INTRODUCTION

Over the past decade, the focused attention of African nations, the United States, U.N. agencies and other multilateral partners has brought significant progress toward achievement of the Millennium Development Goals (MDGs) in health and malaria control and elimination. The potential contribution of these strategies to long-term peace-building objectives and overall regional prosperity is of paramount significance in sub-regions such as the Horn of Africa and Western Africa that are facing the challenges of malaria and other health crises compounded by identity-based conflicts.

National campaigns to address health Millennium Development Goals through cross-ethnic campaigns tackling basic hygiene and malaria have proven effective in reducing child infant mortality while also contributing to comprehensive efforts to overcome health disparities and achieve higher levels of societal well-being.

There is also growing if nascent research to suggest that health and other humanitarian interventions can result in additional benefits to both recipients and donors alike.

The social, economic and political fault lines of conflicts, according to a new study, are most pronounced in Africa within nations (as opposed to international conflicts). Addressing issues of disparate resource allocations in areas such as health could be a primary factor in mitigating such intra-national conflicts. However, to date there has been insufficient research on and policy attention to the potential for wedding proven life-saving health solutions such as malaria intervention to conflict mitigation or other non-health benefits.

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In July 2013, the World Bank decided to phase-out lending for new coal-fired power plants in middle-income countries, except in rare circumstances where no financially feasible alternatives to coal exist. This decision was made for a combination of reasons including concerns about local air pollution and global climate change, as well as evidence that these projects have little trouble attracting private capital without World Bank involvement. Now, policymakers are considering whether the World Bank’s policy should also cover projects designed to retrofit existing coal-fired power plants in middle-income countries by adding scrubbers and other technologies that increase efficiency and reduce air pollution. 

There are several fundamental questions underlying this debate: Is financing coal power plant retrofits a good use of World Bank resources? If so, should the World Bank insist on the use of best available technologies when it finances these retrofits? These questions are vitally important, as retrofit technologies are designed to minimize toxic air pollutants, including soot and smog, which are both dangerous for human health and the world’s climate. Older coal plants without retrofit technologies are less efficient, and emit more pollutants per unit of coal burned than those with retrofits applied. Evidence shows that soot and smog can cause respiratory illness and asthma, especially in children and elderly people, and can diminish local agricultural production by reducing sunlight. Furthermore, in many countries coal plants are the single largest source of carbon dioxide emissions driving climate change. 

To help inform the policy debate, this analysis surveys the technologies in use in more than 2,000 coal-fired power plants currently in operation, under construction, or planned in middle-income countries. The findings reveal that roughly 70 percent of these power plants rely on old, inefficient technologies. Retrofitting these plants would reduce pollution, increase efficiency and save lives. In middle-income countries that do not mandate coal retrofits, the World Bank could play a helpful role in financing those improvements, particularly as part of broader policy reforms designed to reduce climate pollution and increase efficiency across the power sector.

Importantly, however, the data also show that important qualifications should be made. First, because coal is a major source of greenhouse gas emissions and retrofits are likely to keep coal plants operating longer, the World Bank should insist that retrofit projects occur within a context of national and local policy reforms designed to abate greenhouse gas pollution. Toward this end, the World Bank should continue to help countries build capacity to adopt and enforce climate pollution controls and other offsetting actions and policies. Second, the World Bank should insist that projects it finances use best available pollution control technologies. Already, the substantial majority of coal retrofits completed to date in middle-income countries have used best available technologies. These retrofits were almost universally financed exclusively by private capital. The World Bank should not use its capital to support inferior retrofit technologies that are below the standards already adopted by the private sector in middle-income countries.

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The United Nations will convene a major international conference on Financing for Development (FfD) in Addis Ababa, Ethiopia from July 13 to 16, 2015, to discuss financing for the post-2015 agenda on sustainable development. This conference, the third of its kind, will hope to replicate the success of the Monterrey conference in 2002 that has been credited with providing the glue to bind countries to the pursuit of the Millennium Development Goals (MDGs).

The analogy is pertinent but should not be taken too far. The most visible part of the Monterrey Consensus was the commitment by rich countries to “make concrete efforts towards the target of 0.7 percent of gross national product” as official development assistance (ODA). This was anchored in a clear premise that “each country has primary responsibility for its own economic and social development,” which includes support for market-oriented policies that encourage the private sector. While not all of the Monterrey targets have been met, there has been a considerable increase in resources flowing to developing countries, as a central plank of efforts to achieve the MDGs.

Today, aid issues remain pivotal for a significant number of countries, but they are less relevant for an even larger number of countries. The core principles of Monterrey need to be reaffirmed again in 2015, but if the world is to follow-through on a universal sustainable development agenda, it must address the multi-layered financing priorities spanning all countries. A simple “30-30-130” mnemonic helps to illustrate the point. There are 193 U.N. member states. Of these, only around 30 are still low-income countries (33 at the latest count). These are the economies that are, and will continue to be, the most heavily dependent on aid as the world looks to how it should implement the sustainable development goals (SDGs). Conversely, there are only around 30 “donor” countries (including 28 members of the OECD Development Assistance Committee, or DAC) that have made international commitments to provide more aid. For the remaining 130 or so emerging middle-income economies that have achieved higher levels of average prosperity, aid discussions risk forming a sideshow to the real issues that constrain their pursuit of sustainable development. The bottom line is that for most countries, the Financing for Development conference should unlock finance from many different sources, including but not exclusively aid, to implement the SDGs.

Addis will take place in the context of sluggish global growth, an upsurge in conflict, considerable strains in multilateral 2 political cooperation, and challenging ODA prospects in many countries.

There are other differences between Addis and Monterrey. Monterrey took place after agreement had been reached on the MDGs, while Addis will precede formal agreement on the SDGs by a few months. Monterrey was focused on a government-to-government agreement, while Addis should be relevant to a far larger number of stakeholders—including businesses, academics, civil society, scientists, and local authorities. Monterrey was held against a backdrop of general optimism about the global economy and widespread desire for intensified international collaboration following the terrorist events of September 11, 2001. Meanwhile, Addis will take place in the context of sluggish global growth, an upsurge in conflict, considerable strains in multilateral political cooperation, and challenging ODA prospects in many countries. In addition, regulators are working to reduce risk-taking by large financial institutions, increasing the costs of providing long-term capital to developing countries.

Against this backdrop, an Intergovernmental Committee of Experts on Sustainable Development Finance (ICESDF) crafted a report for the United Nations on financing options for sustainable development. The report provides an excellent overview of issues and the current state of global financing, and presents over 100 recommendations. But it falls short on prescribing the most important priorities and action steps on which leaders should focus at Addis.

This paper seeks to identify such a priority list of actions, with emphasis on the near-term deliverables that could instigate critical changes in trajectories towards 2030. At the same time, the paper does not aim to describe the full range of outcomes that need to be in place by roughly 2025 in order to achieve the SDGs by their likely deadline of 2030. Addis will be a critical forum to provide political momentum to a few of the many useful efforts already underway on improving global development finance. Time is short, so there is limited ability to introduce new topics or ideas or to build consensus where none already exists.

We identify three criteria for identifying top priorities for agreement in Addis:

• Priorities should draw from, and build on, on-going work—including the ICESDF report and the outputs „„of several other international workstreams on finance that are underway.
• Agreements should have significant consequences for successful implementation of the SDGs at the coun„„try, regional or global level.
• Recommendations should be clearly actionable, with next steps in implementation that are easy to under„„stand and easy to confirm when completed.

