20, and other international anticorruption forums, is also at stake.

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