The Corner

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Cleaning Up Corruption Is a Key to Middle East Stability

Workers at the damaged site of the Saudi Aramco oil facility in Abqaiq, Saudi Arabia, September 20, 2019. (Hamad l Mohammed/Reuters)

Headlines in the Middle East revolve around the risks from terrorism. Drone attacks that were blamed on Iran against Saudi Arabian oil facilities roiled the world’s oil markets last month, and an Iranian tanker was then damaged by rocket attacks a couple weeks later.

But the real long-term threat to the stability of the region is the lack of respect for the Rule of Law — the principle under which people and institutions are accountable under laws that apply equally to all.

Across much of the developing world, the corruption of courts and other government institutions threatens the free flow of goods and capital that promotes economic growth. Left unaddressed, such threats can lead to heightened tensions among nations and even outright trade wars. Diplomats operate under constraints that limit how much they can call out international bad actors who violate the rule of law.

That’s why the role of outside watchdogs is so important in promoting the Rule of Law and holding nations to the standards of fairness and impartiality they claim to meet.

The Rule of Law isn’t doing so well in the world these days. Using surveys of 120,000 households and 3,800 experts in over 100 countries, a new report by the World Justice Project shows a decline in the Rule of Law for the second year in a row. A total of 61 countries are in decline, 23 are staying the same and 29 improving. Denmark, Norway, and Finland topped the list of countries that most observe the Rule of Law.

By contrast, the situation in the Middle East is especially dire. A report by Refinitiv, a financial-markets data firm, found that 73 percent of Middle Eastern companies, spiking to 85 percent in Saudi Arabia, are aware of financial crime in their global operations.

Since Mohammad bin Salman, known as MBS, became the crown prince of Saudi Arabia in 2017, he has claimed that the jailing of rival members of the royal family is to provide “greater security for investors.” But his anti-corruption drive mostly resembles a shakedown operation, and his regime continues to target dissidents such as the murdered Jamal Khashoggi. He has also completely ignored the role that Ahmed al-Rajhi, who is his own minister of labor, has played in the Tameer Holding scandal, the greatest real estate fraud in the history of the Middle East, a debacle valued at $1.8 billion by courts in Dubai.

The Tameer case has dragged on in the Dubai courts for eleven years. Omar Ayesh, a Canadian businessman defrauded in the case, has presented documentary evidence that the powerful al-Rajhi family of Saudi Arabia engaged in bribes, forgery, and misappropriation of assets valued in the billions, and also threatened court-appointed experts in Dubai.

The government of the United Arab Emirates, which includes Dubai, expends a great deal of effort touting the fairness of its courts. Shaikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai, even issued a document earlier this year that “no one is above the law in Dubai” and “justice delayed is justice denied.”

The complete failure of Dubai’s courts to live up to such pious proclamations in the Tameer case and others threaten its reputation as a safe place for international business. The Reputation Institute dropped the UAE’s ranking from Number 27 in 2017 Number 36 in 2018. In the World Justice Project’s ratings, the UAE ranks 30 out of 38 high-income countries.

Ayesh is sufficiently agitated by the way he and hundreds of other victims were treated in the Tameer fraud, that he has launched the Global Justice Foundation. It’s a new nonprofit foundation in Washington, D.C., and is dedicated to exposing corruption in other countries, aiding innocent victims caught up in that corruption, and working with like-minded groups to promote good economic practices.

Sidney Powell, a former U.S. federal prosecutor and past president of the American Academy of Appellate Lawyers, chairs Global Justice’s board. (I have advised the foundation on future cases to spotlight.) “We have a huge problem worldwide; business requires certainty within which to operate,” she tells me. “If countries want to become financial capitals, they have to create a legal system that actually enforces the rule of law.”

If regions like the Middle East are ever going to build a stable middle class through economic growth and if the world’s trading system is going to thrive, countries must make sure that corrupt players cannot subvert the rule of law, whether it’s by the purloining of intellectual property, the fleecing of investors or denying justice through endless delays.

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