Category: Domestic News

Taxation without representation in DC

September 23, 2019

By Gerhard Ottehenning

WASHINGTON, D.C. — D.C. Mayor Muriel Bowser provided testimony before Congress on the merits of D.C. statehood last week, bringing the issue to the House of Representatives for the first time in over 25 years. Despite widespread opposition outside of the District, statehood holds the distinction of being one of the few issues that unites most D.C. residents. While the D.C. government remains mindful of political headwinds, its goal is to keep the issue at the forefront of voters’ minds in 2020, should the Democrats retake the U.S. Senate and presidency. In a crowded field of headline-grabbing policy proposals, that may prove no easy task. 

The popular D.C. slogan “taxation without representation,” emblazoned on the District’s license plates, encompasses D.C. residents’ primary complaint: Washingtonians currently elect all of the officials that run the city (e.g. the mayor, D.C. city council), but Congress ultimately has the final say on D.C.’s laws.

In 2016, D.C. residents participated in a symbolic referendum on statehood. The New York Times reported that 85.8% of voters approved the measure. A non-scientific poll of SAIS students found most students either in favor of statehood or undecided. Second year HNC Certificate-SAIS MA student Kevin Acker said, “I am indifferent, but that’s only because I don’t know enough about it. The key question for me would be, would statehood better equip the D.C. government to provide public services to its residents?”

D.C. statehood has the backing of most of the 2020 Democratic presidential candidates. However, the path to statehood faces two hurdles: In a recent Gallup poll, 64% of Americans opposed D.C. statehood, and the partisan lean of D.C. guarantees that Democrats would gain a congressional seat and two senators—ensuring fierce opposition from Republicans. 

Opposition to D.C. statehood should not be interpreted as a broader reluctance by the American public toward admitting new states into the Union. A July Gallup poll found that 66% of Americans were in favor of Puerto Rico becoming a state. Nor can the blame be laid solely on partisanship. The majority of conservatives, moderates and liberals surveyed were not in favor of D.C. statehood. 

In an interview with Politico, Gallup senior editor Jeff Jones drew a link between D.C. statehood and the public’s opinion of the federal government. “People aren’t very positive about the federal government, so it’s possible some of that rains down on D.C.’s population and local government.” It’s also possible that the public falls back on their opinion of the federal government due to a lack of information. Acker said, “if the people surveyed have only done as much research on this as I have or less, then they don’t know enough about it to make that judgement based on facts.”

Despite this opposition, Mayor Bowser took a strong stance during the congressional hearing on H.R. 51, the Washington, D.C. Admission Act. She said, “It should not matter what our politics are or what yours are—that is beside the point. The point is that to continue to deny statehood to the 702,000 residents of Washington, D.C. is a failure of the members of [Congress] to uphold their oath of office. I would, likewise, fail to do my duty by not forcefully advancing our statehood petition…This is America, and Americans are entitled to equal protection under the law, and that’s why we are demanding statehood.”

Life after SAIS: Dialogues with young alumni at the International Monetary Fund

September 24, 2019

By Yilin Wang

WASHINGTON, D.C. – This week, the SAIS Observer sat down with four recent SAIS graduates who shared a common interest in macroeconomics despite their different backgrounds. They shared stories of how attending SAIS changed their lives—often in ways they had not expected—and which courses from SAIS’s extensive catalog have had the greatest impact on their careers.

For Miguel Mendes, a 2017 MA graduate who concentrated in Latin America Studies, his path to his current job in the African Department of the International Monetary Fund (IMF) was all but linear. “My first job out of college was a financial auditor, and then I also worked as an economic adviser in the Portuguese cabinet for a while. My work at the government focused on private sector development and export promotion, and it was through this experience that I first got to engage in work related to the emerging markets. I kind of built on that experience later when I pursued a specialization in emerging market at SAIS; I also did an internship at the World Bank office in Brazil through my concentration, which was a valuable on-ground experience that allowed me to observe different worlds and see different realities.”

While at SAIS, Miguel took a broad variety of regional studies courses deepening his knowledge of Asia, Africa and Latin America, along with coursework in emerging markets. “I think courses where you could learn hard skills are important, but it’s also imperative that you understand the story behind the numbers. In that sense, the regional courses at SAIS are very helpful,” he said.

