Editor's Note: On December 3, Richard Bush delivered testimony before the Subcommittee on East Asian and Pacific Affairs of the Senate Committee on Foreign Relations. Read his testimony below and watch the hearing online.

There has been a wide range of views in Hong Kong about the value of democratic elections.

So far, the Chinese government has consistently chosen to engineer the Hong Kong electoral system so that no individual it mistrusts could be elected chief executive (CE) and no political coalition that it fears could win control of the Legislative Council (or LegCo). To elect the chief executive, it created an election committee composed mainly of people it trusts. For LegCo, it established functional constituencies that give special representation to establishment economic and social groups. These functional constituencies together pick half the members of LegCo. As a result, Hong Kong’s economic elite has dominated those institutions.

Major economic interests in Hong Kong have been happy with the current set-up because it provides them with privileged access to decision-making and the ability to block initiatives proposed by the democratic camp. Within this establishment, there is long-standing belief that majority rule would create irresistible demands for a welfare state, which would raise taxes on corporations and wealthy individuals and sap Hong Kong’s competitiveness.

The public, on the other hand, supports democratization. In the most representative election races (for some LegCo seats), candidates of the pro-democracy parties together get 55 to 60 percent of the vote. Those parties have tried for over twenty years to make the electoral system more representative and to eliminate the ability of Beijing and the establishment to control political outcomes.  But there are divisions within the pan-democratic camp between moderate and radical factions, based on the degree of mistrust of Beijing’s intentions.

There is a working class party and a labor confederation that supports Beijing and is supported by it. On electoral reform, it has followed China’s lead.

Of course, any electoral system requires the protection of political rights. The Joint Declaration and the Hong Kong Basic Law protected those rights on paper, and the judiciary generally has upheld them. But there are serious concerns in Hong Kong that political rights are now being whittled away.

The August 31^st decision of the PRC National People’s Congress-Standing Committee on the 2017 Chief Executive election confirmed the fears of Hong Kong’s pan-democratic camp that Beijing does not intend to create a genuinely democratic electoral system. That decision almost guaranteed there would be with some kind of public protest.

Before August 31^st, there had been some hope in Hong Kong that China’s leaders would set flexible parameters for the 2017 election of the chief executive, flexible enough to allow an election in which candidates that represented the range of local opinions could compete on a level playing field. Instead, the rules the Standing Committee of the National People’s Congress laid down were interpreted as ensuring that Beijing and the local Hong Kong establishment, by controlling the nominating committee, could screen out candidates that they saw as a threat to their interests.

I happen to believe that before August 31^st there was available a compromise on the nomination process. The approach I have in mind would have liberalized the composition of the nominating committee so that it was more representative of Hong Kong society and set a reasonable threshold for placing someone in nomination. This would have been consistent with the Basic Law (a Chinese requirement) and likely ensured that a pan-Democratic politician could have been nominated (the democrats’ minimum hope). Hong Kong voters would have had a genuine choice. There were Hong Kong proposals along these lines. Such an approach would have had a chance of gaining the support of moderate Democrats in Legislative Council, enough for reaching the two-thirds majority required for passage of the election plan.

Reaching such a compromise was difficult because of the deep-seated mistrust between the Hong Kong democratic camp and Beijing, and within the democratic camp. If there was to be movement towards a deal Beijing would have had to signal that it was serious about such a compromise, in order to engage moderate democrats. It chose not to, and an opportunity was lost.

Why Beijing spurned a compromise is unclear.

Perhaps it interpreted its “universal suffrage” pledge narrowly, to mean one-person-one-vote, and not a competitive election. Perhaps it wished to defer a truly competitive contest until it was sure that one-person-one-vote elections would not hurt its interests. Perhaps Beijing was overly frightened about the proposed civil disobedience campaign called “Occupy Central.” Perhaps it judged that radical democrats would block their moderate comrades from agreeing to a compromise. Perhaps China actually believed its own propaganda that “foreign forces” were behind the protests. Perhaps it never had any intention of allowing truly representative government and majority rule. But if Beijing believed that taking a hard line would ensure stability, it was badly mistaken.

Whatever the case, the majority in Hong Kong saw the August 31^st decision as a bait-and-switch way for Beijing to continue to control the outcome of the CE election and as a denial of the long-standing desire for genuine democracy. A coalition of student leaders, Occupy Central supporters, democratic politicians, radical activists, and middle class people resorted to the only political outlet they had: public protest. If the Chinese government had wished to empower Hong Kong radicals, it couldn’t have hit upon a better way.

Although Beijing’s August 31^st decision guaranteed a public response in Hong Kong, the form it took was unexpected. Student groups preempted the original Occupy Central plan, and the takeover of three separate downtown areas resulted, not from a plan but from the flow of events. The Hong Kong Police did overreact in some instances, but each time it sought to reestablish control, there was a surge of public support for the core protester groups, mobilized by social and other media.

The protests were fueled by more than a desire for democracy.

Also at work were factors common in other advanced societies. Hong Kong’s level of income and wealth inequality is one of the highest in the world. Young people tend to believe that they will not be able to achieve a standard of living similar to that of their parents. Real wages have been flat for more than a decade. Buying a home is out of reach for young people, in part because a small group of real estate companies control the housing supply. Smart and ambitious individuals from China compete for good jobs.

Hong Kong students have gotten the most attention in the current protests. Just as important however, are older cohorts who are pessimistic about their life chances. They believe that the Hong Kong elite, which controls both economic and political power, is to blame for these problems. They regard genuine democracy as the only remedy.

The Hong Kong government’s response has been mixed but restrained on the whole.

The Hong Kong police did commit excesses in their attempt to control the crowds. Teargas was used once early on, and pepper spray on a number of occasions since then. There was one particular incident where police officers beat a protester excessively (for which seven of the officers involved were arrested last week).

It is worth noting that the scenario for which the police prepared was not the one that occurred. What was expected was a civil disobedience action in a relatively restricted area with a moderate number of protesters who, following their leaders’ plan, would allow themselves to be arrested. What happened in late September was very different. There were three venues instead of one. Many more protesters took part, and they had no interest in quickly offering themselves for arrest. Instead, they sought to maintain control of public thoroughfares, a violation of law, until Beijing and the Hong Kong government made major concessions. Even when courts have ordered some streets cleared, those occupying have not always complied.

After the initial clashes, the Hong Kong government chose not to mount a major crackdown but instead to wait out the protesters. It accepted the occupation for a number of weeks, and now seeks to clear some streets pursuant to court order. Moreover, the government undertook to engage at least one of the students in a dialogue over how to end the crisis. In the only session of the dialogue to occur, on October 21^st, senior officials floated ideas to assuage some of the protesters’ concerns and to improve upon the electoral parameters laid down by Beijing.

The dialogue has not progressed for two reasons. First of all, the Hong Kong government is not a free agent in resolving the crisis. Beijing is the ultimate decider here, and the Hong Kong government must stay within the guidelines it sets. Second, the student federation leaders who took part in the dialogue are not free agents either. They represent only one of the student groups, and other actors are involved. With its leadership fragmented, the movement has never figured out its minimum goals and therefore what it would accept in return for ending the protest. It underestimated Beijing’s resolve and instead has insisted on the impossible, that Beijing withdraw the August 31^st decision. Now, even though the Hong Kong public and the leaders of the original Occupy Central effort believe that the protesters should retire to contend another day, the occupation continues.

For those who believe that the rule of law is a fundamental pillar of Hong Kong’s autonomy, the last two months have been worrisome. Once some members of a community decide for themselves which laws they will obey and which they won’t; once the authorities pick and choose which laws they will enforce and abide by, the rule of law begins to atrophy. The protesters’ commitment to democracy is commendable. The generally restrained and peaceable character of their protest has been widely praised. But something is lost when both the community and its government begin to abandon the idea that no-one is above the law.

Regional views and implications

Observers have believed that the implications of the Umbrella Movement are greatest for Taiwan, because Beijing has said that Taiwan will be reunified under the same formula that it used for Hong Kong (one-country, two systems). And there was momentary media attention in Taiwan when the Hong Kong protests began, but it quickly dissipated. The vast majority of Taiwan citizens have long since rejected one-country, two systems. China’s Hong Kong policies only reconfirm what Taiwan people already knew.

Hong Kong events also send a signal to all of East Asia’s democracies, not just Taiwan. Anyone who studies Hong Kong’s politics and society comes to the conclusion that it has been as ready for democracy as any place in East Asia, and that its instability in recent years is due more to the absence of democracy than because it is unready.

The long-standing premise of U.S. policy is that Hong Kong people are ready for democracy. Since the protest movement began, the U.S. government has reiterated its support for the rule of law, Hong Kong’s autonomy, respect for the political freedoms of Hong Kong people, and a universal-suffrage election that would provide the people of Hong Kong “a genuine choice of candidates that are representative of the peoples and the voters’ will.” Washington has also called for restraint on all sides.