It is not necessary (or desirable) that every important topic be resolved in Addis. In practical terms, negotiators face two groups of issues. First are those on which solutions can be negotiated in time for the July conference. Second are those for which the problems are too complex to be solved by July, but which are still crucial to be resolved over the coming year or two if the SDGs are to be achieved. For this second group of issues, the intergovernmental agreement can set specific timetables for resolving each problem at hand. There is some precedent for this, including in the 2005 U.N. World Summit, which included timetables for some commitments. What is most critical is that the moment be used to anchor and advance processes that will shift toward creating a global financing system for achieving sustainable development across all countries. Committing to timetables for action and building on reforms already undertaken could be important ways of enhancing the credibility of new agreements.

In this paper, we lay out nine areas where we believe important progress can be made. In each area, we start from identifying a gap or issue that could present an obstacle to the successful implementation of the SDGs if left unattended. In some cases the gaps will affect all countries, in other cases only a subset of countries. But we believe that the package of actions, taken as a whole, reflects a balance of opportunities, responsibilities and benefits for all countries. We also believe that by making the discussion issue-focused, the needs for financing can be balanced with policy actions that will be required to make sure financing is effectively and efficiently deployed.

In addition to the nine areas listed below, there are other commitments already made which have not yet been met. We urge renewed efforts to meet these commitments, but also recognize that political and financial realities must be managed to make progress. Such commitments include meeting the Monterrey Consensus target to provide 0.7 percent of GNI in official development assistance (ODA), the May 2005 agreement of all EC-15 countries to reach that target by 2015, and bringing the Doha Development Round of trade talks to a successful conclusion. These remain important and relevant, but in this paper we choose to focus on new areas and fresh ideas so as to avoid treading over well-worn territory again.

In his state of the union and his budget, the President spoke of the stagnation of middle class incomes. Whatever growth we have had has not been broadly shared.  More than 78% of the growth in GDP between 1979 and 2013 has gone to the top one percent. Even Republicans are beginning to worry about this issue although they have yet to develop concrete proposals to address it.

Slow Growth in Incomes

Middle class incomes were growing slowly before the recession and have actually declined over the past decade.   In addition, according to the New York Times, the proportion of the population with incomes between $35,000 and $100,000 in inflation-adjusted terms fell from 53% in 1967 to 43% in 2013.  During the first four decades this was primarily because more people were moving into higher income groups, but more recently it was because they have moved down the ladder, not up.  One can define the middle class in many different ways or torture the data in various ways, but there is plenty of evidence that we have a problem.

What to Do

The most promising approach is what I call “the second earner solution.”  For many decades now, the labor force participation rate of prime age men has been falling while that of women has been rising.  The entry of so many women into the labor force was the major force propelling whatever growth in middle class incomes occurred up until about 2000. That growth in women’s work has now levelled off.  Getting it back on an upward track would do more than any policy I can think of to help the middle class.

Imagine a household with one earner making the average wage of today’s worker and spending full-time in the job market.  That household will have an income of around $34,000. But if he (or she) has a spouse making a similar amount, the household’s income will double to $68,000. That is why the President’s focus on a second-earner credit of $500, a tripling of the child care tax credit, expanding the Earned Income Tax Credit, and providing paid leave are so important. These policies are all pro-work and research shows they would increase employment.

No Marriage = No Second Earner

One problem, of course, is that fewer and fewer households contain two potential workers.  So it would also help to bring back marriage or at least its first cousin, a stable cohabiting relationship.  My ideas on this front are spelled out in my new book, Generation Unbound. In a nutshell, we need to empower women to not have children before they have found a committed partner with whom to raise children in a stable, two-parent family. Whatever the other benefits of two parents, they have twice as much time and potentially twice as much income.    

Other Needed Responses

Shouldn’t we also worry about the wages or the employment of men?  Of course.  But an increase in, say, the minimum wage or a better collective bargaining environment or more job training will have far smaller effects than “the second earner solution.”  In addition, the decline in male employment is related to still more difficult problems such as high rates of incarceration and the failure of men to take advantage of postsecondary education as much as women have. 

Still the two-earner solution should not be pursued in isolation. In the short-term, a stronger recovery from the recession is needed and in the longer-term, more effective investments in education, research, infrastructure, and in labor market institutions that produce more widely-shared growth, as argued by the Commission on Inclusive Prosperity. But do we really expect families to wait for these long-term policies to pay off?  It could be decades. 

In the meantime, the President’s proposals to make work more appealing to existing or potential second earners deserves more attention.  

When California passed its 2016 budget late last month, it joined a growing list of states that have recently adopted or expanded state versions of the federal Earned Income Tax Credit (EITC). First enacted in 1975, the EITC has become one of the country’s most effective antipoverty programs. We estimate that the federal EITC keeps millions of individuals and children out of poverty each year, reducing the national poverty rate by several percentage points. Others have shown how the EITC creates a strong incentive to work and works as a powerful tool for reducing income inequality.

For an unmarried worker with one child in 2015, the federal EITC works like this: Up to her first $9,880 earned, the worker receives a tax credit equal to 34 cents on the dollar, for a maximum credit value of $3,359. The credit is reduced by 16 cents for each dollar earned beginning at $18,110, eventually phasing out at $39,100 in earnings. Phase-in and phase-out rates and ranges depend on a worker’s filing status and number of dependents claimed. Importantly, the EITC is refundable; a filer can still claim any credit in excess of her tax liability, contributing to refunds that can represent double-digit shares of annual income for lower-paid workers.

Of the 26 states and the District of Columbia with their own EITCs, most have structured their programs to mirror the federal EITC, by simply matching some percentage of the federal credit in a given tax year (see map). This year, Massachusetts, New Jersey, and Rhode Island all increased their state EITCs’ matching percentages. In three states, the EITC is non-refundable, making it a less effective incentive for very low-income workers (Maine this year made its credit refundable). California’s EITC joins a couple of others that, while still refundable, vary in the degree to which they mirror the federal credit based on filing status and income.

Through our work maintaining Brookings’ EITC Interactive, we hear regularly from stakeholders around the country engaged in efforts to expand the EITC and increase local participation to strengthen low-income families and communities. Although it is difficult to determine uptake rates locally, there are several factors associated with participation. Self-employed workers are less likely to claim the credit, as are workers with low English proficiency, and those who do not claim any dependents. The availability of tax preparation assistance tends to increase participation rates. For groups who hope to expand access to the EITC in their communities, these considerations are a good place to start.

To be sure, the EITC is not a silver bullet. Because it is explicitly tied to work effort, the credit does not support low-income families who can’t find work. And because states must balance their budgets, many have had difficulty sustaining their EITCs during periods of economic downturn. (Several of the recent state EITC expansions actually represent the restoration of benefits following drastic cuts during the Great Recession.) Additionally, the federal EITC and its state analogues provide only modest support to workers who do not claim any dependents on their tax return. As such, policy makers should consider state EITCs strong complements to other interventions, such as the growing number of increases in the minimum wage occurring in states and cities.

Nevertheless, the EITC remains one of the best tools we have to fight poverty. Despite bipartisan support for the federal EITC, it is unlikely to be expanded anytime soon. In that light, recent state EITC expansions may be helping to create a more responsive, sub-national safety net that better reflects a large and diverse nation where local priorities and needs differ markedly.

Event Information

As part of an ongoing cooperative agreement with the U.S. Food and Drug Administration (FDA), the Engelberg Center for Health Care Reform at Brookings has formed the Brookings Council on Antibacterial Drug Development (BCADD) to identify steps to address the major technical, regulatory, and financial barriers impeding antibacterial drug development. At the first meeting of the BCADD, stakeholders emphasized the importance of concentrating on discrete policy and program areas to revitalize the antibacterial drug development enterprise.

