‘Malign Finance’ – the kleptocratic threat to democracy


Prospects for a democratic transition in Venezuela faltered with the failure of “some sort of arrangement where the U.S. would lift sanctions on the country’s kleptocratic government in exchange for unfettered access by American companies to the oil-rich Venezuelan market,” POLITICO reports.

Kleptocrats like Nicolas Maduro blame everyone but themselves for their people’s misery, Michael G. Kozak of the US State Department’s Bureau of Democracy, Human Rights, and Labor, told an OAS hearing on State Corruption and the Humanitarian Crisis in Venezuela.

“Maduro’s theft and mismanagement had produced widespread scarcity and misery long before U.S. sanctions on the individuals responsible for this disaster took effect,” he added.

In the face of an existential battle with illiberal regimes, the West’s democracies “need to marshal all instruments of power — military deterrence, diplomatic and economic pressure, and exposure of their human rights abuses and kleptocracy,” adds Washington Post analyst Jennifer Rubin. Suggestions that U.S. real estate has become a “giant magnet” for Russia’s kleptocratic fortunes add urgency to the task.

Polish-British sociologist Stanislav Andreski’s book The African Predicament identified the sub-continent’s post-independence regimes as kleptocratic, notes analyst Roger Southall. But the experience of one African state demonstrates that it is possible to tackle corruption, curb kleptocracy and strengthen democracy.

From 1996 to 2017, the small and densely populated West African nation of The Gambia suffered under the violent and repressive regime of its president, Yahya Jammeh, says Transparency International:

Systemic corruption and kleptocracy crippled private enterprise and robbed the Gambian people of vast sums, undermining an already fragile and shock-prone economy. In 2017, the year Jammeh finally left office after losing an election which he then declared void, the country scored just 30 out of 100 on the Corruption Perceptions Index, and ranked 130 out of 180 countries.

A year later, The Gambia is inside the top 100 countries for the first time.

A recent forum organized by the Institute for Reporters’ Freedom and Safety – Kleptocracy in the OSCE states, a threat to democracy and human rights (above) – addressed the money laundering schemes which saw important amounts of capital taken out of kleptocratic regimes in the post-Soviet space through western financial institutions. Participants also discussed the persecution of investigative journalists and human rights activists in countries like Azerbaijan, Malta, Slovakia, Russia, Ukraine, Moldova, Kazakhstan and others.

The German Marshall Fund of the United States seeks to appoint a Fellow on Malign Finance for its Alliance for Securing Democracy.

This position serves as ASD’s technical expert on the use of illicit finance, money laundering, and other forms of malign financial influence to undermine democracies.  As such, it will play a central role in ASD’s research and policy development work; engagement with other experts and policy makers from the transatlantic community; and public education on the issue of Russia and other state actors’ use of malign financial influence to undermine democracies.


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