This Week in Markets and Democracy: Indonesia Pledges to Join the TPP, Corruption in Venezuela

CFR’s Civil Society, Markets, and Democracy (CSMD) Program highlights noteworthy events and articles each Friday in “This Week in Markets and Democracy.” 

Indonesia Pledges to Join the TPP

Just four weeks after the signing of the Trans-Pacific Partnership (TPP) accord in Atlanta, other countries are already asking to join. During his visit to the White House this week, Indonesian President Joko Widodo announced his interest, hoping it will help fulfill his campaign promise to attract foreign direct investment. Others who have shown interest include Colombia, the only large Pacific-facing nation in the Americas not included in the first round, and South Korea, whose interest has grown with time due to concerns that the deal will give Japan an advantage in cars and electronics. They would join the trade deal’s twelve founding members—which together comprise nearly 40 percent of global GDP—in lowering tariffs, establishing labor and environmental standards, and eliminating barriers to trade in services. New entrants will likely have to wait until the deal is ratified. This process looks especially difficult in the United States, due to opposition from members of both political parties and numerous aspiring presidential candidates. Some are already talking about pushing the vote to the “lame-duck” session, meaning November or December of 2016. Indonesia, and the others, will have to wait.

U.S. Investigates Corruption in Venezuela

Last March the Obama administration issued an executive order against seven high-ranking Venezuelan officials for human rights abuses and undemocratic practices, banning them from the United States and freezing U.S.-based property. Now the Treasury Department, through its Financial Crimes Enforcement Network (FinCEN) division, is investigating several government officials for corruption and laundering money through Venezuela’s state-owned energy company, Petróleos de Venezuela (PdVSA). Though no charges have been filed, FinCEN alleges that Venezuelan government officials and PdVSA executives received kickbacks, created fake contracts, used shell companies, laundered drug money, and manipulated the official and black market currency gap for personal gain. These funds were funneled through Banca Privada d’Andorra (BPA), which FinCEN accuses of illegally processing over $4 billion from Venezuela (half of which came from PdVSA). Andorran authorities have since ordered a takeover of the bank. At the center of the scandal is Rafael Ramírez, formerly Venezuela’s minister of energy and foreign affairs as well as president of PdVSA. Ramírez is currently Venezuela’s ambassador to the United Nations, which affords him diplomatic immunity. Massive corruption just adds to Venezuela’s woes, which include deepening recession, triple digit inflation, an ever-growing gap between the official and black market currencies, widespread goods shortages, and escalating crime rates.