Fellow SAIS alumna Mengyi Li, who graduated from the MA program in 2018 and recently joined the Commodity Unit at the IMF, also found that her career aspirations changed over the course of her time at SAIS. “I initially wanted to work in the development field. In the past, I had some experience researching [the] poverty trap and working on microfinance projects. I enjoyed the work in international development and believed that people in the field had very respectable ideals, but I had my reservations. Over time, I thought that getting out of poverty required a lot more than just external aid; people in poverty need to have motivation on their side, and what we could do was limited.”

At SAIS, Mengyi took several classes that proved to be imperative for her later career development, one of them being “Energy Markets in the Middle East and Central Asia”—a class she took simply because, she said, the subject material sounded interesting. “I never thought that I would end up working on the commodity team here at IMF, but you know, things just happen like that. Another class I really liked was called ‘Financial Market Development,’ in which I wrote a paper about the financial sector of Saudi Arabia. I was just curious at the time when I chose the country, but it turned out that at my first job after graduation at the World Bank, I was assigned to research Saudi Arabia and other Middle Eastern countries. My advice to current students is that, instead of only picking those ‘practical’ classes, it might be a good idea to explore a little bit and choose classes out of your personal interest—you will be surprised by how they will come to influence your career later.”

Of the four alumni interviewed, perhaps 2019 SAIS MIEF graduate Manchun Wang, who currently works in the African Department at the IMF, experienced the biggest change in her career trajectory while at SAIS. “SAIS gradually changed my views on how I should plan my career, and it was the first time that I had ever considered working in the public sector,” she said. “I didn’t know about other choices but private-sector jobs when I first arrived at SAIS. After talking to several SAIS alumni working at multilateral organizations, I learned about public sector jobs. Then, I started to realize, it’s very important to keep your options open. And this would probably be my only chance to work at a job like this—I could always go back to work at securities or corporates at a later time. Therefore, I made up my mind to pursue a position in the IMF.”

Manchun found the courses in the MIEF program extremely helpful in preparing for her job at the IMF—especially the four econometrics courses she took. Nonetheless, she stressed that for students seeking solid, quantitative theory training in preparation for a Ph.D. program, they might need to take more advanced economics courses than those offered at SAIS. When asked about her future plans after the IMF, she said, “I am now doing research as part of my job while learning more skills to help me in my research. I still did not make up my mind if I should pursue a Ph.D. degree, an MBA degree or even take other options. After all, people choose differently at different phases of their lives.”

In contrast to the other three alumni, Simon Paetzold, who graduated from the Tsinghua-SAIS dual degree program with a concentration in International Political Economy (IPE) in 2018, said he had a clearer sense of his career plans before attending SAIS. Simon, who joined the Finance Department at the IMF after graduation, said, “Prior to my undergraduate study, I lived in China doing a cultural diplomacy program and thus formed strong connections with this country. I was specifically interested in dual degree programs in international relations between a Chinese university and a university in the United States or Europe. Among all programs that met this criterion, the one at SAIS had the strongest quantitative and economic component, and that’s what I valued.”

Of the IPE program at SAIS, Simon said, “The IPE discipline is, in my understanding, and especially the way it was taught at SAIS, a very academic discipline. But there were also classes at SAIS that focused more on applying economic and political analyses, one of them being ‘Financial Market Analysis in the Public Sector.’ We looked at how political processes and financial markets interacted in the real world and it was truly fascinating. Nevertheless, I do find the academically-oriented classes in IPE as well as econometrics courses taught at SAIS very important, as they allow you to speak more intelligently about the literature and quantitative research methodologies.”

SAISer Book Review: “The Financial Markets of the Arab Gulf: Power, Politics and Money,” by Professor Jean-François Seznec and Samer Mosis

By Leif Olson

For many, the Arab Gulf is associated with generous rentier states, opulent monarchs with fantastical material wealth, and behemothic buildings like the Burj Khalifa. One might wonder how the region developed such a robust financial ecosystem. Jean-François Seznec, an adjunct lecturer in the Middle East Studies department at SAIS, and Samer Mosis, a SAIS Strategic Studies alumnus, seek to answer this question and peer into the future of Gulf finance in their 2018 book, “The Financial Markets of the Arab Gulf: Power, Politics and Money.” Seznec and Mosis delineate a detailed financial history of the Gulf economies and their structural dependence on culture. Seznec and Mosis argue that several interrelated factors changed the form and function of financial institutions in the Gulf and led to its current wealth. They  predict that, given economic pressures, Gulf states will slowly relinquish their stranglehold on markets, allowing them to develop practices and norms typical of Western markets. For students interested in the role of the Gulf economies globally, especially regarding investment in Asia, financial diversification, and cultural-economic “Westernization,” this book is an essential resource.