BCADD convened a diverse group of stakeholders, including FDA officials, industry and biotech representatives, payers, providers, clinicians, and academic researchers Wednesday, February 27, 2013, to discuss two of the economic challenges facing antibacterial drug development:

• Better understanding the potential role of incentives in drug discovery and development; and
• Identifying potential reimbursement models that can support both stewardship and expanded investment for antibacterial drug products.

Event Materials

• meeting summary 20130925 FINAL
• Discussion Guide
• Participant List
• Presentation

Editors’ Note: It is time to establish a regional reconstruction strategy for the Middle East, argues Sultan Barakat, that involves collective vision, broad participation, smart security, equality, and other key elements.This post originally appeared in Huffington Post.

The World Bank is hosting its annual Fragility Forum this week with the aim of making progress on the post-2015 Sustainable Development Goals. This week has also seen a fragile ceasefire in Syria, potentially landmark elections in Iran, and a violent clash between Jordanian security and so-called Islamic State members. Together these developments have prompted me to reassess what needs to be done to resolve the issues of conflict and fragility in the Middle East.

For the Middle East, the starting point should be to move away from any process that reinforces the image of the West devising solutions and proposing "new" visions to the region. Such approaches are reminiscent of the Sykes-Picot agreement or the neoconservatives' "grand strategy" of the early 2000s and do not appreciate that the Middle East has changed fundamentally since 2011. The region, at all levels, now expects to be treated with dignity and to be the driving force behind its own development.

It is high time to pull together to establish a "Regional Reconstruction Strategy" that can address all sorts of violence, not just Islamist-related conflict. The region needs an ever-evolving strategy that maintains a holistic, problem-solving outlook while drawing on various forms of intervention (e.g. community driven development, inter-regional development projects, targeted counterinsurgency operations, stabilization, statebuilding, etc.) without being straightjacketed by any one toolkit or template. Novel approaches rooted in genuine regional leadership, broad participation, youth engagement, and the utilization of technology will increasingly need to be applied. The pillars of such a strategy should be a collective regional vision, effective local participation, smart security, reconciliation and justice, equity, reconstruction and development, and capacity.

Collective Vision: With the aspirations of the Arab Spring unrealized and many countries descending into sectarianism, what is needed now is a collective vision that goes beyond national borders. This would include pooling the region's resources, specifically all the ingredients for large-scale development, such as human resources, an educated population, capital, mobility, and nature. We could then look to the day when region-wide development is synergistic and not predatory or a zero-sum game. What Morocco has achieved with solar energy is a shining example—a visionary investment has addressed regional developmental and environmental challenges, stimulated employment, and raised confidence that hi-tech and innovative sectors can thrive in the Middle East. Such a broad vision is crucial if the region is to leapfrog into the twenty-first century and not remain in a vicious cycle of conflict and failed development.

Key to an inclusive and non-adversarial vision will be both accepting and embracing Islam as a majority religion while building on human security as an area of common ground. For this to happen some real changes are required in places such as Iran and Saudi Arabia—which would enable both to exercise their regional leadership in coalescing a constructive collective vision rather than perpetuating sectarian hostility.

Broad Participation: It is important that the regional vision recognizes that development requires an active civil society, a free media, and rooting action and ideas at the local level and with popular participation. The process of engaging in a region-wide consultation where contributions are coming from schools, villages, city halls, political parties, unions, and many other civic forums can help the region start dreaming about what it wants to look like in the 50 years to come.

Smart Security: Instead of a collective vision for development we have one for defense, formed with the excuse of the Islamic State group. All appreciate that a minimum level of security is important for implementing reconstruction, but a lack of security cannot be a pretext to do nothing. Experience has shown that delaying reconstruction efforts pushes people down the slope of conflict and violence and leads to dependence on humanitarian assistance. The region needs to find ways of better understanding the granular texture of security at local and regional levels so that strategies can be developed in which localized insecurity does not hold back development in other areas. This could support "spot reconstruction" efforts that create exemplars of what a degree of stability combined with reconstruction intervention can achieve in the midst of larger instability.

Reconciliation and Justice: No long-term investment in reconstruction can be protected without genuine reconciliation across the region. Twenty years ago the main fault line was Israel-Palestine. Today, there are many additional fault lines that need to be addressed, including Muslim-Christian tensions, tensions between displaced and host communities, and tensions between Sunni and Shiite communities. The most fundamental way to initiate reconciliation is to make sure that the rule of law applies to all and that everyone has access to justice regardless of the mechanism. On this a lot can be built on local and traditional systems for achieving justice and reconciliation.

Equity: A common mistake with reconstruction is that it proceeds without sufficient regulation and monitoring to ensure that benefits are equitably distributed. This region has repeatedly seen how easily reconstruction "lords" (most of whom were previously warlords) can emerge to line their pockets at the expense of the general public, thus perpetuating that country's crisis. World Bank arguments for the private sector to take the lead in reconstruction in Afghanistan and elsewhere have done nothing but strengthen this model. Assad's efforts to liberalize Syria's economy prior to 2011 led to the further enrichment of a corrupt elite, contributing to what we see today. Going forward, reconstruction efforts must take into consideration the poorest and least capable—so that nobody is left out.

Reconstruction and Development: There is an urgent need to find new ways of inducing development through international engagement with the region. The current instability has shifted spending toward security and away from the basics of development. As a result, some of the most important development indicators—freedom of expression, women's participation, poverty, quality of education—have taken a step back. All this is happening when the region is facing financial challenges due to severely reduced oil prices. This may prove to be an opportunity as some countries needed a good wake-up call to the pernicious effects of a model of capital development in which billions of dollars are invested in the West, generating jobs and stabilizing economies thousands of miles away at the expense of the region. If the West wants to help the region it should seek to focus minds within the Arab world on the value of investment in addressing regional problems in a mutually beneficial way. Ultimately a more stable region will lead to more prosperous neighbors both in the East and the West.

Building Capacity: To do this we must invest enormous amounts in fostering sustainable capacity at regional, national, and local levels. It is essential to invest in education at all levels, in particular going beyond primary education to support the young men and women that will become leaders with the conviction and capabilities to rebuild the region. In a rush to capture development, we have focused on the hard sciences, engineering, business studies, and computer science while ignoring our own culture, languages, and history. We must correct this imbalance, and it is time we develop our ideas in our own language and not rely on translation.

For all this to happen, fragility must be addressed within a coherent regional vision, not individual national plans. It would be constructive if the international community and donors would try to view the region as a whole—as one canvas in which to facilitate cross-border mobility of population, capital, ideas, and labor—and encourage regional responsibility with different countries leading in their areas of competency. International partners can support this with new and innovative forms of funding that utilize collateral guarantees from the region, not just individual countries. If we can embrace a truly regional approach, there may be a day when we elevate human dignity and human development above petty politics and sectarianism.

Editors’ Note: To salvage his Middle East legacy, advance American interests in the Arab world, and align with the position of the international community on this conflict, Ibrahim Fraihat argues, President Obama must make the long overdue decision of recognizing a sovereign and independent Palestinian state before leaving office. This post originally appeared on Middle East Eye.

Driven by the search for his legacy in the Middle East, it seems President Barack Obama has decided to spend additional political capital on reviving Israeli-Palestinian talks before the end of his second term in office.

Last month, the Wall Street Journal reported that the White House is working on a renewed peace push, including a possible Security Council resolution or other initiatives such as “a presidential speech and a joint statement from the Middle East Quartet.”

While it is still unclear where President Obama is going with this renewed effort, he must understand that using the same old techniques of U.S. mediation will only exacerbate the crisis, consequently tarnishing his legacy in the Middle East. To salvage his Middle East legacy, advance American interests in the Arab world, and align with the position of the international community on this conflict, he must make the long overdue decision of recognizing a sovereign and independent Palestinian state before leaving office.

