Diplomacy & Crisis News

Pakistan Pakistan, Afghanistan sign accord to share intel The spy agencies of Pakistan and Afghanistan have agreed to carry out “coordinated intelligence operations” against militants operating along the border of the two countries (AP, Reuters). Maj. Gen. Asim Saleem Bajwa announced on Twitter on Monday that Pakistan’s Inter-Services Intelligence and Afghanistan’s National Directorate of Security ...

By Paul McLeary with Ariel Robinson Pleased to meet me. What’s there to do for an 11-term congressman who decides that running yet again just ain’t worth it? Open a consulting firm, of course. Buck McKeon, the longtime Republican representative from California and former chairman of the influential House Armed Services Committee, retired in January ...

The European Union has approved a preliminary plan for a naval mission to stem the influx of migrants trying to reach Europe through human trafficking and smuggling operations in Libya. At least 51,000 migrants have reached Europe this year and more than 1,800 have died trying to transit the Mediterranean. The new EU plan will ...

To date, the Obama administration’s claims of progress in the campaign against the Islamic State (IS) have been accompanied by qualifications and caveats. In January, the Pentagon claimed to have killed 6,000 IS fighters since the September start of “Operation Inherent Resolve,” a statistic that became less impressive when later that month it was reported ...

The State Department on Monday shrugged off a decision by Israeli Prime Minister Benjamin Netanyahu to appoint Silvan Shalom, a politician who has publicly opposed the creation of a Palestinian state, as his chief negotiator for the long-stalled peace talks.

The stories of two Sunni leaders — one a tribal chief, the other a former insurgent — show why locals opposed to the Islamic State and Iraqi officials in Baghdad have so far failed to unite against their common foe.

Chinese military officials say their massive land reclamation in the South China Sea is all about establishing peace and stability. Washington isn’t buying it.

A federal court ruled Google can post a video that caused anti-U.S. riots in 2012. Whether the tech giant does remains to be seen.

Demonstrators march in Sao Paulo against corruption and the government of president Dilma Rousseff. Photograph: Bosco Martin/EPA Brazilian president Dilma Rousseff’s Workers Party is on the defensive as the Petrobras case threatens to expose political corruption. Photograph: Jonathan Ernst/Bloomberg State-controlled oil giant Petrobras has racked up the corporate world’s biggest debt – estimated at around €137 billion by Moody’s. Photograph: Sergio Moraes/Reuters

The concept of the fair market and protection for consumers is based on the idea that inefficient and corrupt practices by large private companies and wayward government officials increases the cost to the consumers and the public. When the construction of a facility meant to benefit the public goes overbudget, the public ends up bearing most of the burden. The companies involved may also lose investment. Competitors, meanwhile, do not to benefit from a market fixed against their products or services, and the company that might have been able to do the job right in the first place may lose business or go bankrupt if unable to compete in a fair market. Consumer protection agencies, government-run officials, and ombudsmen defend the public’s interest, not to mention the interests of the consumer, in challenging corrupt practices in order to balance out the market and actors within it.

The Economist recently published an article on how necessary compliance measures have become such a large industry that the benefit of the enforcement action may cost the affected parties more than the offense itself. The author’s recommendations on how to streamline enforcement is rooted in a sound argument, but the example used, namely the fine given to the German company Siemens  for handing out bribes in emerging markets, should be discussed in further detail.

Often companies investing in foreign countries are not wholly limited their home country’s laws, in this case Germany, as they are subject to the laws of that jurisdiction. In some emerging economies, it is well known by local industry and foreign investors that some investment is limited by corruption. So, in order to do business in many emerging economies, companies like Siemens bribed local officials so as to crack into those growing markets. While entirely illegal in the EU and enforced by German officials, in some countries the lack of enforcement and acknowledgement of consumer protection goals leaves those who wish to play fair on the losing end of their investment.

Brazil is one of the best examples of an emerging market that has been trying to change the way business is conducted. The clearest example of this can be found in the country’s ongoing Petrobras scandal, which may even bring down the government because Brazilians are openly refusing to accept companies, not to mention a government, that wants to keep corrupt practices alive. It involves several high-ranking oil company officials, as well as other large Brazilian companies and the ruling PT party, and it illustrates how corruption and a complete lack of consideration for the public’s interests has driven an entire society into a downward economic spiral. (A detailed account in English can be read here.)

Brazilians were livid when they found out that government officials and kickbacks to Petrobras executives had raised the cost of national projects several times over. Protests broke out when investigators showed that the members of the governing PT party were profiting from the same scheme. The costs of living for the average Brazilian heavily outstripped their real wages and little action and investments were going towards improving this situation. With the revelations of corruption, Brazil’s legal community has gone not only after Petrobras, but also the other companies involved in the scandal, the country’s ruling party, and possibly the president herself.

Brazil’s burgeoning judicial independence will play a huge role in this case as resolving the Petrobas scandal is a matter of overturning a tradition of corruption in the country so that consumer protection and a respect for the public becomes a principle legal standard. Hopefully, once the culture is changed and consumer protection and public trust is achieved, the issues of an overbearing compliance industry can be addressed.