Finally, the strategic question for East Asia is what the rise of China means for its neighbors. That question will be answered in part by China’s power relative to the United States and others. But it will also be answered by what happens between China and its neighbors in a series of specific encounters. Through those interactions, China will define what kind of great power it will become. North Korea, the East and South China Seas, and Taiwan are the most obvious of these specific encounters. But Hong Kong is as well. If the struggle there for a more democratic system ends well, it will tell us something positive about China’s future trajectory. If it ends badly, it will say something very different.

Looking forward, several options exist for resolving the crisis and only one of them is good.

One option is a harsh crackdown by China. Article 18 of the Basic Law gives Beijing the authority to declare a state of emergency in Hong Kong if “turmoil” there “endangers national unity or security and is beyond the control” of the Hong Kong government. In that case, Chinese national laws would be applied to Hong Kong and could be enforced in the same way they are in China. We would then see crowd control, Chinese style. I believe this scenario is unlikely as long as Beijing has some confidence that the protest movement will become increasingly isolated and ultimately collapse.

A second option is that the occupation ends but the unrepresentative electoral system that has been used up until now continues. That would happen because two-thirds of the Legislative Council is required to enact the one-person-one-vote proposal of the Chinese and Hong Kong governments for electing the chief executive. Getting two-thirds requires the votes of a few democratic members. If all moderate democrats oppose the package for whatever reason, then the next CE will be elected by the 1,200-person election committee, not by Hong Kong voters. Protests are liable to resume. There is a danger that in response, Beijing will move quietly to restrict press freedom, the rule of law, and the scope for civil society beyond what it has already done.

The third scenario is for a late compromise within the parameters of Beijing’s August 31^st decision. The goal here would be to create a process within the nominating committee that would make it possible for a leader of the democratic camp to be nominated for the chief executive election, creating a truly competitive election. That requires two things. First, the nominating committee must be more representative of Hong Kong society. Second, the nominating committee, before it picks the two or three election nominees, should be able to review a greater number of potential nominees. Done properly, that could yield the nomination of a democratic politician whom Beijing does not mistrust but whose platform would reflect the aspirations of democratic voters. Prominent individuals in Hong Kong have discussed this approach in print, and Hong Kong senior officials have hinted a willingness to consider it. For such a scenario to occur, Beijing would have to be willing to show more flexibility than demonstrated so far; the Hong Kong government should be forthcoming about what it has in mind; and some leaders of the democratic camp must be willing to engage both Beijing and the Hong Kong government. In the climate of mutual mistrust that has deepened since August 31^st, that is a tall order. But at this point it appears to be the best way out of a bad situation.

Midway through Hong Kong’s second public consultation on the method of electing the next chief executive (CE), both pro-democracy “pan-democrat” legislators and the Hong Kong government and Chinese Central government are still holding their cards close. Following the current public consultation, members of Hong Kong’s Legislative Council (LegCo) will cast an historic vote on political reform. Hong Kong’s mini-constitution, the Basic Law, states that “the ultimate aim is the selection of the CE by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures” (Basic Law Art. 45). Pan-democrat LegCo members currently plan to vote against the eventual resolution on political reform, given their dissatisfaction with the reform process to date. Observers predict that passage of a resolution will happen only if the Hong Kong and Central governments can swing a few pan-democrats over to their side in the final hour.

The problem is a prickly one: Is it possible to design an electoral system that is sufficiently open and democratic in the eyes of the Hong Kong people and, at the same time, that guarantees to the Central Government that the elected leader of this special administrative region accepts the supremacy of the Chinese Communist Party? Even as politicians on each side reiterate the near “impossibility” of changing their positions (see e.g., RTHK Backchat discussion with Justice Secretary Rimsky Yuen at 4:25), thought-leaders from Hong Kong’s universities are inventing creative proposals with the potential to break the deadlock.

The Ground Rules

A 2004 decision of the Standing Committee of the National People’s Congress (NPCSC), China’s national legislature, interpreted the Basic Law to require a “Five-Step Process” in order to amend the selection method for the CE. Hong Kong is now between Steps 2 and 3.

• Step 1: The current CE must submit a report to the NPCSC on the need to amend the electoral system. That submission took place on July 15, 2014 after a five-month initial public consultation process. The CE’s report faced heavy criticism in Hong Kong for not accurately reflecting public opinion.
• Step 2: The NPCSC must issue a decision affirming the need for the amendment. The NPCSC announced that decision on August 31, 2014. It endorsed a system by which citizens may directly vote for the CE but imposed restrictive conditions on the nomination procedure of eligible candidates. The decision triggered 79 days of protest and civil disobedience – what activists and the media have referred to as the “Umbrella Movement.”
• Step 3: The Hong Kong government must introduce the political reform bill in LegCo, and two-thirds of legislators must endorse it. The vote in LegCo is scheduled to take place during the first half of 2015, although a precise date has not been set. The purpose of the second-round public consultation is to forge consensus behind political reform within the parameters set out in the August 31 NPCSC decision.
• Steps 4 and 5: In the event that LegCo endorses the bill, the CE must provide his consent and report the amendment to the NPCSC for its final approval.

If the bill does not receive two-thirds endorsement of LegCo (or if it does, but the NPCSC does not approve) then political reform would fail. Hong Kong would be left with the status quo, and Hong Kong people would lose the opportunity to vote for their chief executive for at least the next seven years.

Limited Room for Negotiation

The terms set out by the August 31 NPCSC decision limit the range of possible political reform options. For that reason, one of the core demands of the Umbrella Movement was to scrap the decision and re-start the Five-Step Process; that didn’t happen, however. In January 2015, the Hong Kong government issued a public consultation document framing the discussion in the lead up to the vote in LegCo. The consultation document hews closely to the NPCSC decision:

• The Nominating Committee (NC) will resemble the previous committee that elected the CE with the same number of members (1,200) belonging to the same limited number of subsectors (38). The Wall Street Journal recently described that committee as “a hodgepodge of special interests.” During the consultation, citizens may discuss adding new subsectors to make the committee more inclusive and representative (such as adding new subsectors to represent the interests of women or young voters), but restructuring will necessarily mean disrupting and eliminating the positions of existing subsectors or committee members. Therefore, the consultation document suggests these changes are unlikely to be achieved (Consultation Document, Chapter 3, Sec. 3.08 p. 10).
• The NC will nominate two to three candidates, and each candidate will require endorsement from at least half of the NC membership. (Given the difficulty of restructuring the subsectors or their electoral bases, these terms would effectively exclude any pan-democrats from nomination.) In order to make this more palatable, the consultation document proposes that citizens discuss a two-stage nomination process. In the first stage, a quorum of 100-150 committee members would “recommend” individuals for nomination. The committee would then elect the nominees from this recommended group (Consultation Document, Chapter 4, Sec. 4.09 p. 14). In theory, the meetings when recommendation and nomination votes take place could be staggered in order to allow campaigning and public debate. The idea is that NC members would take public opinion into consideration before casting their second vote.
• On the voting arrangements, citizens may discuss a “first-past-the-post” arrangement with either a single-round, two-round, or instant runoff vote systems (Consultation Document, Chapter 5, Sec. 5.06 p. 17-19).

Both sides in this negotiation have fired shots across the bow. At the launch of the second public consultation on January 7, Chief Secretary Carrie Lam remarked, “there is no room for any concessions or promises to be made in order to win over support from the pan-democratic members.” For their part, the pan-democrats vowed to boycott the public consultation and veto a resolution that conforms to these terms. They argue that the proposed method of electing the chief executive does not improve upon the status quo.

Most pan-democrat legislators are directly elected from geographical constituencies, and public opinion could provide legitimate grounds for shifting their position. According to polling by the Hong Kong University Public Opinion Programme last month, a plurality of respondents view the Hong Kong government’s proposal as neither a step forward nor a step backward for democracy. If the government were to commit to making the electoral system more democratic in the next CE election in 2022, a clear majority of respondents would then support the government’s plan.

Inventing Options and Finding Common Ground

The two-stage nomination mechanism in the government’s proposal is an acknowledgement that the NC ought to be responsive to public opinion. But without additional tinkering, this procedure does not materially change the incentives of NC members. What if the public had the power to reject the slate of candidates nominated by the committee?

Since the first public consultation, a few academics, including Simon Young at Hong Kong University (HKU), have considered at least two ways this could happen. An “active” approach would allow Hong Kong voters to cast blank votes and require a minimum percentage of affirmative votes for the winning candidate. A “passive” approach would require a minimum voter turnout rate for a valid election. NC members might then have to take public opinion into account.

Early last month, Albert Chen, also a professor at HKU and a legal advisor of the NPCSC, began to advocate publicly for a proposal that employs a ballot with a none-of-these-candidates option (see RTHK Jan. 13 edition of The Pulse). Under his proposal, if a majority of people vote for “none-of-these-candidates,” the slate of candidates put forward by the NC will be voided. When the public votes down the candidates, the NC could revert back to an election committee and choose a provisional CE. Alternatively, the Chief Secretary could assume CE duties during a six-month interim period prior to a new election (drawing upon Basic Law Art. 53). Chen argues that his proposal would give the Hong Kong people—not pan-democrat politicians—decision-making power to accept the new NC and its slate of candidates or to revert back to the status quo.