Seznec and Mosis trace the history of financial markets in the Gulf Cooperation Council (GCC) states, taking note of Islamic banks that shaped interest creation in the region, money-changers who went from individual entrepreneurs to institutions, and the Bahrain Offshore Market, which, with the development of new financial technologies, became obsolete, excluding Bahrain from financial dominance. They then transition to individual analysis of each GCC state—the United Arab Emirates (UAE), Saudi Arabia, Bahrain, Qatar, Kuwait and Oman. The UAE chapter revolves largely around Dubai, which the authors compare to Abu Dhabi. The authors explain that the UAE is an excellent business location, highlighting how well-managed Free Trade Zones (FTZs) like the Jebel Ali Free Zone Authority facilitate foreign investment.

Where the UAE’s financial markets are relatively free, Saudi Arabia seems intent on total control. The Saudi Arabia chapter explores the relationship between the Saudi Arabian Monetary Authority , the Saudi Public Investment Fund, and the rest of the financial market. Since the 1970s, the Saudi Crown has regulated or controlled much of the economy—but Samer and Mosis predict that it will likely cede some control as the industrial sector grows and Crown Prince Mohammed bin Salman’s “2030 Vision” unfolds. 

The chapter devoted to Bahrain, Qatar, Kuwait, and Oman paints a less optimistic picture. Bahrain has become economically reliant on Saudi Arabia and the UAE, despite its once hopeful position as a banking hub. Qatar suffers from some form of “Dutch Disease” with little indication of diversifying significantly from its major export, natural gas. Kuwait is a stereotypical rentier-state with an anemic private sector—which prevents it from attracting investment and precludes its candidacy as a major financial power. Finally, Oman, while benefiting from a miraculous transformation at the hands of Sultan Qaboos bin Said Al Said, has economically stagnated. Unless Omanallows privatization at a greater rate, these conditions may generate political unrest. The remainder of the book is made up of four case studies which illustrate in detail the interaction between financial markets and power structures in the Gulf. 

Seznec and Mosis excel when combining stories of the past with projections into the future. In one example, the authors examine the Gulf’s new focus on Asia. Between 1990 and 2013, the percent of total GCC exports to Europe and North America shrank from 40% to 19%. In the same time frame, the share of GCC exports to India and China grew from 2-3% to 12%.  The authors use this data as a warning to Europe and North America. The authors describe the run-up to the 2008 financial crisis, a time when Gulf states were treated as second-class economies, and xenophobia punctuated their interactions with the West. As the crisis deepened, the West changed its tone toward the GCC, pressuring them to bail out the global economy with their massive dollar-denominated liquidity. While the GCC eventually conceded, they have not forgotten how the West treated them. The authors contend that this could mean trouble for Europe and North America in the event of another major recession. 

GCC funding organizations, like Mohammad bin Salman’s Public Investment Fund, are leading investment in Asia. The PIF is tasked with carrying out Vision 2030 by investing in diverse, high-risk, high-return investments. In the 1970s, Saudi Arabia created the PIF, the Saudi Industrial Development Fund, the Agricultural Development Fund, and the Real Estate Fund, to prevent chronic “backwardness” in their economy. The authors chronicle the push from the Saudi monarchy to ensure economic diversification and modernization. They describe a similar process in the UAE. Abu Dhabi and Dubai have intertwined economic and cultural structures that drive diversification. Again, the authors demonstrate that financial and economic change are driven by more than just economic factors, citing the unique political structure as one factor in the shift from non-oil GDP of 37% in 1972 to 69% in 2015. The authors also explain that the UAE’s growing private sector is due, in large part, to the proliferation of FTZs in Dubai.

FTZs and diversification are indicators and drivers of modernization in GCC markets. This modernization comes with a degree of “Westernization.” Seznec and Mosis make a tentative, but astute, observation that as Saudi industry continues to develop, more people from diverse familial backgrounds will meet each other in the workforce. Perhaps, they surmise, this will lead to cross-cutting cleavages within the society which may reduce historico-cultural separation. More broadly, financial markets across the region are becoming more dependent on the private sector, which may mean similar cultural shifts in other states. 

Seznec and Mosis’s compelling storytelling and forward-looking conclusions make this book both an engaging read and an excellent resource for students interested in transitioning economies in the GCC. Students looking to learn more might consider Professor Seznec’s classes, which include Business in the Middle East, Energy in the Gulf, and Politics in the Gulf. Mosis, who now works as a Senior Analyst at Global Platts Analytics, serves as a student mentor through the SAIS Career Center and may represent another resource for interested students.