[U]sing the same old techniques of U.S. mediation will only exacerbate the crisis, consequently tarnishing [Obama's] legacy in the Middle East.

First, Obama should learn from the mistakes of his predecessors, George W. Bush and Bill Clinton, who also tried to reach a mutually acceptable agreement between the Palestinian and Israelis with only a few months left in office.

Reaching an agreement between the two parties under severe time pressure will not work. A party that is not interested in a peace agreement can easily maneuver by using delaying tactics until Obama’s term ends. Israeli Prime Minister Benjamin Netanyahu already utilized this strategy when he publicly rejected an invitation from Obama to visit the White House to talk peace because he wanted to “avoid any perceived influence” in the forthcoming U.S. presidential election. These remarks came from the same person who meddled in domestic American affairs by aggressively lobbying against Obama during the last U.S. presidential election.

Obama has already put in the effort by working with the parties, but now he needs to make decisions. Unlike many American presidents, Obama made the resolution of this conflict a top priority. Despite the brutal civil wars engulfing the Middle East region in the past five years, Obama demonstrated a firm commitment and allocated the needed political capital to make a breakthrough in the Israeli-Palestinian conflict. During his time in office, Secretary of State John Kerry spent more time on Israeli-Palestinian negotiations than any other international conflict. However, the outcome of the Obama administration’s intensive diplomatic efforts has been a total failure. These negotiations ended without an accord or even a memorandum of understanding, agreements that could have built on Obama’s legacy in the Middle East.

Nonetheless, Obama knows very well who made him fail. Netanyahu repeatedly defied Obama: In Congress, he refused to engage in serious negotiations that could have led to an agreement, and he publicly lobbied against Obama’s election for a second term. Obama should not expect Netanyahu to change his position and cooperate on any renewed efforts that could save Obama’s failed legacy in the Middle East. This is the same Netanyahu whom Obama increasingly grew frustrated with throughout his presidency.

With the remaining few months in office, the time has come for Obama to shape his legacy in the Middle East the way he wants it, not the way that Netanyahu has lobbied to characterize it. Obama has an opportunity to take his place in history as the first American president to officially recognize an independent Palestinian state.

Obama has an opportunity to take his place in history as the first American president to officially recognize an independent Palestinian state.

Sooner or later, there will be a Palestinian state and the United States will recognize it. Obama knows that very well. So why should he miss this opportunity and let another president recognize it in the future? Obama should worry about his own legacy, not Netanyahu’s extremist views. Obama should never allow Netanyahu to shape his legacy in the Middle East and leave it stained with failure.

Obama’s Middle East legacy is equally bleak in other parts of the region. Syria could become Obama’s Rwanda; Benghazi and the late Ambassador Chris Stevens are witnesses to his legacy in Libya; al-Qaeda in Yemen is much stronger today than when Obama intensified his drone policy against the organization; only history will tell how the Iran nuclear deal turns out in the future. Unfortunately, Obama cannot change the facts in any of these countries with the limited time remaining for him in office. However, he can still restore his legacy in the Middle East by recognizing a Palestinian state.

By recognizing a Palestinian state now, Obama will have seized an historical opportunity to impact the future and establish a foundation for the next American administration in the Middle East. No matter who comes to the White House, they will have to deal with this new fact. Obama has the international community on his side in recognizing Palestine. France recently stated that it will recognize an independent Palestinian state if a final effort to bring about peace fails. Additionally, Sweden has officially recognized Palestine.

American diplomats have a tradition of balancing their views after they leave office as they become free from the pressure of the Israel lobby and domestic politics. President Jimmy Carter is a one example of this.

Obama should not fall into this trap. No matter how he adjusts his views after leaving office, he will never save his legacy in the Middle East and the Israeli-Palestinian conflict if he does not recognize a Palestinian state while he still has the power to do so. The time is now and he must act rather than regretting it later.

President Obama, if not for your legacy, at least recognize Palestine for the Nobel Peace Prize that you received in advance. The committee trusted you and awarded you the prize before you achieved any real peace; do not disappoint them. Make sure you earn the prize, Mr. President. If not for your legacy or the prestigious prize, then please do something for your own personal pride and be the one who laughs last, not Benjamin Netanyahu.

Mr. President, recognize Palestine now.

With conflicts in the Middle East continuing unabated, refugees continue to flow out of several war-torn countries in massive numbers. The question of whether to admit more refugees into the United States has not only been a source of debate among Washington policymakers, it has also become a central question within the U.S. presidential race. Nonresident Senior Fellow Shibley Telhami conducted a survey on American public attitudes toward refugees from the Middle East, in particular from Syria, Iraq, and Libya. Below are several key findings from the poll and a download link to the survey's full results.

Downloads

• Poll: American attitudes on refugees from the Middle East
• Poll Presentation
• Key Findings
• Refugee Questionnaire

"At the end of the day, we need to remember that Daesh is more a product of the civil wars than it is a cause of them. And the way that we’re behaving is we’re treating it as the cause.  And the problem is that in places like Syria, in Iraq, potentially in Libya, we are mounting these military campaigns to destroy Daesh and we’re not doing anything about the underlying civil wars.  And the real danger there is—we have a brilliant military and they may very well succeed in destroying Daesh—but if we haven’t dealt with the underlying civil wars, we’ll have Son of Daesh a year later." – Ken Pollack

“Part of the problem is how we want the U.S. to be more engaged and more involved and what that requires in practice. We have to be honest about a different kind of American role in the Middle East. It means committing considerable economic and political resources to this region of the world that a lot of Americans are quite frankly sick of… There is this aspect of nation-building that is in part what we have to do in the Middle East, help these countries rebuild, but we can’t do that on the cheap. We can’t do that with this relatively hands off approach.” – Shadi Hamid

In this episode of “Intersections,” Kenneth Pollack, senior fellow in the Center for Middle East Policy and Shadi Hamid, senior fellow in the Project on U.S. Relations with the Islamic World and author of "Islamic Exceptionalism: How the Struggle over Islam is Reshaping the World," discuss the current state of upheaval in the Middle East, the Arab Spring, and the political durability of Islamist movements in the region. They also explain their ideas on how and why the United States should change its approach to the Middle East and areas of potential improvement for U.S. foreign policy in the region. 

Show Notes

Fight or flight: America’s choice in the Middle East

Security and public order

Islamists on Islamism today

Temptations of Power: Islamists & Illiberal Democracy in a New Middle East

Ending the Middle East’s civil wars

A Rage for Order: The Middle East in turmoil, from Tahrir Square to ISIS

Building a better Syrian opposition army: How and why

With thanks to audio engineer and producer Zack Kulzer, Mark Hoelscher, Carisa Nietsche, Sara Abdel-Rahim, Eric Abalahin, Fred Dews and Richard Fawal.

Subscribe to the Intersections on iTunes, and send feedback email to intersections@brookings.edu.

Editor’s Note: This blog post is part of a series on the 2015 Financial and Digital Inclusion Project (FDIP) Report and Scorecard, which were launched at a Brookings public event on August 26. Previous posts have highlighted five key findings from the 2015 FDIP Report and explored groundbreaking financial inclusion developments in India. Today’s post will compare financial inclusion outcomes and opportunities for growth across several Asian countries included in the 2015 Report and Scorecard.

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Of the 21 countries ranked in the 2015 Financial and Digital Inclusion Project (FDIP) Report and Scorecard, no countries in Asia placed in the top 5 in the overall ranking. However, all of the FDIP Asian countries have demonstrated progress within at least one of the four dimensions of the 2015 Scorecard: country commitment, mobile capacity, regulatory environment, and adoption of traditional and digital financial services.