More recently, Johannes Chan, HKU professor and human rights advocate, floated a competing proposal that would provide voters with the option for negative voting. A 20 percent “no” vote for an otherwise leading candidate would trigger a re-vote. Between the first and second elections, the candidates would have additional time to campaign. If after the second election, still 20 percent of voters oppose the leading candidate, the candidate would be disqualified, and the NC would nominate new candidates. Given Hong Kong’s governance problems and increasing public polarization, the 20 percent veto ensures that no CE will be saddled with a substantial block of Hong Kong society affirmatively opposed to him or her from day one.

Albert Chen’s proposal received a tepid if supportive response in pro-Beijing quarters. Jasper Tsang, the Speaker of LegCo and member of the largest pro-establishment political party, and Rita Fan, a member of the NPCSC, affirmed their view that the none-of-these-candidates mechanism does not violate the Basic Law. While the government’s consultation document does not expressly mention the none-of-these-candidates concept, Hong Kong’s Justice Secretary indicated that the proposal should be considered. Starry Lee, another leader of the biggest pro-establishment party in LegCo, countered that technical difficulties and limited time for discussion would pose obstacles to the none-of-these-candidates ballot proposal.

Pan-democrats so far have tended to rebuff government overtures to engage on the topic. A few legislators, such as the Civic Party’s Ronny Tong, have been willing to engage (with Albert Chen on the Jan. 13 edition of The Pulse) but have reservations about what happens after a voided election, and feel that the threshold for public veto is too high. Law Chi-kwong, a founding member of Hong Kong’s Democratic Party and also a member of the HKU faculty, suggested that the winning candidate ought to receive an absolute majority of votes with blank votes counted. (E.g., when one candidate receives 45 percent, another receives 35 percent, and none-of-these-candidates receives 20 percent, that would lead to a void election.) However, other scholars associated with the Democratic Party have distanced themselves from the blank vote debate and Law’s statements.

The Merits of Blank Voting

The debate over blank and negative voting in Hong Kong unfolds in a global context where none-of-these-candidates has become an increasingly common political choice. Several democracies have institutionalized the practice. Proponents cite instrumental rationales, such as improved accountability and transparency. However, these benefits are not necessarily guaranteed. More broadly, people recognize the inherent value of the “no” vote as a form of political expression.

In the U.S. state of Nevada, for example, a none-of-these-candidates option has appeared on the ballot for all statewide and national elections since 1975. During the 2012 presidential cycle, the Secretary of State of Nevada argued that removing a none-of-these-candidates option would harm Nevada voters by taking away a “legitimate and meaningful ballot choice.” There is precedent for none-of-these-candidates winning a plurality of votes in a congressional primary; in that case, Republican Walden Earnhart finished behind the none-of-these-candidates option but still “won” the primary and got the nomination. More typically, the ballot option plays a “spoiler role.” In the 1998 Senate race, for example, 8,125 votes for none-of-these-candidates dwarfed the 395-vote margin between Harry Reid and John Ensign. This allowed Reid, the incumbent, to be re-elected.

It is hard to find examples where none-of-these-candidates has won a majority of the popular vote. Hong Kong’s pan-democrats may be right to question whether this possibility would meaningfully affect the calculus of the NC. Colombia is one of the few jurisdictions where blank votes can have institutional consequences. The right of citizens to cast a blank vote was established by the Colombian Constitution in 1991, and later codified in political reform statutes in 2003 and 2009. Similar to Albert Chen’s proposal in Hong Kong, if the number of blank votes equals a majority of the total number of votes cast, the election must be repeated. The original candidates cannot participate in the second election.

The Colombian experience suggests that the blank vote is more consequential in races with fewer candidates. Colombian voters have never nullified a slate of candidates at the national-level, where the field is crowded. In the city of Bello, however, the blank vote won the mayoral election in 2011. In that case, the electoral authority disqualified the one opposition candidate. This led to a one-man race and united all opposition forces around the blank vote in order to reject the establishment Conservative Party candidate. In the second round election, the replacement Conservative Party candidate (Carlos Alirio Muñoz López) won 59 percent of the vote. In the end, his party benefited with a resounding popular mandate. By this logic, the blank vote could matter in the two- to three-candidate race contemplated for Hong Kong.

Empirical evidence also suggests that local conditions in Hong Kong could support a relatively high turnout for none-of-these-candidates. Based on data from Spain and Italy, Chiara Superti at Harvard finds that blank voting is a sophisticated political choice, more likely to take place in municipalities with highly educated and politically engaged electorates. Hong Kong would qualify.

Beyond candidate selection, voting is a highly expressive act. A citizen’s vote is an expression of identity as well as a channel for protest. Echoing this view, the Supreme Court of India recently held that the country’s constitutional guarantees of freedom of speech and expression confer on Indian citizens a right to reject all candidates and to exercise their right to affirmatively vote for none-of-these-candidates in secrecy. As a people who define themselves by “core values,” including freedom of expression, this resonates with Hongkongers. More fundamentally, the ballot serves a powerful safety-valve function. At the time universal suffrage was introduced in England and France, the vote was presented as a way to channel political turmoil into more moderate political expression—and this, too, resonates in Hong Kong today.

Views expressed in the article are the author's personal views.

Boris Nemtsov’s murder may be a turning point in current Russian history. Unfortunately, it is almost surely not a turn to the better, but one to something bad or to something even worse. This point needs to be made clear from the beginning. It is an illusion to think that this event will lead to anything positive, such as a backlash in the population at large against nationalistic rhetoric or even some kind of liberal revolution, or “Russian Spring.” 

Liberalism in Russia was left near-dead once Putin prevailed over the wave of protests in late 2011 and early 2012. The geopolitical conflict with the West over Ukraine—both Russian President Vladimir Putin’s actions and the Western response of imposing sanctions—virtually guaranteed that liberal, democratic, pro-Western forces would remain irrelevant for now and, likely, for some years to come. Nemtsov’s murder only exacerbates this trend.

There are two probable scenarios going forward. Both begin with the realization that the most important conclusion from the Nemtsov murder is that it signals a lack of control by Putin over very dangerous elements in Russian society. Putin will respond by further tightening Kremlin control over Russian politics and society. The question is how forcefully and how successfully. In one scenario, Putin succeeds in stabilizing the political situation. This will result in an even more authoritarian, but somewhat stable, Russia. In the other, Putin fails to establish control and the result is a breakdown of all control and reversion to an even more extreme nationalism than now.

We do not know who murdered Boris Nemtsov. The most likely version is that it was rogue nationalist, anti-Maidan, forces. If so, this means that Putin has serious problems with his own security forces. They are either inexcusably negligent (because they allowed the murder to happen) or criminally complicit (if anyone inside the security forces in any way facilitated the crime).

Most everyone outside the Kremlin is obsessed with, as they say, the eternal Russian question of Kto vinovat—”Who is to blame?” Putin’s priorities are different. His first question is not, “Who did this?” but “Who let this happen?” So his primary concern is to solve the problem of the competence of and/or control over his security services.

Second, his main target now has to be extremist-nationalists inside Russia. They are the biggest threat to his regime, far greater than the demonstrators on Bolotnaya Square in 2011-2012. Despite the fact that it is the Kremlin itself that has been the biggest promoter of nationalism, it is aware that extreme nationalism is a danger. Last October, at the Valdai Club meeting in Sochi, Putin’s number two man, Sergey Ivanov, was asked about the threat of nationalist-extremists in Russia. He admitted there was a problem. “They do exist. They are a tiny minority. But they represent a clear risk. We need to think about that. And, especially, we need to do something about it. ... We have to make it clear to extremists that the law will be strictly enforced, and that committing illegal acts is a road that leads to nowhere.” And when we do act against those who violate the law, he said, “we will not be constrained by concerns about human rights.”

Event Information

The failed coup in Turkey on July 15 to 16, organized by factions within the Turkish military in an attempt to overthrow the government of President Erdoğan, represents both a victory and a new trial for Turkish democracy. Although the Turkish citizenry brought the country back from the brink of anarchy and civil war, many analysts see last week’s events as a consequence of the political instability and discord that has been mounting for years as Erdoğan has consolidated powers, marginalized the opposition, and redefined Turkey’s democracy. How will the president react in the aftermath of the coup? Will the democratic backsliding intensify, or can the thwarted coup offer new opportunity for reconciling the deeply-polarized nation?

The upheaval and political instability in Turkey also holds significant implications for Turkey’s foreign policy and the fate of a neighboring region already in turmoil from the war in Syria and insecurity in Iraq. The West desperately needs a stable, democratic, and predictable partner in its NATO-ally Turkey to address the many challenges besetting the region and to fight the Islamic State (or ISIS). How will recent events affect regional stability and Turkey’s cooperation with the West on security issues, including the resettlement of Syrian refugees? What does the failed coup mean for the coalition against ISIS engagement in Syria?

