Corruption

CAPITALISING ON ILLEGALITY: KAZAKHSTAN’S SUPERFICIAL TREATMENT OF THE SHADOW ECONOMY

CAPITALISING ON ILLEGALITY: KAZAKHSTAN’S SUPERFICIAL TREATMENT OF THE SHADOW ECONOMY

Kazakhstan’s new policy for legalising capital from the country’s extensive shadow economy came into effect on 01 September 2014. This will represent the third such campaign within the country since Kazakhstan gained its independence from the Soviet Union in 1991. Based on a decree signed by President Nursultan Nazarbayev in June 2014, the new policy will strive to bring new and much-needed funds into Kazakh banks, thus stimulating the economy, by granting tax amnesty for any capital or property acquired outside of the formal economy that individuals declare between 01 September 2014 and 01 December 2015. The Kazakh Government estimates that as a result of this policy banks could bring in an estimated US$ 10 billion. It is important to note that although it seeks to legalise money technically garnered from illegal monetary transactions, to the extent that the funds are originating in a system outside of the established legal economy within Kazakhstan, the government has emphasised that it will not accept any property or capital stemming from corruption or acquired as a result of crimes committed against individuals or against the state constitution. However, it is not clear how the Kazakh Government plans to make this distinction, particularly considering that all three of the aforementioned sources of money play a prominent role in Kazakhstan’s informal economy. Indeed, although the government’s new policy will almost certainly have the desired effect of bringing new funds into the banking system, it will likely fall far short of curbing the country’s extensive shadow economy. In the worst case, it may even encourage and further perpetuate the informal economic system the president has claimed he wants to combat.

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THAILAND RISK UPDATE – 08 May 2014

THAILAND RISK UPDATE – 08 May 2014

Thailand’s political stalemate continues in the aftermath of the conclusion of two legal cases against former Prime Minister Yingluck Shinawatra. The Inkerman Group outlines the political and security risks for Thailand at 08 May 2014.

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ALGERIAN ELECTIONS: THE UNCERTAINTY OF BOUTEFLIKA’S CERTAIN VICTORY

ALGERIAN ELECTIONS: THE UNCERTAINTY OF BOUTEFLIKA’S CERTAIN VICTORY

It may seem strange to those in countries where election campaigns increasingly look like warped beauty contests in which the person matters more than the policy, that a candidate could stand in a presidential election without once stepping foot onto a podium. Stranger still: that the candidate in question would be all but guaranteed victory in said election. This is precisely the situation, however, in Algeria; with less than a week to go before the election – 17 April 2014 – seventy-seven-year-old incumbent Abdelaziz Bouteflika, silent since the shakily croaked announcement of his candidacy, will almost undoubtedly win a fourth term. However, an increasingly vocal opposition movement has made it clear that it does not intend to allow the elections to pass uncontested; weekly protests have been held to decry political stagnation, raising the much-feared spectre of unrest in Algeria, and making an arguably inevitable result marginally less inevitable.

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CAN AFGHANISTAN HOLD A FREE AND FAIR ELECTION?

CAN AFGHANISTAN HOLD A FREE AND FAIR ELECTION?

On 05 April 2014, Afghanistan will go to the polls, to hold elections for a new president and over 400 provincial councillors. This will be the fifth national election held since the fall of the Taliban regime in 2001, but will be the first to be held on a constitutionally established election schedule, and also the first to be overseen by a permanent and independent entity, the IECC, rather than the controversial temporary bodies set up to monitor previous votes. Without a doubt, this upcoming election is an important moment in Afghanistan’s modern history, particularly in relation to its often problematic, decade-long democratic transition. A successful election that establishes a legitimate government would deal a substantial blow to the aspirations of Afghanistan’s militant groups. However, a failed election, combined with a coordinated push by Taliban forces, could provide an impetus and a rallying cry to these same extremist groups, potentially reinvigorating the insurgency that has caused so much bloodshed over the past decade. Although the elections could be crucial to the future stability of Afghanistan, the process is likely to be far from smooth, as there are a number of important obstacles that could significantly impact the chances of a successful outcome.

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SOMALIA: EDGING AWAY FROM CHAOS?

SOMALIA: EDGING AWAY FROM CHAOS?

As Somalia has attempted to shrug off its long-standing image as a ‘failed state’, a series of successful military operations against Harakat al Shabaab al Mujahideen – more commonly known as Al Shabaab – signify the beginning of a much anticipated full-scale offensive against the Islamist terrorist group. Since its emergence from the now-obsolete Union of Islamic Courts in 2006, Al Shabaab has controlled significant areas of Somalia, in which it imposes its strict interpretation of Sharia law. Despite gaining international notoriety via its merger with Ayman al Zawahiri’s Al Qaeda in 2012, however, Al Shabaab has steadily lost territory since a 2011 African Union (AU) operation forced it out of the capital, Mogadishu, which was closely followed by a subsequent operation which seized back Kismayo, a port city in the Lower Juba province which had previously generated a large portion of Al Shabaab’s income.

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BERNIE ECCLESTONE: DO THE FINDINGS FROM THE DAMAGES CASE IN THE UK REALLY HAVE A BEARING ON THE GERMAN CRIMINAL TRIAL?

BERNIE ECCLESTONE: DO THE FINDINGS FROM THE DAMAGES CASE IN THE UK REALLY HAVE A BEARING ON THE GERMAN CRIMINAL TRIAL?

Formula 1 boss, Bernie Ecclestone and three other parties were accused of making a ‘corrupt bargain’ with a German banker Dr Gerhard Gribkowsky. It is alleged that they paid him £27 million in bribes to undervalue BayernLB’s stake in the sport prior to its sale to current owners CVC Capital Partners eight years ago. Constantin Medien were a shareholder in the sport and claim that they lost out on a large amount of commission as a result of Ecclestone’s dealings with Gribkowsky. A seven week hearing took place in London’s High Court aimed at establishing whether the shares were undervalued as alleged.

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