As many as 500 Iraqis have been executed in the latest Islamic State onslaught, as the extremists have overtaken the capital of the nation’s western Anbar region. But “to read too much into this single fight is simply a mistake,” a Pentagon spokesman said Monday. The Islamic State chased Iraqi security forces from the city ...

Ramzan Kadyrov says the U.S. intelligence community needed a fall guy for the bombing and found one in the form of Tamerlan Tsarnaev.

By failing to help South Korea and Japan with small threats, the United States is casting doubts on its biggest commitment in the region.

Kiev claims to have captured two Russian special forces members fighting in eastern Ukraine.

Just as it took a deadly shipwreck to finally put the spotlight on the dire migrant crisis in the Mediterranean, it’s taken the stranding of some 6,000 migrants — and perhaps several times that number — at sea in Southeast Asia to raise the alarm about another migrant crisis stemming from what some observers describe ...

It took six years, but President Obama is finally on Twitter.

63 percent of Brazilians favor the impeachment of Brazilian President Dilma Rousseff. (Photo by Eraldo Peres/AP)

The calls for the impeachment of Brazilian President Dilma Rousseff may not be fading away anytime soon, after allegations by a convicted currency dealer recently surfaced as part of a congressional commission. The commission is looking into alleged corruption at Petrobras, Brazil’s state-run oil company, which transpired during the ten-year period Dilma served as chairwoman of the national oil company. Brazilian prosecutors accuse Petrobras executives and two dozen engineering firms of inflating their service contracts as much as 6.2 billion reais ($2.1 billion) so the excess funds could be transferred to personal bank accounts and also to political parties. Thirty-four politicians in office are also being investigated by the Supreme Court in Brasilia on suspicion of receiving bribes.

The currency dealer, Alberto Youssef, alleges Dilma and former President Luiz Inácio Lula da Silva knew about the alleged scheme, “It is my understanding that [they] knew everything.” Last month, Youssef was convicted of money laundering and sentenced to three years in prison — a reduced sentence given his cooperation with investigators. Youssef came under investigation after prosecutors uncovered evidence he had given a luxury automobile to a Petrobras executive. Youssef has also implicated the Brazilian unit of Toshiba, the Japanese conglomerate, of paying bribes to win contracts with Petrobras.

Nestor Cerveró, a former Petrobras director, has also been arrested and charged with money laundering and bribery.  Last week, Cerveró declined to answer prosecutor’s question while denying all charges against him.

Will these latest allegations by a convicted money launderer be enough to topple the President?  The majority of Brazilians are likely to believe the allegations by Youssef, as close to 70 percent hold  President Rousseff responsible for the corruption. Recent polls show 63 percent of respondents favor impeaching the president, and 65 percent rating her government’s performance as negative.  In March, the corruption scandal at Petrobras brought out the largest demonstrations since those which helped topple the military dictatorship in 1985.

Earlier attempts by an opposition party in March to put forward a petition to investigate President Rousseff resulted in being overturned by the Supreme Court due to “technical errors.” The opposition is also looking at allegations Dilma violated a fiscal responsibility law to splurge on her reelection campaign. Many analysts believe the likelihood of Dilma being impeached are low, as Brazilian law states impeachment can only occur if the alleged offense takes place during the current term of presidential office.

As always, many political events are being driven by economic considerations. Brazil’s Finance Minister Joaquim Levy is doing his best to avoid a credit downgrade through austerity programs intended to reduce the government deficit by increasing revenues and cutting spending. Yet Levy is facing growing opposition from a Congress who believe his programs will fail to stem the recession and will only harm the population. Levy’s attempts at trying to rein in one of the world’s most generous pension systems, which spends over 10 percent of GDP on retirees, suffered a major setback last Wednesday, after the lower house of Congress passed an amendment to increase pension outlays by 40 billion reais ($13.34 billion) within ten years. The amendment is yet to clear the Senate and a potential veto by Dilma, who saw lawmakers from allied parties and from her own Workers’ Party vote for the amendment.

Public anger has also been fueled by an outbreak of dengue fever — some 229 have been killed by the mosquito-borne virus so far this year — an increase of 45 percent from this time last year.  Over 750,000 cases of the virus have been reported and are serving to remind Brazilians of the sad state of their health care system, which has been highlighted in recent polls as the country’s biggest problem. Last June, in a nationwide poll by Datafolha, over 87 percent of those polled were unhappy with the health care system.

With many Brazilians still struggling financially because of the economic downturn and angry about the poor state of their health care, the calls for impeachment could grow louder should the new finance minister not be able to quickly turn the economy around. If the direct link of Dilma to the corruption alleged by Youssef is firmly planted in the minds of Brazilians, and former President Lula, himself implicated by Youssef, fails to back Dilma, the opposition and the masses could again turn to the streets in protest, and force Dilma to make a graceful exit.  Yet before taking to the streets with calls for impeachment, Brazilians would do well to ponder the bagunça (mess) this would create afterwards, and carefully consider the alternatives.

To keep up with Democracy Lab in real time, follow us on Twitter and Facebook. Cameron Hudson warns that Burma’s vulnerable Rohingya people may face an existential threat. Josh Machleder argues that only truth — not propaganda — will beat back Russia’s misinformation offensive in Ukraine. Manuel Arriaga proposes revitalizing our democracies not through trendy technology, but by ...