On July 20, the Foreign Policy program (FP) at Brookings hosted a panel discussion to consider these questions and other domestic and international consequences of the coup attempt in Turkey. Brookings Senior Fellow and Director of the Center on the United States and Europe Fiona Hill introduced and moderated a wide-ranging conversation featuring FP Senior Fellows Shadi Hamid, Kemal Kirişci, Michael O'Hanlon, and Ömer Taşpınar.

After the discussion, the speakers took questions from the audience.

Video

• Turkey coup attempt was a shock
• Institutional collapse of Turkey unprecedented
• Disaster averted in failed Turkey coup
• Incirlik Air Base not irreplaceable
• Turkey after the coup attempt: Implications for Turkish democracy, foreign policy, and the future of the Syrian War

Audio

• Turkey after the coup attempt: Implications for Turkish democracy, foreign policy, and the future of the Syrian War

Transcript

• Transcript (.pdf)

Event Materials

• 20160720_turkey_coup_transcript

Ruy Teixeira joins NPR's Talk of the Nation host Neal Conan to discuss the Pennsylvania primary and the working-class vote.

NEAL CONAN: With us here in Studio 3A is Ruy Teixeira, a visiting fellow at Brookings Institution, co-author of the report "The Decline of the White Working Class and the Rise of a Mass Upper Middle Class." He's kind enough to be with us here. Thanks very much for coming in, nice to see you again.

RUY TEIXEIRA: Great to be here.

NEAL CONAN: And, what are some of the common themes that we see around these working class voters that Sherry Linkon was talking to us about?

RUY TEIXEIRA: Well, I think Sherry touched on a number of them. I think one critical theme, obviously, for this election is their level of economic discontent and their sense that the economic ground has shifted underneath their feet, and they are sort of wondering where they are going to go in the future, where their kids are going to go, sort of, where their way of life is going to go.

This is a matter of great concern to these voters because the last, you know, actually the last several years, have not been kind to them. But more broadly, you can look back, you know, 35 years and say the last 35 years has not been very kind to them. This has been a period when America, by and large, has grown not as fast as it did and incomes have not risen as fast as they used to, but it's been particularly bad for these voters.

Anyone with less than a four-year college degree has really done rather poorly since about the middle 1970s. So, there's a real question in their minds of what America has in store for them in the future. And they are very interested to hear what politicians have to say about it. So far, it hasn't seemed to work out quite so well.

And the other side of it is really touched on by the controversy that you're referring to which is their sense of cultural traditionalism, their sense that, especially the Democrats, perhaps, seem out of touch with that at times. It seems like they don't respect their way of life. It seems like their social liberalism gets in the way of connecting to these voters and really hearing what they have to say and what their commitments and priorities really are and a sense of elitism on their part.

And that's really what, I think, Obama's getting slammed on this, you know, in general, and of course, obviously the McCain and Clinton campaigns have some interest in pushing this, but it did give them an opening to raise this issue and argue that, in fact, he is elitist. And Democrats, if they wish to get away from this, they have to adopt - I think it's a little bit unfair to the remark once you look at it in context.

But nevertheless, the perception was there particularly, I think the stuff about guns and about religion. I mean, can't you, like, own a gun and go to church and not be clinging to it? Because you know, your economic way of life is deteriorating. Again, I don't think that's what he meant. But that's how it's being interpreted. And that's where the discussion is.

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In last night’s Pennsylvania primary, Hillary Clinton won a sweeping if not quite overwhelming victory, receiving 55 percent of the vote and reducing Barack Obama’s overall popular vote edge by more than 200,000. Because of the Democratic party’s system of proportional representation, she netted fewer than 15 pledged delegates. These results have quieted calls for her to leave the race and will probably slow the steady flow of superdelegates to Obama. Nonetheless, her path to the nomination remains steep.

The demographics of the Pennsylvania vote followed a now-familiar pattern. Obama won among voters younger than 40, while Clinton prevailed among older voters. Obama won in big cities and some inner suburbs; Clinton carried suburbs overall while winning more than 60 percent of the small town and rural vote. Clinton did 9 points worse among men than among women, who constituted 59 percent of last night’s voters. She received 62 percent of the vote from gun-owning households and almost three-fifths of the vote from union households. Obama carried voters from families making less than $15,000 and more than $150,000; Clinton carried everyone in between. She received 64 percent of the vote from high school graduates but only 48 percent from college graduates. Obama won 55 percent of the vote among those who consider themselves “very liberal,” while Clinton got 60 percent of the vote among self-described moderates. Clinton took 56 percent among long-time Democrats, while Obama took 62 percent of new Democratic primary voters—principally Republicans and Independents who registered as Democrats to participate, but also the 4 percent of the primary electorate that previously been unregistered.

There is evidence that religion, gender and race all figured in the results. Clinton received 58 percent of the white Protestant vote and a stunning 71 percent of white Catholics. Obama got 64 percent of those who profess no religion and 56 percent of those who never attend church. Clinton did 22 points better among those who said gender was important than among those who did not. (Intriguingly, men who said it mattered were also more likely to support Clinton.) By contrast, race appears to have been a negative for Obama: whites who said it mattered gave 75 percent of their votes to Clinton, versus only 58 percent for those who said it did not. While nearly half the whites for whom race mattered refused to say that they would be willing to support Obama in the general election, their sentiments may well soften in coming months as differences between the parties come to the fore.

The long campaign mattered, and it left some bruises. 68 percent of the voters said that Clinton had attacked unfairly; 50 percent thought Obama had. Nearly a quarter of the electorate thought that Clinton was solely responsible for unfair attacks, versus only 6 percent who thought Obama was. Only 57 percent of the electorate thought that Clinton was honest and trustworthy, versus 67 percent for Obama. Only 40 percent said they would be satisfied if either candidate won; 32 percent wanted only Clinton, and 23 percent only Obama. But however negative the contest may have turned, it appears to have worked to Clinton’s advantage: she received 57 percent among voters who decided during the last week before the primary, 5 points better than she did among those who decided earlier.

The results also confirmed the surge in concern about the economy. Fifty-five percent of the voters regarded the economy as the top issue, versus only 27 percent for the war in Iraq and a modest 14 percent for health care. Obama prevailed only among voters who gave top priority to Iraq, while Clinton received 54 percent of the health care voters and 58 percent of the economy voters.

Attention now shifts to the May 6 primaries in North Carolina and Indiana. Obama is expected to prevail in North Carolina, but Indiana offers a level playing field. A split decision would be likely to prolong the race, while an Obama sweep might well induce many undecided superdelegates to declare for him and bring this protracted contest to an end. In addition, Obama’s fundraising edge is becoming increasingly important. Not long into her victory speech, Clinton made an urgent pitch for new contributions. Facing a mounting debt and dwindling cash on hand, her ability to continue on until the end of the primary and caucus season in early June may well depend on the size and speed of her supporters’ response.

An analysis of the growth and characteristics of the foreign-born in the Philadelphia metropolitan area between 1970 and 2006 finds:

• Among its peers, metropolitan Philadelphia has the largest and fastest growing immigrant population, which now stands at over 500,000, comprising 9 percent of the population. Between 2000 and 2006, greater Philadelphia’s immigrant population grew by 113,000, nearly as many as had arrived in the decade of the 1990s.
• Metropolitan Philadelphia has a diverse mix of immigrants and refugees from Asia (39 percent), Latin America and the Caribbean (28 percent), Europe (23 percent) and Africa (8 percent). The 10 largest source countries are India, Mexico, China, Vietnam, Korea, Italy, Ukraine, Philippines, Jamaica, and Germany.
• Immigrant growth in suburban Philadelphia has outpaced the city’s growth, but numerically, the city has the largest population of all local jurisdictions. Outside the city, Montgomery County had the earliest post- World War II suburban settlement of the foreign born and has the largest number of immigrants among jurisdictions, while Chester County saw the fastest growth during the 1970-2006 time period.
• Nearly 60 percent of the foreign-born living in metropolitan Philadelphia arrived in the United States after 1990. Although their naturalization rates and educational levels reflect their recentness of arrival, on the whole, greater Philadelphia’s immigrants are doing well on these measures as compared with some other U.S. metropolitan immigrant populations.
• Nearly 75 percent of greater Philadelphia’s labor force growth since 2000 is attributable to immigrants. Immigrants’ contributions to the labor force are considerably higher in this period than in the 1990s, when just 36 percent of the growth was due to immigrants.