The Kurds: Independence is Going to Have to Wait … Again Part 3

Originally published in 2018 as a larger piece in DEMOS Vol. 1, Article 6,“The Kurds: Independence is Going to Have to Wait … Again” explores the past, present, and future implications of the Kurdish independence movement. The piece in its entirety can be found here.  

This piece is also the 2018 Winning Recipient of the Annual First-Year Writing Contest at Lake Forest College.

The first and second installments of this series can be found on The SAIS Observer website here, covering the political positioning of a Kurdish referendum as well as potential international responses.

By Zach Klein

Then in 2003 the U.S. invaded Iraq once more and this time ousted Saddam Hussein. In the post-war theatre, the U.S. stayed and provided stability to Iraq and helped ensure the creation of a new democratic constitution recognizing the KRG. The U.S., along with rebuilding the nation, also acted as a mediator between the Arab majority country and the Kurds helping to ease tensions (Romano 1345). However, the U.S. withdrew and the rise of ISIS dramatically changed the U.S. foreign policy in the region. No longer was the U.S. focused on stabilizing the region in the wake of large power vacuum, now the focus was on holding Iraq together and defeating the Islamic State. This change in foreign policy is the reason why the U.S. will not acknowledge the referendum. The U.S. spent billions of dollars, thousands of lives, and political capital stabilizing Iraq and is not ready to let Iraq be divided without its approval. At first the goal was preventing the Islamic State from taking over Iraq, and then it evolved into the overall destruction of the Islamic State once their advance was halted and reversed. The U.S. then began providing airstrikes against the Islamic State while supplying arms and other supplies to the Kurds in both Iraq and Syria to help fight ISIS (Glenn). The U.S. still had the desire to preserve stability in the region, but stability now had a new context. Rather than managing ethnic conflicts and defusing tensions which had been the case in the post 2003 world, it was now about preventing the onslaught of anarchic jihad, being perpetrated by ISIS, against states weakened by recent wars. The U.S. seeks territorial integrity of current nations, until the Islamic state has no more ground under its control. After the defeat of ISIS, the U.S. will allow talk of the creation of new states but no sooner. Since, the Kurdish referendum is a step towards secession, current U.S. foreign policy does not support the timing of the referendum (Dubin).

Since neither the U.S., Turkey, Iran, Iraq, nor any other major regional or international power is willing to support or recognize the referendum, it carries no weight. International law regarding self-determination exists, and a plethora of treaties and international organizations recognize the right but almost exclusively for colonial holdings (Emerson 136-40). It has been used for groups not in colonial holdings, i.e. Kosovo, but the vast majority of cases have been colonial domains in the decades after World War Two (Emerson 140). However, in practice there is no set legal way for peoples to exercise their right to self-determination without the aid of an outside power. Currently, no designated international organizations exist to enforce the right, which means these struggles for self-determination by minority populations in countries are left to the mercy of the government. Aleksander Pavkovic and Peter Radan point out in their essay for the Macquarie Law Journal that “territorial sovereignty still remains the central source of political power and the main locus of international recognition,” which is to say that control of the land allotted to a nation is how a government maintains its legitimacy (Radan 5). Given the newness of the Iraqi government and the humiliation it has suffered at the hands of the Islamic State, Iraq is keener than most to strengthen its legitimacy and not tolerate any secessionist movement. Since there are currently no outside powers willing to protect the KRG from the repercussions of the referendum or even try to mediate between the Iraqi Arabs and Kurds, the referendum must fail. Pavkovic and Radan further explain that “in relation to the question of whether the liberty of a minority within a state prevails over the liberty of the majority, cases of attempts to secede from a liberal- democratic state suggest that it is the majority that prevails,” (Radan 9).

Zach Klein is a sophomore majoring in international relations and economics at Lake Forest College. Zach wants to continue to study Middle Eastern politics and hopes to work as an analyst for the State Department.

The Kurds: Independence is Going to Have to Wait … Again Part 2

Originally published in 2018 as a larger piece in DEMOS Vol. 1, Article 6,“The Kurds: Independence is Going to Have to Wait … Again” explores the past, present, and future implications of the Kurdish independence movement. The piece in its entirety can be found here.  This piece is also the 2018 Winning Recipient of the Annual First-Year Writing Contest at Lake Forest College.

