from Development Channel

This Week in Markets and Democracy: U.S. Hunts Stolen Uzbek Assets, Bribery Still Pays, Uganda’s Democracy Backtracks

A man passes by a poster of Uganda's President Yoweri Museveni and a poster of opposition leader Kizza Besigye in town of Kaabong in Karamoja region, Uganda, February 17, 2016 (Reuters/Goran Tomasevic).

June 17, 2016

A man passes by a poster of Uganda's President Yoweri Museveni and a poster of opposition leader Kizza Besigye in town of Kaabong in Karamoja region, Uganda, February 17, 2016 (Reuters/Goran Tomasevic).
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United States Hunts Stolen Uzbek Assets

The U.S. Department of Justice (DOJ) is having a hard time collecting foreign officials’ ill-gotten gains. After finding evidence of bribery, the DOJ still needs to physically seize assets. The latest setback comes in the case against the Uzbek president’s daughter, Gulnara Karimova, for accepting bribes from Russian telecoms company VimpelCom. In the current round the DOJ and Uzbekistan are vying for some $114 million stashed in Karimova’s Irish bank accounts. This is just a small part of the $850 million the DOJ believes Karimova hid in accounts across Belgium, Luxembourg, and Ireland. If they get the money the Uzbek government, led by Karimova’s father, is already demanding its “rightful” return to Uzbekistan, the “victim” of corruption.

OECD Finds Bribery Still Pays

An Organisation for Economic Co-operation and Development (OECD) study shows in many places bribery still pays—the risk remains worth the reward. In part this is because countries don’t enforce their rules. Even if they do, the penalties are small. When maximum fines are $10 million for commercial advantages that could bring in billions, bribes remain good investments. To change these calculations, countries need to up fines and confiscate corruption proceeds—a difficult task where rule of law remains weak.

Uganda’s Democracy Backtracks 

Since his February election to a fifth term, Ugandan President Yoweri Museveni has jailed opposition supporters, shut down social media, and censored journalists. This week he arrested dozens of military officers for ‘coup plotting.’ All have ties to Kizza Besigye, the opposition leader awaiting trial for trumped-up treason charges who faces the death penalty. Unable to stomach the abuses of longtime western ally Museveni, EU and U.S. delegates walked out of his inauguration after he mocked the International Criminal Court, and the United States called Uganda’s post-election environment “unacceptable.” So far neither have stopped the abuses.

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