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EXECUTIVE SUMMARY

A total of 80 currency boards have come into existence at some point since the mid-19th century, but to date only about 15 of them still exist, among which is the CFA franc monetary zone. The future sustainability of the CFA franc zone, to which the CEMAC CFA franc belongs, is increasingly questioned in the light of increasing asymmetries in exposure to external shocks, differential speeds of adjustment of the real exchange rate following shocks, differential impacts in economic fundamentals, and low levels of intra-regional trade and financial flows between CEMAC and WAEMU. For the CEMAC bloc of countries in particular, the future sustainability of the fixed exchange regime depends crucially on continued oil exports, which currently represent about 90 percent of export revenues and 40 percent of GDP. Should oil reserves deplete in the near future or oil prices decline significantly, a substantial source of foreign reserves would be lost, thereby exposing the regime to collapse. Even without resource depletion, continued volatility in global financial markets is increasing the risks of collapse of the fixed exchange regime as oil and commodity price swings ignite currency speculation as well as render reserves much more volatile. Against this backdrop, the present study examines the stakes facing the CEMAC CFA franc, discusses the exit options from the currency board and makes recommendations towards a sustainable monetary policy framework for CEMAC countries going forward. The analysis points to the imperative of pursuing a full monetary union with a single CEMAC franc pegged to the U.S. dollar and further suggests that, like the experience of the eurozone, the CEMAC monetary arrangement can be best implemented only by complying with the principle of political union.

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Editor’s Note: An interactive feature, highlighting the key findings from this report, can be found here.

Over a billion people worldwide live on less than $1.25 a day. But that number is falling. This has given credence to the idea that extreme poverty can be eliminated in a generation. A new study by Brookings researchers examines the prospects for ending extreme poverty by 2030 and the factors that will determine progress toward this goal. Below are some of the key findings:

1. We are at a unique point in history where there are more people in the world living right around the $1.25 mark than at any other income level. This implies that equitable growth in the developing world will result in more movement of people across the poverty line than across any other level.

2. Sustaining the trend rate of global poverty reduction requires that each year a new set of individuals is primed to cross the international poverty line. This will become increasingly difficult as some of the poorest of the poor struggle to make enough progress to approach the $1.25 threshold over the next twenty years.

3. The period from 1990 to 2030 resembles a relay race in which responsibility for leading the charge on global poverty reduction passes between China, India and sub-Saharan Africa. China has driven progress over the last twenty years, but with its poverty rate now down in the single digits, the baton is being passed to India. India has the capacity to deliver sustained progress on global poverty reduction over the next decade based on modest assumptions of equitable growth. Once India’s poverty is largely exhausted, it will be up to sub-Saharan Africa to run the final relay leg and bring the baton home. This poses a significant challenge as most of Africa’s poor people start a long way behind the poverty line.

4. As global poverty approaches zero, it becomes increasingly concentrated in countries where the record of and prospects for poverty reduction are weakest. Today, a third of the world’s poor live in fragile states but this share could rise to half in 2018 and nearly two-thirds in 2030.

5. The World Bank has recently set a goal to reduce extreme poverty around the world to under 3 percent by 2030. It is unlikely that this goal can be achieved by stronger than expected growth across the developing world, or greater income equality within each developing country, alone. Both factors are needed simultaneously.

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INTRODUCTION

If you are one of those government officials, finance experts, development professionals or NGO members whose eyes glaze over when you see an article on procurement, you are the audience I want to address. Procurement is the purchase of works, goods and services by individuals or firms, or government entities in the case of public procurement. We all make procurement decisions in our everyday lives. We pride ourselves on making good decisions and being able to apply discretion and judgment. Now imagine if you were improving your home and were constrained by pages and pages of legal and technical regulations that take away that discretion. You would soon question whether those regulations were relevant and whether they provide any value or simply delayed and jeopardized good decision-making. Worse yet, imagine if you had to follow rules that someone else outside your family, your community or your country set for you. While public procurement requires a higher standard of governance than personal procurement, developing countries and other stakeholders are raising these questions regarding the policies set by multilateral aid institutions.

In November 2013, the World Bank released the report of its first stage efforts in reforming its procurement policy as it relates to the projects it finances. As the World Bank enters the second stage in designing the actual reforms, the “development community” faces a crucial moment and opportunity to refine and reform a fundamental instrument in the development toolbox—one that has been treated for too long as a “plumbing and wiring” issue that ignores the broader public policy implications and the growing burden of conflicting objectives, regulations, incentives and political polemics. The purpose of this paper is to examine concerns regarding reform of multilateral agencies’ public procurement policies, enhance awareness of what is at stake and lay the groundwork for the reform discussions at development institutions that will take place over the next year.

I should alert you, however, that I am neither a procurement specialist, nor am I a lawyer or an engineer. I would describe myself as a development practitioner. After decades of working on infrastructure projects and on multilateral operational policy, I have maintained a deep respect for my procurement colleagues who have protected my proverbial “backside.” One quickly learns in this business that a mistake in procurement can result in serious consequences as one sits in the middle of the converging, and often conflicting, interests of governments, donors, private sector and, of course, affected communities. The procurement policies applied by the multilateral finance institutions have been responsible for enhancing competition, deepening transparency and raising the integrity of investment in developing countries, as well as opening markets for developed and developing countries’ businesses. As the world of public procurement has evolved, however, one also learns that procurement is becoming more than just getting the “plumbing and wiring” right. Indeed, the role and application of public procurement policies and practices is an essential element of design and implementation with crucial consequences for the quality of outcomes. The case set forth in this paper lays out the factors driving the need for major reform of multilateral banks’ procurement policies—rather than simply adapting existing policies. This paper also presents the major challenges to be addressed in designing the reforms and the tensions to be resolved or balanced as the World Bank enters the more detailed design stage of its reform effort.

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It has been nearly three years since the New Deal for Engagement in Fragile States (“the New Deal”) was endorsed at the Fourth High-Level Forum on Aid Effectiveness in Busan in 2011. Given the minimal progress of fragile states in achieving the Millennium Development Goals1 (MDGs) and that conflict and fragility are part of the deliberations on the post-2015 global development agenda, it is appropriate to assess New Deal implementation to date and see what early lessons can be learned. This review is intended to provide insights on current efforts and provoke thought and discussion on how implementation could be improved.

Since the New Deal was endorsed in Busan, a group of fragile states known as the g7+ has emerged to champion support for fragile states. The group started in 2010 with seven members but by May, 2014, its membership spanned 20 countries from four continents. The g7+ represents the first time a genuine constituency of fragile states has begun to engage with one other and with the international community about the causes of fragility and how to address it. Despite the modest progress that has been made and the enthusiasm of New Deal focal points among donors, civil society, and g7+ pilot countries, implementation of the New Deal to date is characterized by unmet conditions, unrealistic expectations about timeframes, and a lack of sustained dialogue about the causes of conflict and fragility. Overall, the Peacebuilding and Statebuilding Goals (PSGs) are being adopted into national development plans (Figure 1), but donors and civil society have concerns about the g7+ pilot countries’ commitment to use these goals as the basis for an inclusive and sustained dialogue about the causes of conflict and fragility. Conversely, although some elements of the TRUST component (Figure 1) are being implemented, g7+ pilot country governments have concerns about donors’ commitments to share risk and increase the use of country systems. Progress has been made in the implementation of the FOCUS elements (Figure 1), in terms of the number of fragility assessments conducted and compacts or mutual accountability frameworks established, but concern exists at the global level that there has been an overemphasis on the technical exercises and insufficient effort put toward political dialogue at the country level. The effort put into technical processes should not overshadow sustained political dialogue, and the tendency to rely on conditionality as the basis for New Deal partnership should be consciously avoided.

Greater investment should be made in rolling out the New Deal to reduce the amount of confusion surrounding it at the country level. This would perhaps best be accomplished by building the capacity within the different stakeholder groups, and especially by bolstering dedicated staffing for the New Deal. Donors and the g7+ should increase their domestic advocacy and educate stakeholders about the expectations inherent to New Deal participation, the potential risk-benefit tradeoffs, and the underlying assumptions about their willingness to do things differently. A combination of fewer conditions, increased investment, more inclusive political dialogue, and better domestic advocacy could render the New Deal a transformative approach to addressing the challenges and opportunities that exist in fragile and conflict-affected states.

This paper is an independent assessment of New Deal implementation. It is based on a review of New Deal documentation and interviews with focal points in g7+ pilot countries, lead donor agencies, and civil society. The interviews were conducted during April, May, and June 2014. This review focuses on the original seven pilot countries that volunteered to implement the New Deal: Afghanistan, the Central African Republic, the Democratic Republic of Congo (DRC), Liberia, South Sudan, Sierra Leone and Timor Leste. The review also includes Somalia, given that a compact was developed there in 2013.

Strong Growth and Changing Composition 

External financial flows to sub-Saharan Africa (defined as the sum of gross private capital flows, official development assistance (ODA), and remittances to the region) have not only grown rapidly since 1990, but their composition has also changed significantly. The volume of external flows to the region increased from $20 billion in 1990 to above $120 billion in 2012. Most of this increase in external flows to sub-Saharan Africa can be attributed to the increase in private capital flows and the growth of remittances, especially since 2005 (see Figure 1).