The first installment of this series can be found on The SAIS Observer website here, which discussed the sensitive political positioning of Kirkuk as well as the social and economic factors that have played a role in Kurdish independence movements.

By Zach Klein

The next aspect to observe is the general lack of acceptance from the world regarding the referendum. Both Iran and Turkey have stated that there will be harsh repercussions should the vote be allowed to happen. The two nations fear that the referendum will embolden Kurdish insurgencies within their borders to renew their push for independence. Turkey plans on applying sanctions on the Kurdish Regional Government (KRG) to eliminate the ability to sell oil through the one pipeline that goes through KRG territory, across the Turkish border, and to the Mediterranean port of Ceyhan (Bektas). The Iraqi and Iranian foreign ministries have both stated they would work together to draft responses to the upcoming vote. More than likely, they will come up with economic sanctions of their own (El-Ghobashy). Normally when regions autonomously declare independence, there is an outside international power which offers its support and protection. When Kosovo declared independence in the 1990s, the U.S., Western Europe and NATO were able to shield Kosovo politically and militarily from the Serbian Government, which allowed it to remain independent. However, no regional power or any international power has voiced any support for the Kurdish referendum besides Israel, which is not capable of ensuring the independence of the would-be nation single-handedly. France has voiced lukewarm support by stating that they would neither oppose nor support the referendum. However, the real shock to the international community, and to the Kurds in particular, was when the U.S. stated the referendum needed to be postponed (Arraf). According to Stuart Jones, former U.S. Ambassador to Iraq, the United States was concerned that an independence referendum “…would be not good for Kurdistan, not good for Iraq, and would play into the hands of the hardliners and the hands of the Iranians.” KRG President Massud Barzani condemned the American response, and Kurds took to social media alleging that the United States was ungrateful for Kurdish support- and Peshmerga fighting force assistance- in combating Islamic State groups in the region. For the Kurds, an autonomous regional government with American support is insufficient when compared to the possibility of real independence. “If (independence is) not good for us, why is it good for you?” Barzani asked in an Erbil interview.

Some context for Kurdish frustration is necessary here- the idea of Kurdistan as an “autonomous region” is not new. The reason that the KRG exists in this political and strategic limbo is because of the U.S. In the aftermath of the first Gulf War in 1992, when U.S. forces established a Kurdish safe haven in northern Iraq, Saddam Hussein continued to push further north with his anti-Kurdish agenda and pursued a number of genocidal actions (Al-Khafaji 35). These measures included the Anfal Campaign, which forced the relocation of Kurds out of Kirkuk and several other cities, and resulted in the increase of the Arab population in the area, thereby making the area more responsive to Hussein’s rule at the time (Al-Khafaji 35). But, according to David Romano, Saddam Hussein was not satisfied and continued by “using internationally prohibited chemical weapons in such areas as the city of Halabja, Balisan and parts of the Duhok Province. They have razed some 4,500 towns and villages while driving tens of thousands of unarmed civilian Kurds, among them Faylis and Barzanis, into an unknown future” (Romano 1346).

TO BE CONTINUED

Zach Klein is a sophomore majoring in international relations and economics at Lake Forest College. Zach wants to continue to study Middle Eastern politics and hopes to work as an analyst for the State Department.

The Kurds: Independence is Going to Have to Wait … Again: Part 1

Originally published in 2018 as a larger piece in DEMOS Vol. 1, Article 6,“The Kurds: Independence is Going to Have to Wait … Again” explores the past, present, and future implications of the Kurdish independence movement. The piece in its entirety can be found here.  

This piece is also the 2018 Winning Recipient of the Annual First-Year Writing Contest at Lake Forest College.

By Zach Klein

Kirkuk is one of the larger cities in northern Iraq and boasts nine billion barrels of proven crude oil reserves (Time). This city is claimed by both the KRG (Kurdistan Regional Government) and the central Iraqi government, and ownership will have to be negotiated when the borders of an independent Kurdistan are drawn. Baghdad has stated that it will not accept any outcome in which Kirkuk is not under its authority. Meanwhile, the KRG claims Kirkuk as sovereign Kurdish territory. While the current territory that Baghdad has allotted to the KRG has four billion barrels of proven reserves, the difference of 4 to 13 billion barrels would be critical to a new microstate surrounded by hostile neighbors (Time). Currently, it is assumed that there is a Kurdish majority in Kirkuk. However, there has not been an effective census in the city since 2003, so there is no guarantee that it is still the case (Kirkuk). The current city council of 41 has an ethnic composition 26 Kurds, nine Turkmens, and six Arabs; a Kurdish majority is possible if these numbers are representative of the greater population, which would give reason for the city to be included in the new borders (Kirkuk). But, since the city has 4% of the total global oil reserves within its territory, it is highly likely that Baghdad will keep Kirkuk in its control (Time).  Already, the Kurds have tried to act economically independent of Baghdad to disastrous effect, as explained by Denise Natali in an article for the Brookings Institute:  