This blog post will dive into a few of the obstacles and opportunities facing FDIP countries in central Asia, the Middle East, and southeast Asia as they move toward greater access to and usage of financial services among marginalized groups. We explore these countries in order of their overall score: Turkey (74 percent), Indonesia (70 percent), the Philippines (68 percent), Bangladesh (67 percent), Pakistan (65 percent), and Afghanistan (58 percent). You can also read our separate post on financial inclusion in India, available here.

Turkey: Clear economic advantages, but opportunities for enabling regulation and greater equity remain

Turkey is one of the few upper-middle income countries in the FDIP sample, ranking in the top 5 in terms of gross domestic product (GDP) measured in US dollars. Turkey’s fairly robust banking infrastructure contributed to its relatively strong adoption rates: As of 2013, the International Monetary Fund’s Financial Access Survey found that Turkey had about 20 bank branches per 100,000 adults (the 4^th highest density rate among the 21 FDIP countries) and about 73 ATMs per 100,000 adults (the 2^nd highest density rate among the FDIP countries).

According to the World Bank’s Global Financial Inclusion (Global Findex) database, about 57 percent of adults in Turkey had an account with a mobile money provider or formal financial institution as of 2014. Turkey’s performance on the adoption dimension of the 2015 Scorecard contributed to its tie with Colombia and Chile for 6^th place on the overall scorecard.

With that said, Turkey received lower mobile capacity and regulatory environment scores, ranking 16^th and 17^th respectively. Although Turkey’s smartphone and mobile penetration levels are quite robust, a limited mobile money provider landscape, combined with a lack of regulatory clarity surrounding branchless banking regulations (particularly agent banking), constrained Turkey’s scores in those categories.

Nonetheless, there is promising news for Turkey’s financial inclusion environment. In 2015, Turkey assumed the G20 presidency and has renewed its focus on financial inclusion in association with this transition. Turkey’s 2014 financial inclusion strategy is one example of the country’s commitment to advancing inclusion.

To date, financial inclusion growth in Turkey has been limited, as evidenced by the results of the 2011 and 2014 Global Findex. However, if the country’s stated commitment translates into concrete initiatives moving forward, we can expect to see accelerated financial inclusion growth. This will be critical for facilitating access to and usage of quality financial services among the nearly 60 percent of women in Turkey without formal financial accounts. Reducing the approximately 25 percentage point gap in account ownership between men and women — one of the highest gender gaps among the 21 FDIP countries — should be a key priority for the country moving forward.

Indonesia: High mobile money potential, but enhanced awareness needed to drive adoption

Recent changes to Indonesia’s regulatory environment have facilitated a more enabling digital financial services ecosystem, although there is still room for improvement in terms of reducing supply-side barriers. Increasing mobile money awareness could help leverage Indonesia’s strong mobile capacity rates to increase access to and usage of formal financial services. However, moving from a heavily cash-based environment to greater use of digital financial services will take time: A 2014 InterMedia survey in Indonesia found that although 93 percent of bank account holders could access their accounts digitally, 73 percent preferred to access their accounts via an agent at a bank branch.

The differing mandates of Indonesia’s new financial services authority, Otoritas Jasa Keuangan (OJK), which focuses on branchless banking (specifically agent banking) and Bank Indonesia, which focuses on electronic money regulation, may have created some confusion regarding the regulatory environment. Solidifying the country’s financial inclusion strategy and clarifying the roles of the various financial inclusion stakeholders could provide opportunities for greater coherence in terms of financial inclusion objectives.

OJK’s recent branchless banking regulations have led to several positive changes within the regulatory environment. For example, these regulations enabled financial service providers to appoint individuals and business entities as agents and to provide simplified customer due diligence requirements. The 2015 FDIP Report highlights in greater detail some possible improvements to the branchless banking and e-money regulations.

On the mobile capacity side, Indonesia tied for the second-highest score on the 2015 Scorecard. Indonesia is one of the few countries where mobile money platform interoperability has been implemented, allowing different mobile money services to “talk” to one another in real time. Indonesia also boasted the third-highest 3G network coverage by population among all the FDIP Asian countries, as well as the third-highest unique subscribership rate among these countries. However, only about 3 percent of adults were aware of mobile money as of fall 2014, according to the InterMedia survey.

In terms of adoption, the 2014 Global Findex found that women in Indonesia actually had slightly higher rates of account ownership than adults in general, although there is still significant room for growth across all adoption indicators. Given Indonesia’s strong mobile capacity ranking, increasing awareness of mobile money services could drive growth in the digital finance sector. Clarifying existing regulatory frameworks and removing some remaining restrictions regarding agent exclusivity and other agent criteria could further boost financial inclusion.

Philippines: Strong commitment, but geographic barriers have inhibited scale

The Philippines tied with Bangladesh to garner 15^th place for adoption, which contributed to the country’s overall ranking (also 15^th place). In both Bangladesh and the Philippines, about 31 percent of adults had an account with a mobile money provider or formal financial institution as of 2014. According to the 2014 Global Findex, the percentage of women with formal financial accounts was about 7 percentage points higher than the overall percentage of adults with accounts — a rarity among the 21 FDIP countries, which generally exhibit a “gender gap” in which women are less likely to have formal financial accounts than men.

The Philippines’ efforts to foster financial inclusion earned it the second-highest country commitment and regulatory environment rankings among the FDIP Asian countries. The Bangko Sentral ng Pilipinas (BSP), the Philippines’ central bank, has issued a number of circulars providing guidance regarding electronic money and allowing non-bank institutions to become e-money issuers. The BSP also has the distinction of being the first central bank in the world to create an office dedicated to financial inclusion. Most recently, the BSP launched a national financial inclusion strategy in July 2015.

On the mobile side, according to the GSMA Intelligence database, as of the end of the first quarter of 2015 the Philippines had the highest unique mobile subscribership rate among the FDIP Asian countries, as well as the second-highest rate of 3G network coverage by population among these countries.

In terms of mobile money, the Philippines is home to two of the earliest mobile financial services products, Smart’s Smart Money and Globe’s GCash. It also boasts the second-highest rate of mobile money accounts among adults in all the FDIP Asian countries, according to the 2014 Global Findex.

There is still significant room for improvement in adoption of traditional and digital financial services in the Philippines. The country’s geography has posed a challenge with respect to advancing access to financial services among the dispersed population. While the extent of banking infrastructure has improved over time, as of 2013 610 out of 1,634 cities and municipalities did not have a banking office, and financial access points remained concentrated in larger cities. Expanding agent locations and facilitating interoperability could enhance mobile money adoption, mitigating the consequences of these geographic barriers.  

Bangladesh: Rapid growth, but high unregistered use and low adoption overall

While Bangladesh performed strongly on the country commitment and mobile capacity dimensions of the 2015 FDIP Scorecard, it received one of the lowest adoption rankings among the FDIP Asian countries. According to the Global Findex, about 31 percent of adults age 15 and older had an account with a formal financial institution or mobile money provider as of 2014. Indicators pertaining to the country’s rates of formal saving, credit card use, and debit card use all received the lowest score.

Bangladesh has a robust mobile landscape, with fairly strong unique mobile subscription rates — as of the first quarter of 2015, it was tied with Indonesia for the third-highest unique mobile subscribership rates among the FDIP Asian countries, after the Philippines and Turkey. This mobile coverage is combined with a multiplicity of mobile money providers (although a 2014 InterMedia survey noted that nearly 90 percent of active mobile money customers used the bKash mobile money service).