Figure 1. Sub-Saharan Africa: External Flows (1990-2012, in USD billions)

As also displayed in Figure 1, in 1990 the composition of external flows to sub-Saharan Africa was about 62 percent ODA, 31 percent gross inflows from the private sector, and about 7 percent remittances. However, by 2012, ODA accounted for about 22 percent of external flows to Africa, a share comparable to that of remittances (24 percent) and less than half the share of gross private capital flows (54 percent). Also notably, in 1990, FDI flows were greater than ODA flows in only two countries (Liberia and Nigeria) in sub-Saharan Africa excluding South Africa, but 22 years later, 17 countries received more FDI than ODA in 2012—suggesting that sub-Saharan African countries are increasingly becoming less aid dependent (see Figure 2).

Figure 2. Sub-Saharan Africa: Number of Countries Where FDI is Greater than ODA (1990-2012)

But to what extent have these changes in the scale and composition of external flows to sub-Saharan Africa equally benefited countries in the region? Did the rising tide lift all boats? Is aid really dying? Are all countries attracting private capital flows and benefiting from remittances to the same degree? Finally, how does external finance compare with domestic finance? 

The False Demise of ODA

A closer look at the data indicates that, clearly, ODA is not dead, though its role is changing. For instance, middle-income countries (MICs) are experiencing the sharpest decline in ODA as a share of total external flows to the region, while aid flows account for more than half of external flows in fragile as well as low-income countries (LICs) and resource-poor landlocked countries (see Figure 3 and Appendix).

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In December over 190 countries will converge in Paris to finalize a new global agreement on climate change that is scheduled to come into force in 2020. A central part of it will be countries’ national pledges, or “intended nationally determined contributions” (INDCs), to be submitted this year which will serve as countries’ national climate change action plans. For Latin American countries, the INDCs present an unprecedented opportunity. They can be used as a strategic tool to set countries or at least some sectors on a cleaner path toward low-carbon sustainable development, while building resilience to climate impacts. The manner in which governments define their plans will determine the level of political buy-in from civil society and business. The implementation of ambitious contributions is more likely if constituencies consider them beneficial, credible, and legitimate.

This paper aims to better understand the link between Latin American countries’ proposed climate actions before 2020 and their post-2020 targets under a Paris agreement. We look at why Latin American climate policies and pledges merit attention, and review how Latin American nations are preparing their INDCs. We then examine the context in which five Latin American nations (Mexico, Brazil, Peru, Costa Rica, and Venezuela) are developing their INDCs—what pledges and efforts have already been made and what this context tells us about the likely success of the INDCs. In doing so, we focus on flagship national policies in the areas of energy, forests, cities, and transportation. We address what factors are likely to increase or restrain efforts on climate policy in the region this decade and the next.

Latin American countries are playing an active role at the U.N. climate change talks and some are taking steps to reduce their emissions as part of their pre-2020 voluntary pledges.

Latin American countries are playing an active role at the U.N. climate change talks and some are taking steps to reduce their emissions as part of their pre-2020 voluntary pledges. However, despite some progress there are worrying examples suggesting that some countries’ climate policies are not being implemented effectively, or are being undermined by other policies. Whether their climate policies are successful or not will have significant consequences on the likely trajectory of the INDCs and their outcomes. The imperative for climate action is not only based on Latin America’s contribution to global carbon emissions. Rather, a focus on adaptation, increasing the deployment of renewable energy and construction of sustainable transport, reducing fossil fuel subsidies, and protecting biodiversity is essential to build prosperity for all Latin Americans to achieve a more sustainable and resilient development.

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The Central African Republic (CAR), a landlocked country roughly the size of Texas, has endured a nearly constant state of political crisis since its independence from France in 1960. In fact, in the post-colonial era, the CAR has experienced only 10 years of rule under a democratically elected leader, Ange-Félix Patassé, from 1993 to 2003. Four of the CAR’s past five presidents have been removed from power through unconstitutional means, and each of these transitions has been marred by political instability and violence. Fragile attempts to build democratic political institutions and establish the rule of law have been undermined by coups, mutinies, and further lawlessness, making cycles of violence tragically the norm in the CAR.

The country’s current crisis (2012–present) stems from political tensions and competition for power between the predominantly Muslim Séléka rebel coalition and the government of President Francois Bozizé, as well as unresolved grievances from the CAR’s last conflict (2006–2007). Since the Séléka’s overthrow of the government in March 2013 and concurrent occupation of large areas of the country, the conflict has evolved to encompass an ethno-religious dimension: So-called Christian defense militias named the anti-balaka emerged to counter the Séléka alliance, but in effect sought revenge against the CAR’s Muslim minority (about 15 percent of the population), including civilians. During a March 2014 trip to the Central African Republic, United Nations High Commissioner for Human Rights Navi Pillay remarked that “the inter-communal hatred remains at a terrifying level,” as reports of atrocities and pre-genocidal indicators continued to surface. Even today, horrific crimes against civilians are still being committed at a frightening frequency in one of the poorest countries in the world: The CAR has a per capita GNI of $588 and a ranking of 185 out of 187 on 2013’s United Nations Human Development Index.

Amid the escalating insecurity in 2013, African Union (AU), French, and European forces were deployed under the auspices of the African-led International Support Mission in Central Africa (MISCA) to disarm militant groups and protect civilians at a critical juncture in December, and their efforts contributed to the relative stabilization of the capital in early 2014. Meanwhile, in January 2014, Séléka leaders relinquished power to a transitional government led by former mayor of Bangui, Catherine Samba-Panza, who was then tasked with preparing for national elections and establishing security throughout the country. In September 2014, the United Nations incorporated the MISCA forces into the larger Multidimensional Integrated Stabilization Mission in the Central African Republic (MINUSCA) and then in 2015 extended and reinforced its presence through 2016, in response to the ongoing violence. Despite the international military intervention and efforts of the transitional authorities to address the pervasive insecurity, reprisal killings continue and mobile armed groups still freely attack particularly remote, rural areas in the central and western regions of the country. The unguarded, porous borders have also allowed rebel forces and criminal elements to flee into distant areas of neighboring countries, including Chad and South Sudan, in order to prepare their attacks and return to the CAR.

This paper will explore the origins of the complex emergency affecting the CAR, with a particular focus on the economic causes and potential economic strategies for its resolution. It will begin by providing an overview of the core issues at stake and enumerating the driving and sustaining factors perpetuating the violence. Then it will discuss the consequences of the conflict on the humanitarian, security, political, and economic landscape of the CAR. Finally, it will highlight strategies for addressing the underlying issues and persisting tensions in the CAR to begin building a durable peace, arguing that the national authorities and international partners adopt a holistic approach to peace building that prioritizes inclusive economic recovery given the economic roots of the crisis.

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The eighth and final Strategic and Economic Dialogue (S&ED) of the Obama administration will take place in Beijing next week. On the economic side, it will be difficult this year to make progress on specific outcomes; but it’s an important year for having a frank conversation about macroeconomic and financial policies.

One reason that it will be hard to get specific outcomes is that the Chinese leadership has shown that economic reform doesn’t rank very high on its list of priorities. After laying out an ambitious reform agenda in its Third Plenum resolution in 2013, implementation of reform has been slow, except in some aspects of financial reform. Recent speeches have emphasized the need to close zombie firms and clean up non-performing loans in the banking system, but specific plans have been modest. 

In terms of the agenda between China and the United States, the most important issue is negotiating a Bilateral Investment Treaty (BIT). Many important sectors are still closed to inward direct investment in China. It would help China’s transition to a new growth model to open up these sectors to competition and to private investment, and a BIT is a smart way to commit to these reforms. However, China has been slow to produce a credible offer on the BIT because enterprises and ministries with vested interests have opposed opening up and the leadership is apparently not willing to take them on.

Another factor affecting this S&ED is that it is the last for the Obama administration. I would argue that this is a good time for China and the United States to demonstrate that regular, high-level exchange produces results, increasing the likelihood that whatever administration comes next will want to maintain something similar. However, it is more likely that Chinese leaders will want to wait and see what administration they will be dealing with and to save deliverables for those future negotiations.

S&ED is an opportunity for the top economic officials in the two countries to frankly discuss their policy choices and to avoid mistakes that can come from miscommunication.

My experience with the first four S&EDs was that the conversation was more important than the deliverables, which have often been modest, incremental steps. This year, China will be very interested in hearing what the Federal Reserve thinks. May labor market data will be published on June 3, just in advance of the S&ED, so there may be more clarity about when the Fed is likely to raise interest rates. Regardless of when the Fed moves, both China and the United States have an interest in seeing a relatively stable exchange rate for the yuan. China’s central bank officials have emphasized that the country still has a large current account surplus, so depreciation of the trade-weighted exchange rate is not warranted. Depreciation would exacerbate imbalances and would work against the transformation of China’s growth model because it favors industry at the expense of services. 