The KRG’s financial break from Baghdad has had direct consequences on the Kurdistan
Region’s internal stability and economic viability. In the absence of a financial buffer to replace Baghdad (by June 2014 the KRG had no savings in its central bank) the KRG’s oil gamble with Turkey has devastated and destabilized local populations and the economy. Civil servant salaries have gone unpaid for months, thousands of local businesses have closed, IOC payments remain in arrears, new investment has halted, and nearly 25,000 Kurds, mainly educated youth, have fled the Kurdistan Region over the past eight months. The KRG has also borrowed billions from Ankara and local businesses while front-loading its oil sales to 2016 in the attempt to meet operating costs and a U.S.$22 billion debt accumulated over the past year.

The KRG has made deals bypassing Baghdad and the Iraqi State Organization for Marketing of Oil (SOMO) to sell its oil reserves with Turkey in an attempt to gain further independence from the central government. But, in the process, they have attracted the ire of Baghdad, resulting in disaster for the Kurdish economy. Without Kirkuk, the KRG would control some oil, but not nearly enough to generate enough income for the government to function properly. Additionally, it is essential to consider the new cost of defense. Under the current system, the Kurdish defense forces known as Peshmerga are paid for by two sources, the KRG and Baghdad (Ahmed Rasheed). If the KRG secedes, it is left to defend all of its territory and maintain its armed forces of 115,000 fighters all on its own (Time). While the Islamic State is losing ground quickly, it is still far from being defeated, as it already has started to become an al-Qaeda-like organization and begun to to operate in cells to carry out attacks (Engle). While the KRG is largely independent of Afghan authority economically, it has not totally escaped Baghdad’s overall economic influence. Additionally, the two main parties—the KDP (Kurdistan Democratic Party) and PUK (Patriotic Union of Kurdistan)— have a heated rivalry that, with the emergence of the Islamic State, has subsided temporarily. With ISIS falling on all fronts, the reemergence of this rivalry is inevitable given their current social and economic standing. Problems such as exceedingly high foreign debt, large numbers of refugees and the inability to pay government salaries and provide services are what led to the 1998 civil war between the KDP and PUK that devastated the area (Natali). Ultimately, the independent state would be paralyzed with inefficiency from within, which would leave it open to attack from outside forces.

Zach Klein is a sophomore majoring in international relations and economics at Lake Forest College. Zach wants to continue to study Middle Eastern politics and hopes to work as an analyst for the State Department.

Cleaning up the Laundromats

By Anthony Meyer

This past summer, Danske Bank came under international scrutiny for allowing 234 billion dollars of allegedly laundered money by non-resident accounts through their Estonian branch from 2007 to 2016. Most of the recent international money laundering cases started in the aftermath of the 2008 global financial crisis when despots and criminals wanted to retain some of the value of their illicit assets. The Danske Bank scandal window goes well beyond the financial crisis and stands out not only because of the sheer amount of money transferred but also due to the unresponsive banking leadership during and after the dirty money transfers. With U.S. financial authorities once again looking to flex their global regulatory muscle, Danish regulators and Danske Bank are hoping for a merciful verdict.

If recent money laundering cases serve as precedent for what U.S. and European regulators might do, Danske Bank could receive a crippling fine or be cut off from the U.S. correspondent banking network. Last year the U.S. Treasury effectively killed Latvian bank ABLV by banning banks from doing business with them after they broke U.S. banking sanctions on North Korea. This action sends two different messages to banking bosses and criminal organizations looking to funnel dirty money. To the bankers, it says that regulators are willing to use any means necessary, including blunt destruction, to prevent future money laundering. To criminals, it’s a warning that regulators are coming and banks are clamping down hard.