Awareness of mobile money as a service in Bangladesh is very high, although understanding of the concept is less prevalent — in 2014, about 91 percent of respondents in an InterMedia survey were aware of at least one mobile money provider, although only about 36 percent were aware of mobile money as a general concept.

Unregistered use of mobile money accounts is high. While about 37 percent of adults had a mobile money account or bank account or both as of 2014, according to the InterMedia survey, only about 5 percent had registered mobile money accounts, while 4 percent had active, registered mobile money accounts (meaning an account that is registered and has been used in the previous 90 days).Transitioning to registered accounts will help enable individuals to connect with more extensive financial services, such as receipt of government payments.

Overall, adoption of mobile money and the expansion of agent locations have been increasingly rapid in Bangladesh — as of 2014 Bangladesh was one of the fastest growing markets in terms of total accounts globally. Over 60 percent of respondents in a 2013 InterMedia survey stated that they “fully” or “rather” trusted mobile money. Moving forward, increasing financial capability might help individuals feel more at ease registering their accounts and using them independently of an agent.

Pakistan: Public and private sector initiatives advance inclusion

Pakistan ranked 7^th in terms of the percentage of adults with mobile money accounts among the 21 countries, achieving the highest percentage of all of the Asian FDIP countries. Yet there is significant room for growth — as of 2014, only about 6 percent of adults had a mobile money account.

The State Bank of Pakistan (SBP) has clearly expressed its commitment to advancing financial inclusion, which earned the country a commitment score of 100 percent. The SBP developed Branchless Banking regulations in 2008, with revisions in 2011. These regulations were explicitly intended to promote financial inclusion. More recently, the country’s National Financial Inclusion Strategy was launched in May 2015. In terms of quantitative assessments of financial inclusion, the SBP tracks supply-side information on branchless banking in its quarterly newsletters.

Recent public and private sector initiatives may help advance mobile money adoption. For example, a re-verification initiative for SIM cards was mandated by the government and initiated earlier in 2015. Mobile network operators have been promoting registration of mobile money accounts since the biometric re-verification process is more intensive than the identification requirements needed to register a mobile money account.

Earlier, in September 2014, the EasyPaisa mobile money service decided to eliminate fees related to money transfers between Easypaisa account customers and cash-out transactions for a set period. As of April 2015, the number of person-to-person money transfers had increased by about 2500 percent.

Still, barriers to financial inclusion remain. A 2014 InterMedia survey noted that while distance was less of a barrier to registration than previously, distance did affect the frequency with which users engaged with mobile money services. Therefore, expanding access points could further facilitate use of mobile money. Increasing the number of registered accounts could also provide individuals with more opportunities to engage with financial services beyond basic transfers — the InterMedia survey found that as of 2014, about 8 percent of adults were over-the-counter mobile money users, while 0.3 percent were registered users.

Afghanistan: Commitment to improving infrastructure and adoption

Instability and systemic corruption in Afghanistan over the past several decades have damaged trust in formal financial services and limited the development of traditional banking infrastructure. In addition to having one of the lowest levels of GDP among the 21 FDIP countries, as of 2013 the Financial Access Survey found Afghanistan had the lowest reported density of commercial banks per 100,000 adults. Even among individuals who can access banks, adoption of formal accounts is constrained by a lack of trust in formal financial services.

On the mobile side, Afghanistan has fairly widespread 3G network coverage (over 80 percent of the population, according to the GSMA Intelligence database), which helped boost its mobile capacity ranking to 2^nd place. However, Afghanistan received the lowest score possible for each of the 15 adoption indicators. According to the 2014 Global Findex, financial account ownership as of 2014 was at about 10 percent of adults, and financial account ownership among women was at only 4 percent. Tracking gender-disaggregated data at the national level could help the government better identify underserved populations and target financial solutions toward their needs.

The government has made an effort to promote financial inclusion and digital financial services. For example, Da Afghanistan Bank committed to the Alliance for Financial Inclusion in 2009, and the Republic of Afghanistan is a member of the Better Than Cash Alliance. In 2008, the Money Service Providers Regulation was issued, with amendments instituted a few years later pertaining to e-money. The Afghanistan Payments Systems, which is still being fully operationalized, aims to allow payment service providers such as mobile network operators to connect their mobile money systems.

While several mobile money options are available, adoption of these services is low. According to the 2014 Global Findex, about 0.3 percent of adults had a mobile money account. Implementing interoperability across platforms might help increase the utility of mobile money services for consumers, and as in Turkey, developing specific agent banking regulations could provide clarity to the sector and drive innovation.

By expanding financial access points, educating consumers about traditional and digital financial services, and monitoring providers to ensure consumer protection, Afghanistan’s regulatory entities and financial service providers may be able to better reach underserved populations and inculcate trust in formal financial services.

“If the Americans and their regional allies want to pass through the Strait of Hormuz and threaten us, we will not allow any entry,” said deputy commander of Iran’s Revolutionary Guards, Hossein Salami, last Wednesday. Iran has a long history of making threats against this critical waterway, through which some 17 million barrels of oil exports pass daily, though it has not carried them out. But multiple regional security threats highlight threats to energy transit from and through the Middle East and North Africa (MENA)—and demand new thinking about solutions.

Weak spots

Hormuz attracts attention because of its evident vulnerability. But recent years have seen severe disruptions to energy flows across the region: port blockades in Libya; pipeline sabotage in Egypt’s Sinai, Yemen, Baluchistan in Pakistan, and Turkey’s southeast; attacks on oil and gas installations across Syria and Iraq; piracy off Somalia. Energy security is threatened at all scales, from local community disturbances and strikes, up to major regional military confrontations.

Of course, it would be best to mitigate these energy security vulnerabilities by tackling the root causes of conflict across the region. But while disruption and violence persist, energy exporters and consumers alike should guard against complacency.

A glut of oil and gas supplies globally—with low prices, growing U.S. self-sufficiency, and the conclusion of the Iranian nuclear deal—may seem to have reduced the urgency: markets have hardly responded to recent flare-ups. But major economies – even the United States – still remain dependent, directly or indirectly, on energy supplies from the MENA region. Spare oil production capacity is at unusually low levels, leaving the balance vulnerable to even a moderate interruption.

Most concern has focused on oil exports, given their importance to the world economy. But the security of liquefied natural gas (LNG) shipments is an under-appreciated risk, particularly for countries such as Japan and South Korea which are heavily dependent on LNG. A disruption would also have severe consequences for countries in the Middle East and North Africa, depriving them not only of revenues but potentially of critical imports.

Doing better 

There are three broad groups of approaches to mitigating the risk of energy transit disruptions: infrastructure, institutions, and market. 

1. Infrastructure includes the construction of bypass pipelines avoiding key choke-points and strategic storage.
   
   Existing bypass pipelines include SUMED (which avoids the Suez Canal); the Habshan-Fujairah pipeline in the UAE (bypassing Hormuz); and the Saudi Petroline, which runs to the Red Sea, hence offering an alternative to the Gulf and Hormuz. Proposed projects include a link from other Gulf Cooperation Council (GCC) countries to Oman’s planned oil terminal at Duqm on the Indian Ocean; new or rehabilitated pipelines from Iraq across Jordan and Turkey; an expansion of Petroline; and a new terminal in southern Iran at Jask.
   
   Strategic storage can be held by oil exporters, by importers, or a combination (in which exporters hold oil close to their customers’ territory, as with arrangements between Saudi Arabia and Japan, and between Abu Dhabi and Japan and India).


2. Institutional approaches include mechanisms to deal with disruptions, such as cooperative sharing arrangements.
   
   More analysis has focused on infrastructure than on institutional and market mitigation. Yet these approaches have to work together. Physical infrastructure is not enough: it has to be embedded in a suitable framework of regulation, legislation, and diplomacy. Cross-border or multilateral pipelines require agreements on international cooperation; strategic storage is most effective when rules for its use are clear, and when holders of storage agree not to hoard scarce supplies. 
   