But if the Fed continues to normalize interest rates and the dollar rises against other major currencies, China does not want to follow the dollar up. Hence, its emphasis on stable value of the currency relative to a basket. S&ED is an opportunity for the top economic officials in the two countries to frankly discuss their policy choices and to avoid mistakes that can come from miscommunication. The most important outcome of the S&ED may well be avoidance of policy mistakes, a subtle outcome that will not be reflected in headlines. 

Since 2000, China has emerged as Africa’s largest trading partner and a major source of investment finance as well. Large numbers of Chinese workers and entrepreneurs have moved to Africa in recent years, with estimates running as high as one million. China’s engagement with Africa has no doubt led to faster growth and poverty reduction on the continent. It is also relatively popular: In attitude surveys, 70 percent of African respondents have a positive view of China, higher than percentages in Asia, the Americas, or Europe.

While China’s deepening engagement with Africa has largely been associated with better economic performance, its involvement is not without controversy. This is particularly true in the West, as typical headlines portray an exploitive relationship: “Into Africa: China’s Wild Rush,” “China in Africa: Investment or Exploitation?,” and “Clinton warns against ‘new colonialism’ in Africa.” 

My forthcoming study, "China’s Engagement with Africa: From Natural Resources to Human Resources," aims to objectively assess this important new development in the world. It has six main findings:

1. First, on the scale of China’s activities in Africa: The media often portrays China’s involvement as enormous, potentially overwhelming the continent. According to data from China’s Ministry of Commerce (MOFCOM), the stock of Chinese direct investment in Africa was $32 billion at the end of 2014. This represents less than 5 percent of the total stock of foreign investment on the continent. Stocks naturally change slowly. But the "World Investment Report 2015" similarly finds that China’s share of inward direct investment flows to Africa during 2013 and 2014 was only 4.4 percent of the total. Of course, direct investment is not the only form of foreign financing. The Export-Import Bank of China and China Development Bank have also made large loans in Africa, mostly to fund infrastructure projects. In recent years, China has provided about one-sixth of the external infrastructure financing for Africa. In short, Chinese financing is substantial enough to contribute meaningfully to African investment and growth, but the notion that China has provided an overwhelming amount of finance and is buying up the whole continent is inaccurate.

2. The second main finding from the study concerns China’s direct investment and governance. China has drawn attention by making large resource-related investments in countries with poor governance indicators, such as the Democratic Republic of Congo, Angola, and Sudan. These deals are certainly part of the picture when it comes to China’s engagement with Africa. But the more general relationship between Chinese direct investment and recipients’ governance environments is different. After controlling for market size and natural resource wealth, total foreign direct investment is highly correlated with measures of property rights and rule of law, as one might expect. This is true both globally and within the African continent. China’s outward direct investment, on the other hand, is uncorrelated with measures of property rights and the rule of law after controlling for market size and natural resource wealth. In this sense, Chinese investment is indifferent to the governance environment in a particular country. While China has investments in the Democratic Republic of Congo, Angola, and Sudan, those are balanced by investments in African countries that have relatively good governance environments. South Africa, for instance, is the foremost recipient of Chinese investment. Furthermore, some of the big resource deals in poor governance environments are not working out well, so Chinese state enterprises may well rethink their approach in the future.

3. A third main finding emerges from examining MOFCOM’s registry of Chinese firms investing in Africa. In the aggregate data on Chinese investment in different countries, the big state enterprise deals naturally play an outsized role. MOFCOM’s database on Chinese firms investing in Africa, on the other hand, provides a snapshot of what small- and medium-sized Chinese firms—most of which are private—are doing in Africa. Unlike the big state-owned enterprise investments, these firms are not focused on natural resource extraction. The largest area for investment is service sectors, with significant investment in manufacturing as well. Many African economies welcome this Chinese investment in manufacturing and services.

4. The fourth finding relates to infrastructure finance. In recent years infrastructure financing has expanded and helped many African countries begin to rectify infrastructure deficiencies. Africa has been receiving about $30 billion per year in external finance for infrastructure, of which China provides one-sixth. Chinese financing is a useful complement to other sources, particularly as traditional finance from multilateral development banks and bilateral donors is concentrated on water supply and sanitation. Likewise, private participation in infrastructure is primarily aimed at telecommunications. China has filled a niche by focusing on transportation and power.

   Chinese financing of infrastructure has also enabled Chinese construction companies to gain a firm foothold on the continent. Evidence suggests that Chinese companies have become highly competitive, crowding out African construction companies. This is an area where a trade-off seems to exist between, on the one hand, getting projects completed quickly and cheaply and, on the other, facilitating the long-term development of a local construction industry.

5. This point leads to the fifth finding of the study. There are a lot of Chinese workers in Africa; the total is disproportionately high when compared to the amount of financing that China has provided and compared to migrants from other continents. This is a tentative conclusion because the data on this issue are particular weak. But estimates of Chinese migrants in Africa exceed one million. Many migrants initially move to Africa as workers on Chinese projects in infrastructure and mining and then, perceiving good economic opportunities, stay on. Similar to the dilemma confronting the continent’s construction industry, African countries face a tradeoff here: Chinese workers bring skills and entrepreneurship, but their large numbers limit African workers’ opportunities for jobs and training. The popular notion that Chinese companies only employ Chinese workers is not accurate, but the overall number of Chinese workers in Africa is large. Africa may want to take a page from China’s playbook and limit the ability of foreign investors to bring in workers, forcing them to train local labor instead.

The popular notion that Chinese companies only employ Chinese workers is not accurate, but the overall number of Chinese workers in Africa is large.

6. A final important finding of the study is that the foundation for the Africa-China economic relationship is shifting. China’s involvement in Africa stretches back decades, but the economic relationship accelerated after 2000, when China’s growth model became especially resource-intensive. It made sense for resource-poor China to import natural resources from Africa and to export manufactures in return.

These patterns of trade and investment are now likely to gradually shift in response to changing demographics. The working-age population in China has peaked and will shrink over the coming decades. This has contributed to a tightening of the labor market and an increase in wages, which benefits Chinese people. Household income and consumption are also rising. Compared to past trends, China’s changing pattern of growth is less resource-intensive, so China’s needs for energy and minerals are relatively muted. At the same time, China is likely to be a steady supplier of foreign investment to other countries, and part of that will involve moving manufacturing value chains to lower-wage locations.

Africa’s demographics are moving in the opposite direction. In fact, they resemble China’s at the beginning of its economic reform 35 years ago. About half of Africa’s population is below the age of 20, which means the working-age population will surge over the next 20 years, and will probably continue growing until the middle of the century or later. Roughly speaking, Africa needs to create about 20 million jobs per year to employ its expanding workforce. Twenty years from now, it will need to create 30 million jobs per year. Africa’s demographics present both an opportunity and a challenge. It is unrealistic to expect the China-Africa economic relationship to change overnight. Nor would it be reasonable to expect large volumes of Chinese manufacturing to move to the continent in the near future; it would be more natural for value chains to migrate from China to nearby locations such as Vietnam and Bangladesh. But if even small amounts of manufacturing shift, this could make a significant difference for African economies, which are starting out with an extremely low base of industrialization. And it is useful to have a long-term vision that an economic relationship that started out very much centered on natural resources should shift over time to a greater focus on human resources.

For more on China’s engagement in Africa, check out the Brookings event hosted by the John L. Thornton China Center and the Africa Growth Initiative this Wednesday, July 13, at 3:30pm. 

Throughout the 2000s, Chinese demand for primary goods like oil, iron, copper, and zinc helped Africa reduce poverty more than it had in decades. Even so, China’s total investment in the continent’s natural resources has been smaller than many imagine, and, with growth moving away from manufacturing and toward consumption, China’s appetite for raw materials will continue to diminish. China’s shifting economic growth model aligns with Sub-Saharan Africa’s imminent labor force boom, presenting a significant opportunity for both sides. Maximizing mutual gain will depend on China and Africa cooperating to address a host of challenges: Can African countries limit the flow of Chinese migrants and foster domestic industries? Will Chinese investors adopt global norms of social and environmental responsibility? Where does the West fit in?

This study aims to objectively assess China’s economic engagement on the African continent, the extent to which African economies are benefiting, prospects for the future, and ways to make this relationship more productive. David Dollar marshals evidence about the scale of trade, investment, infrastructure cooperation, and migration between China and Africa, all of which are relatively recent phenomena. In addition, Dollar addresses the question of whether and how China’s involvement differs from that of Africa’s other economic partners. The concluding chapter provides some tentative recommendations for African countries, China, and the West.

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• China's engagement with Africa: From natural resources to human resources

Premier Li Keqiang's government work report was a pragmatic and concrete one, pointing out challenges as well as strengths and opportunities, according to a US-based China scholar.

The report, delivered by Premier Li at the opening of the fourth session of the 12th National People's Congress (NPC) on Saturday, is now being deliberated by some 3,000 deputies.

Cheng Li, director of the John L. Thornton China Center of the Brookings Institution, said the report tells people that the Chinese economy is facing difficulties as a result of structural reforms, the need for better environmental protection and the impact of a sluggish global economy.