Along with substantial fines, banking regulators need to start performing regular cross-border money laundering stress tests. These stress tests may include regulators posing as would-be money launderers shopping for an avenue to move money. Making these test results public puts pressure on banks to update and realign their anti-money laundering practices and help weed out bankers who don’t see money laundering as a threat to the legitimacy of their bank or the larger financial system. Unfavorable stress test results would push away customers who don’t want association with banks that aid criminals or toxic regimes plundering their own treasuries. These stress tests would also help create opportunities for auditors to perform anti-money laundering audits and help rebuild trust between banking regulators and banks. Recently, the Federal Financial Supervisory Authority (commonly known as BaFin) forced Deutsche Bank to hire KPMG to help guide and improve their internal anti-money laundering policies.

Fintech may also help regulators and auditors searching for and stemming the flow of dirty money between international banks. Anti-money laundering bots would comb through banking transaction data in order to find patterns used by money launderers and help prevent large sums of illegal money flowing between banks in the future. Although anti-money laundering bots could become another tool in an auditor’s financial war chest, new technology won’t prevent money laundering if bankers aren’t willing to report questionable money and clients. Unfortunately, fintech probably would not help Danske Bank. Regulators, compliance executives-turned whistleblowers and other banks flagged suspicious behavior and accounts well before the first allegations of illicit activity hit the front page of newspapers.

Thomas Borgen, the now former CEO of Danske Bank, presided over the international banking division of Danske Bank (which included the Estonian laundromat branch) at the time of the laundering. Borgen, while CEO of Danske Bank, failed to take appropriate measures to effectively investigate the transactions and disregarded warnings from Estonian, Danish and Russian regulators as well as internal whistleblowers. Fearing complicity in laundering dirty dollars, Danske Bank didn’t even begin to seriously probe suspicious accounts until 2015, after Deutsche Bank and J.P. Morgan Chase quit acting as correspondent banks for them. Ultimately, new tools, more audits and the fear of fines may help guide banking executives away from dirty money and suspicious characters but it’s up to the executives to make the ethical and responsible decision to investigate instead of becoming complicit.

Anthony Meyer is a 2016 graduate of Drake University in Des Moines, where he currently lives and works. He is formally educated in history and economics, is an avid reader and researcher of international finance topics and actively participates in the IR community. He also grills a mean steak.

 

Outreach and External Sourcing Pilot Program

Picture2

By Cecilia Panella

Since its inception, The SAIS Observer (TSO) has operated primarily as a student-driven school newspaper. We’ve produced articles on a variety of issues that concern the SAIS student body, and have endeavored to provide timely, accurate and incisive analysis on current events written to the standard of excellence that one would expect from one of the nation’s most prominent schools for international relations. But, the reality is that our world is not limited to the SAIS community, and before this year, our paper didn’t reflect a wider world view.

To that end, the executive leadership for the 2018-2019 school year tasked TSO with including a more diverse contributor base from outside the SAIS community while maintaining the high standards for academia and professionalism that has been its legacy. The result, as some of you may know, is the Outreach and External Sourcing (OES) Program. This program is geared towards the orientation of SAIS in the larger regional and global community, and is meant to focus our attention towards the voices that we would have otherwise had limited access to during our tenure as Hopkins students. Our goal is simple: feature external writers and contributors with different opinions and a high level of scholarship. The process is one of personal and professional networking and has taken our staff the better part of the summer to craft. We’re extremely proud of the results we have so far, and, moreover, are extremely proud of the precedent that we are setting for future generations of TSO leaders and contributors.

As a student body, we strive for a diversity of opinions in hopes of better informing our own. The Outreach and External Sourcing Program will provide the greater SAIS community with the opportunity to access those opinions.

As staff, we endeavor to provide comprehensive policy analysis, timely reporting, and do so with the best interests of SAIS students, faculty and staff in mind. The OES Program will incorporate students and young professionals with various experience levels and regional interests in the Washington, D.C. area and bring their analysis to bear on the topics of the moment.

As a leadership team, the executive board of TSO seeks to better the SAIS community through information and analysis access. It is therefore our responsibility to cultivate the widest and most thorough representation of information and opinions available, and make them accessible to the SAIS community. This program will broaden both our perspectives and our horizons, and we look forward to working with you for the betterment of our campus and SAIS experience.

Those interested in either contributing or providing a contact interested in doing so, please visit The SAIS Observer website or reach out to us at sais.observer@gmail.com. We look forward to hearing from you and helping to create a more comprehensive and globally-oriented student newspaper.