   The effective combination of infrastructure and institutions has a strategic benefit even if it is never used. By making oil exporters and consumers less vulnerable to threats, it makes it less likely that such threats will be carried out.
   
   Alliances can be useful for mutual security and coordination. However, they raise the difficult question of whom they are directed against. Mutually-hostile alliances would be a threat to regional energy security rather than a guarantor. Organizations such as the International Energy Agency (IEA), the International Energy Forum (IEF), Organization of Petroleum Exporting Countries (OPEC), Gulf Cooperation Council, and the Association of Southeast Asian Nations (ASEAN) could all have roles, but none is ideally placed. Rather than creating another organization, reaching an understanding between existing bodies may be more effective.


3. In general, markets cope well with the task of allocating scarce supplies. Better and timelier data, such as that gathered by the IEF, can greatly improve the functioning of markets. Governments do have a role in protecting the most vulnerable consumers and ensuring sufficient energy for critical services, but price controls, rationing, and export bans have usually been counterproductive, and many of the worst consequences of so-called energy crises have come from well-meaning government interference with the normal market process of adjustment.
   
   However, it is generally difficult or impossible for a single company or country to capture all the benefits of building strategic infrastructure—which, as with a bypass pipeline, may only be required for a few months over a period of decades. International financing, perhaps backed by a major energy importer—mostly likely China—can help support such projects, particularly at a time of fiscal austerity in the Middle East.

Energy exporters within the MENA region may often find their interests divergent. But the field of energy security is one area for more fruitful cooperation—at least between groups of states, and some external players, particularly their increasingly important Asian customers. If regional tensions and conflicts cannot be easily solved, such action at least alleviates one of the serious risks of the region’s turmoil.

For more on this topic, read Robin Mills’ new analysis paper “Risky routes: Energy transit in the Middle East.”

Event Information

The Brookings Doha Center (BDC) hosted a panel discussion on May 30, 2016, about the security of energy exports and energy transit from the Middle East and North Africa (MENA). The panelists were Robin Mills, nonresident fellow at the Brookings Doha Center; and Colonel Giuseppe Morabito, director of the Middle East Faculty at the NATO Defense College. Sultan Barakat, senior foreign policy fellow and director of research at the BDC, moderated the event, which was attended by members of Qatar’s diplomatic, academic, and media community.

Barakat introduced the session by stating that the current unsettled environment in the Middle East raises concerns over energy security, both within the region and amongst energy consumers in Europe, the United States, India, China, and elsewhere. Threats to energy infrastructure exist at all scales, from individual acts of crime, sabotage, and terrorism to major regional wars and conflicts. We have seen large swaths of land fall under the control of non-state actors while states struggle to protect their territories. The Middle East houses some of the most important chokepoints in the energy transit, but also happens to be one of the most unstable regions in the world. 

Mills started his remarks by highlighting paradoxes in the oil and gas markets today, where low global oil and gas prices are juxtaposed with high levels of global disruptions to energy transits. Concern over energy security is lacking as markets appear to pay less attention to risks, even though energy security faces some unprecedented challenges. Such indifference, he noted, may be appropriate for now given the oversupply and abundance of energy in the market. But even in the current market, some possible threats may have very severe effects on global energy supplies, threatening the economies of consumers, producers, and the global market alike.

Mills proceeded to list different risk scenarios. At the local level, he highlighted the threat of sabotage, where communities demanding a greater share of natural resources may block a pipeline or attack an export terminal; piracy, which, he argued, could emerge in regions beyond the coast of Somalia; and attacks by extremist groups, who are eager to get a hold on new sources of income. On a state level, there is the threat of major interstate wars between major exporters, which thankfully haven’t erupted yet.  Past interstate wars, however, have had very significant impacts on energy security. The 1973 war between Israel and Egypt lead to an embargo that triggered the first oil crisis. The 1980s Iran-Iraq war resulted in severe damage to the oil production facilities of both countries and involved a tanker war which destroyed tankers passing through the Strait of Hormuz, resulting in an intervention by both the United States and the Soviet Union to protect shipping.

Hormuz, Mills continued, is one of numerous chokepoints—narrow channels along widely-used global sea routes that are crucial to the energy business. Given their narrowness, they tend to be obvious disruption targets. Hormuz carries about 17 million barrels per day (more than 20%) of oil exports. It is also the sole route for LNG export from Qatar, a crucial source of gas for East Asia and Europe. Other important chokepoints in the region are the Suez Canal, the southern entrance to the Red Sea, and the Bosporus Straits in Turkey. Any interruption of transit along those key areas would be highly detrimental.

Mills argued that, beyond attacks and wars, there is a broader and more diffuse threat to energy security, which has to do with investment. While it is true that investors can handle some level of risk in countries with moderate levels of insecurity like Nigeria, not all levels of insecurity can be worked with. At some point, insecurity can become too severe, deterring investment or even preventing it entirely. In the long term, this deters the development of promising new sources of oil and gas.

In response to a question from Barakat about NATO’s perspective on energy security in the Middle East, Morabito argued that NATO is particularly concerned about its gas supplies from the region, as most NATO countries rely on the region for gas. He argued that NATO’s policies, however, are primarily reactive, driven by events. No major events have interrupted energy supplies in recent times, so energy security is hardly on the agenda of NATO policymakers. There are more pressing issues these days, such as the threat of the Islamic State group (IS) and that of Russia’s Vladimir Putin.

In fact, Morabito continued, it is difficult to focus NATO’s attention on the issue because there doesn’t seem to be one. In the past, oil prices went up simply due to a war in Lebanon, which isn’t even an energy exporter. Today, however, we have a war that involves Saudi Arabia, the largest oil producer, but prices have been declining. The markets are very different today, mainly due to the development of shale technologies.

Nevertheless, Morabito noted that he thinks NATO, or some NATO nations, have intervened to secure their energy interests by training interstate groups such as the Kurds in Iraq or paying tribesmen in Algeria to protect pipelines that flow towards Europe. He noted that protecting pipelines is a costly business. A pipeline of 1,000 kilometers requires the presence of at least two soldiers every 50 meters; those two would have to work in shifts which necessitates hiring yet another two. Even then, an attack by only 50 militants would likely see the pipeline destroyed. This high cost makes it crucial to cooperate with local groups if proper security is to be insured.

Mills noted that European countries have become far less vulnerable to interruptions in supply, which were historically mainly caused by conflicts with Russia. He attributed that to interventions by the European Union to mitigate those vulnerabilities. He noted that in addition to institutional interventions, infrastructural development and market forces are also key in mitigating risks to the energy transit. When it comes to infrastructure, pipelines can be developed to bypass chokepoints, strategic storage can be built to provide countries with an emergency stock of oil and gas, and in some rare cases spare capacity can be employed to fill gaps in supply. Additionally, too often, government action to impose price controls, rationing, and export bans has proven to be counterproductive. It is important to allow the market to correct itself freely, although market mechanisms could be aided by better data.

After a Q&A session that asked about whether there truly are any real threats to Hormuz, the role that multi-national corporations can play in securing energy security, and threats to energy transit stemming from outside the MENA region.  Barakat concluded by thanking the guests and stating that energy security is yet another reason why the region should work to resolve its differences and put an end to regional wars and rivalries.

Video

• Risky routes: Energy transit in the Middle East

Event Materials

• EnergyTransitTranscript0516doc

Editors’ Note: Science diplomacy can help countries solve on-the-ground challenges and improve standards of living for their citizens, writes David Hajjar. But it can also lay groundwork for improving relations through functional, scientific cooperation that is less politicized. This post originally appeared on Lawfare.