"It tells the public that such economic challenges will last for a period of time, so the report does not give the public an unachievable expectation," Cheng Li said.

Meanwhile, the report has also elaborated on China's strength, such as the potential to be unleashed in urbanization, the development of the service sector, the employment policy and the innovation policy, according to Cheng Li.

"So this is a report that neither gives the public too high an expectation nor disappointment," said Cheng Li, whose research has focused on the transformation of Chinese leaders and technological development in China.

Cheng Li believes that this is especially important during the coming two years, or the beginning years of the 13th Five-Year Plan (2016-2020), when there won't be excessive high economic growth rate, something he said China also does not need.

In the work report, China's gross domestic product (GDP) growth in 2016 has been set between 6.5 percent and 7 percent. It is the first time since 1995 for the target to be in a range rather than one single number.

China's economy grew by 6.9 percent in 2015, the lowest in a quarter of a century, but it was still among the highest in the world.

According to the report, an average annual growth of at least 6.5 percent should be maintained in the coming five years in order to achieve the goals of doubling GDP and household income by 2020 from the 2010 levels.

It also says that by 2020, the contribution from scientific and technological advances should account for 60 percent of GDP growth.

Cheng Li said structural reforms will bring a lot of challenges, all of which would require dealing with by the Chinese government.

He described the goals in the work report as very specific. "There isn't much empty content and slogan type of things," he said.

"It is what the Chinese public wants to see... and it's a relatively balanced and good report, one quite pertinent to China's situation today," Cheng Li said.

He hoped that the report had emphasized more that many of the challenges are also opportunities. "It is just the beginning and the potential is huge," he said, citing how areas such as environmental protection could help job creation and business opportunities.

To Cheng Li, the potential opportunities will help small- and medium-sized companies, large companies, Chinese companies overseas and foreign-funded companies in China break new ground.

Cheng Li said the growth targets set in the 13th Five-Year Plan are quite reasonable. "More than 90 percent of what's in the 12th Five-Year Plan (2011-2015) had been achieved, and there is a better reason to achieve what's in the 13th Five-Year Plan," he said.

This piece was originally published by China Daily.

On March 5, Chinese President Xi Jinping spoke to the Shanghai delegates to the National People’s Congress (NPC) session in Beijing. China’s top leaders use these side meetings to convey policy guidance on a range of issues, and Xi used this particular one to offer his perspective on relations with Taiwan. There has been some nervousness in the wake of the January 16 elections, which swept the opposition Democratic Progressive Party (DPP) to power in both the executive and legislative branches. Because the Beijing government has always suspected that the fundamental objective of the DPP is to permanently separate Taiwan from China, observers were waiting expectantly to hear what Xi would have to say about Taiwan.

Well before the March 5 speech, of course, Xi’s subordinates responsible for Taiwan policy had already laid out what Taiwan President-elect Tsai Ing-wen and her party would have to do to prevent cross-Strait relations from deteriorating, and they continued to emphasize those conditions after Xi’s speech. But analysts believed that Xi’s own formulation would be the clearest indicator of Beijing’s policy. He is, after all, China’s paramount leader, and his words carry a far greater weight than those of other Chinese officials.

This is what Xi said to the Shanghai NPC delegation about Taiwan [translation by the author, emphasis added]:

Compatriots on the two sides of the Strait are blood brothers who share a common destiny, and are people for whom blood is thicker than water…Our policy towards Taiwan is correct and consistent, and will not change because of a change in [who heads] the Taiwan authorities. We will insist upon the political foundation of the “1992 consensus,” and continue to advance cross-Strait relations and peaceful development…If the historical fact of the “1992 consensus” is recognized and if its core connotation is acknowledged, then the two sides of the Strait will have a common political basis and positive interaction [virtuous circle] can be preserved. We will steadily push forward cross-Strait dialogue and cooperation in various fields, deepen cross-Strait economic, social, and financial development, and increase the familial attachment and welfare of compatriots [on both sides], close their spiritual gap, and strengthen their recognition that they share a common destiny. We will resolutely contain the separatist path of any form of Taiwan independence, protect state sovereignty and territorial integrity, and absolutely not allow a repetition of the historical tragedy of national separation. This is the common wish and firm intention of all Chinese sons and daughters, and is also our solemn pledge and obligation to history and to the people. The fruits of cross-Strait relations and peaceful development require the common support of compatriots on the two sides; creating a common and happy future requires the common effort of compatriots on the two sides; and realizing the great revival of the Chinese nation requires that compatriots on the two sides join hands to work with one heart.

The italicized sentences are key: They state what the new DPP government should do if it wishes to maintain healthy cross-Strait relations and affirms Beijing’s resolve to oppose any behavior it doesn’t like. Xi didn’t threaten specific actions, but he probably didn’t have to. As always, Beijing reserves the right to decide what DPP attitudes and actions constitute separatism and a quest for Taiwan independence. 

Xi didn’t threaten specific actions, but he probably didn’t have to.

Some background

There are two important points of reference contextualizing this statement from Xi. 

Xi on November 7, 2015. First, there are his reported remarks on the future of cross-Strait relations during his unprecedented meeting with current Taiwan president Ma Ying-jeou in Singapore last November 7. At that time, Xi first appealed to ethnic solidarity and national unity, as he did again on March 5. He asserted that the stakes to end the state of division between Mainland China and Taiwan were very high because it was a critical part of how he views rejuvenating the Chinese nation—a theme he repeated to the Shanghai delegation. 

Xi said Taiwan, under the new government, could either continue to follow the path it has walked for the last seven-plus years under the current Ma Ying-jeou administration (“peaceful development”), or it could take the path of renewed “confrontation,” “separation,” and zero-sum hostility. If Taiwan wished to follow the first path, Xi insisted, its leaders must adhere to the 1992 consensus and oppose “Taiwan independence.” Without this “magic compass that calms the sea,” Xi warned, “the ship of peaceful development will meet with great waves and even suffer total loss.” He was willing to overlook the DPP’s past positions and actions, but only if it identified with “the core connotation of the 1992 consensus” (a reference to the PRC view that the Mainland and Taiwan are both within the territorial scope of China, a view the DPP contests). Xi alluded to the “core connotation” on March 5 but did not re-state its content. Xi then made clear that if “disaster” occurred, it would be the DPP’s fault—it was therefore up to Tsai, he implied, to accommodate to Beijing’s conditions. 

In language and tone, Xi’s Singapore statement was far more strident and alarmist than what he said on March 5. He made that first statement more than two months before the election, when perhaps he thought that tough talk would weaken Tsai’s and the DPP’s appeal to voters. If that was his objective, he failed. The tone of his March 5 remarks was more modulated, but the substance was the same. Beijing would define the crossroads that Taiwan faced, and it was up to Tsai to take the right path—at least what it defined the right path.

Beijing would define the crossroads that Taiwan faced, and it was up to Tsai to take the right path—at least what it defined the right path.

Tsai on January 21, 2016. Second, there is an interview that Tsai gave to Liberty Times (Tzu-yu Shih Pao) on January 21—less than a week after the elections—in which she sought to meet Beijing partway. For the first time, she used the phrase “political foundation” and said it had four elements: 

• “The first is that the SEF-ARATS discussions of 1992 are a historical fact and both sides had a common acknowledgment to set aside differences and seek common ground;” 
• “The second is the Republic of China’s current constitutional order.”
• “The third is the accumulated results of the more than 20 years of cross-strait negotiations, exchanges, and interactions;” and
• “The fourth is Taiwan’s democratic principles and the will of the Taiwanese people to make sure that Taiwan voters understood the limits to his tolerance.”

So, Tsai accepts the 1992 meetings as a historical fact and acknowledges that the two sides did reach an agreement of sorts, but does not accept the 1992 consensus itself as a historical fact. She spoke more about process than content. The Republic of China’s “current constitutional order” is also part of the foundation, which some have read as Tsai’s acceptance that the Mainland and Taiwan are both parts of China’s territory (Beijing’s “core connotation”)—I, however, am not so sure. Tsai did not reject Xi’s requirements out of hand, but she framed them in her own way. 

So are ties growing friendlier?

Was Xi’s tonal moderation on March 5—relative to November 7—an indicator that mutual accommodation was going on? Perhaps. But the fact that the November meeting was ostensibly private while the March speech was public might explain the difference. 

Moreover, the stream of Chinese articles and statements since March 5 that explicitly restate Beijing’s long-standing preconditions are reason to doubt that much accommodation is actually occurring. The three basic scenarios I outlined last December—accommodation, limited Chinese punishment of the Tsai administration, and comprehensive punishment—are still in play, and the key variable remains whether Xi and his subordinates trust Tsai Ing-wen’s basic intentions. That is, will they accept her recent formulations as a good-faith effort to avoid deterioration? The next milestone will be May 20, when Tsai Ing-wen gives her inaugural address and may provide a more detailed formulation of her approach to China.