Let girls map on International Day of the Girl Child

Editor’s note: The importance of representation for young girls academically and professionally is  critical particularly in Science, Technology, Engineering and Mathematics (STEM) fields, where women remain especially underrepresented. To address the gender gap in these fields, we must introduce and engage young girls with STEM at a young age. In 2011 the United Nations declared October 11 as the International Day of the Girl Child in support of youth advocacy around the world. This celebration is meant “to help galvanize worldwide enthusiasm for goals to better girls’ lives, providing an opportunity for them to show leadership and reach their full potential.”

This article was originally featured by the USC Center on Public Diplomacy.

image_from_ios
Walsh Family | Copyright 2018.

By Kana Walsh

On October 11, the world will celebrate the International Day of the Girl Child. This year, the focus is on preparing girls to enter a world of work that is being transformed by innovation and automation. By engaging organizations and groups around the world, the United Nations is bringing people together to address this global issue. This involves encouraging them to expand existing learning opportunities, chart new pathways and call on others in the global community to rethink how to prepare girls for a successful transition into the world of work.

I believe one way we can work together to prepare girls for the world of work is to promote Science, Technology, Engineering and Math (STEM). As pointed out by Gwendoline Tilghman, the gender gap in STEM starts in school. When girls are not introduced to STEM early in life, they are far less likely to pursue STEM degrees. Furthermore, girls are far less likely to study STEM subjects when their friends are not studying those subjects. We therefore need programs to introduce groups of girls to STEM subjects. This includes humanitarian mapping.

Open-source, collaborative mapping projects allow users to contribute geospatial data to help visualize locations around the world. This information can be used to tackle humanitarian challenges by identifying where help is needed most. If we want to prepare girls for a successful transition into the world of humanitarian mapping, then it is clear that we need to get more girls mapping at a younger age. And that isn’t going to be easy. Right now, there are a lot of barriers that make it difficult for girls to learn how to use humanitarian mapping tools.

On the International Day of the Girl Child, I believe that countries should promote programs that introduce groups of girls to humanitarian mapping.

Unfortunately, there are no programs specifically designed to get kids into humanitarian mapping, and there are no humanitarian mapping platforms that are specifically designed for kids. Furthermore, age restrictions limit kids from being able to use humanitarian mapping programs, and there are no learning materials specifically designed to help kids understand them. It is also very difficult for kids to participate in humanitarian “mapathons.”

Take YouthMappers, for example. They have created a campaign called “Let Girls Map,” which supports the inclusion of girls and women in mapping communities. It also encourages the celebration of achievements of women student mappers. Let Girls Map is a great way to get girls and women involved in humanitarian mapping. But the problem is that it is specifically designed for young women in college—not for children my age. (editor’s note: Kana is a Cadette in Girl Scouts).

Recently, I completed my Bronze Award on coastal flooding for Girl Scouts of the United States. While researching my project, my dad introduced me to Missing Maps. After using this humanitarian mapping platform, I realized that it would be fun and educational for girls my age to learn how to use humanitarian mapping platforms. I really enjoyed being able to visually go to places halfway around the world and see how mappers can help people affected by coastal flooding. However, I also realized that these platforms are not designed for kids to use. That needs to change. Girls my age should be able to map too.

On the International Day of the Girl Child, I believe that countries should promote programs that introduce groups of girls to humanitarian mapping. In the words of Gwendoline Tilghman, these programs would not only increase STEM education for girls. They would also present an opportunity to strengthen economies for future generations. This makes them a smart, sustainable investment that will promote prosperity, gender equality and disaster preparedness.

Kana Walsh is the daughter of a PhD student being supervised by a SAIS professor. She is a member of the Girl Scouts of Hawaii. She is also a member of the British Girlguiding Overseas. This OpEd is an extension of her Bronze Award Project for the Girl Scouts of the USA. The project was on coastal flooding in East Africa. And, it was completed while accompanying her father on his doctoral fieldwork.

For more information on how Kana is continuing to pursue her goals and helping other young women learn how to map, you can follow her blog – Girls Can Map. You can also follow her on Twitter @girlscanmap to stay up-to-date on the organization’s progress. Girls Can Map is still in the development phase and your support is very much appreciated.

For more articles like this one, please visit The SAIS Observer website. We are in the midst of developing an Outreach and External Sourcing Program that would allow us to feature more voices outside of SAIS for the benefit of our greater academic and professional community. If you or a colleague would like to participate, we invite you submit a pitch on our website or at sais.observer@gmail.com. Make sure to tag “OES Program” in the subject line. We look forward to hearing from you, working with you and making our tomorrow’s better.