In the Middle East, governments and non-state actors alike have tried all forms of diplomacy to solve the challenges they face, with mixed results: shuttle diplomacy by the United States between the Israelis and Palestinians worked for a time, great-power diplomacy over the Syrian civil war largely hasn’t, and direct negotiations with unsavory groups like the Taliban have moved in fits and starts. 

But progress can come from unlikely sources, and science diplomacy—whereby experts collaborate scientifically to address common problems and build constructive international partnerships—has more potential than is often recognized. Science diplomacy can of course help countries solve on-the-ground challenges and improve standards of living for their citizens. But it can also lay groundwork for improving relations in a region often defined by tension (if not outright conflict) through functional, scientific cooperation that is less politicized. 

Efforts in science and technology, on the one hand, and diplomacy on the other, can achieve more if they are thoughtfully merged—rather than siloed. Science diplomacy, therefore, can contribute to peace- and security-building in the Middle East (and with the United States) in unique ways. 

Science and global governance

Across the world, science diplomacy has helped set the stage for advancing foreign policy and global governance goals.

The 2015 nuclear deal between Iran and the P5+1 illuminated how negotiating over and collaborating on science and technology issues can be an important gateway to achieving significant foreign policy goals. Direct (and often very technical) diplomacy between U.S. Secretary of Energy Ernest Moniz and the head of the Atomic Energy Organization of Iran, Ali Akbar Salehi, was key to achieving the framework agreement, as was collaboration between Iranian and Western nuclear scientists more broadly. Provided that the agreement is thoroughly enforced, it’s a major victory for global nuclear nonproliferation efforts—and much credit goes to effective science diplomacy. 

Global efforts to combat climate change are another area in which science diplomacy has had a real impact on policy. The United Nations’ Intergovernmental Panel on Climate Change has become a model for critical science policy research and recommendations. The 2015 conference in Paris brought together hundreds of political leaders and experts to examine the scientific evidence that the globe is warming, discuss remedies, and chart a path forward that can help slow environmental damage. So, science diplomacy was again central—this time in shaping and implementing the global climate governance framework. 

Another area where we have observed substantive gains from science diplomacy is the global management of infectious diseases. The Zika outbreak in Latin America, Ebola epidemic in West Africa, dengue in the Caribbean and Asia, MERS in the Gulf region and in South Korea, and the global threat of pandemic influenza all underscore that international cooperation is key to fighting modern plagues, which spread more rapidly in an era of constant global travel. In some cases more than in others, political leaders have devoted considerable resources to promoting international scientific cooperation—whether in clinical monitoring, medical interventions, research into pathogen biology and diagnostics, and treatments (including vaccine development). In fact, the global response to severe acute respiratory syndrome (SARS) is an example where international collaboration helped identify affected populations and coordinate treatment through the WHO Global Alert and Response System (which has identified new cases in Europe, the Middle East, Australia, Canada, Vietnam, Taiwan, and Hong Kong). The system’s main goal is to send supplies and medical specialists (including epidemiologists), design clinical trials, provide diagnostic tests, identify modes of transmission, and provide treatment. This coordinated response effort has controlled the pandemic.

Science in a fraught region

In the Middle East, opportunities abound for science diplomacy. Not only can this type of approach help solve practical, quality-of-life challenges—from energy to health and beyond—it can bring together expert communities and bureaucracies. In the process, it can contribute to more normalized people-to-people and government-to-government relations. Even at the height of the Cold War, for example, U.S. and Russian nuclear scientists and other experts worked together to monitor each other’s nuclear facilities; even though Moscow and Washington had nuclear-armed intercontinental ballistic missiles aimed directly at each other, bureaucratic cooperation on technical issues became a normal part of the relationship and helped enhance transparency and trust.

In the energy sector, for example, innovation in science and technology will play a crucial role in helping to transition Middle Eastern states in the region away from a dependence on fossil fuels—a broad goal of the Paris accords and a specific strategic goal of states like Saudi Arabia and Iran. Notwithstanding the sectarian disagreements between Iran and Saudi Arabia, both need to address their fast-growing demand for electricity; they need not be in competition with each other. Saudi Arabia currently fuels its own 10 percent annual rise in electricity needs with crude oil, owing to domestic natural dry gas reserves. Iran’s vast gas reserves could be used to meet the kingdom’s growing energy needs, but Iran’s decaying gas fields need $250 billion in major repairs. Many think that if Saudi Arabia used its investment power to revitalize Iran’s gas industry, it would secure the energy it needs to meet demands. The economic benefits of cooperation on energy could promote better relations. Another area of cooperation that can drive the local economies is the Arab Gulf’s first major cross-border enterprise, the Dolphin Gas Project, which was started in 2007. The project involves the transportation of natural gas from Qatar to Oman and to the UAE. Finally, international cooperation between Oman and Iran is developing, where Oman intends to import natural gas from Iran for industrial development. This would require investing in an underwater pipeline from the Iranian coast to Oman. The UAE could do the same to build its economy: import natural gas from Iran, since the pipelines exist. The technical know-how for all these initiatives already exists—to date the main stumbling block has been overcoming regional politics.

Qatari Oil Minister Abdullah bin Hamad al-Attiyah (L) and Dolphin Energy Chief Executive Ahmed Ali Al Sayegh hold a news conference about the inauguration of the Dolphin Energy plant in Doha May 12, 2008. Photo credit: Reuters.

In health, there is also room for mutually-beneficial cooperation. Back in 1996, the U.S. State Department’s Bureau of Near Eastern Affairs helped establish the Middle East Cancer Consortium—that effort continues to help train the next generation of scientists and medical professionals in cancer biology in the region. Other programs have focused on vaccine development for childhood diseases; preventing HIV, malaria, and tuberculosis infections; ending childhood malnutrition; and managing unwanted pregnancies. Programs like these have yielded important advances in public health and have enhanced cooperation between countries like the Palestinian Authority, Egypt, Cyprus, Turkey, and Israel with the United States.

And in a unique cross-sectoral approach, Jordan is host to a promising initiative called the Synchrotron Light for Experimental Science and Application in the Middle East (SESAME). Modeled after the European Organization for Nuclear Research (CERN), SESAME is a partnership between Bahrain, Egypt, Israel, Iran, Jordan, Pakistan, the Palestinian Authority, and Turkey that aims to create research career opportunities that will limit “brain drain” from the region and serve as a model for scientific collaboration.

STEM education: The root of science diplomacy

Science diplomacy has the potential to deliver real dividends that extend beyond the science and technology spaces themselves. When states cooperate on functional, non-politicized (or at least less politicized) issues—whether at the level of non-state scientific communities or at the level of state bureaucracies focused on energy, health, or other issues—they become more accustomed to working together and trusting each other. This can gradually have spillover effects into politics and security arenas.

Science diplomacy doesn’t just happen, though—it requires real efforts on behalf of policymakers and experts. One crucial step is advancing STEM education (science, technology, engineering, and mathematics) to build more robust and diverse expert communities. This is something that President Obama emphasized in his speech at Cairo's Al-Azhar University in 2009. He identified possible areas of cooperation, both within the region and with the United States, including researching and piloting new sources of energy, creating “green” jobs, enhancing communication and informatics, sharing medical information, generating clean water, and growing new crops. 

In some countries in the region, particularly in the Gulf, there are signs of new investment in STEM education and related efforts. For example, Qatar has pledged to spend 3 percent of its GDP on scientific research, and the United Arab Emirates (UAE) has decided to create the world’s first sustainable city. Saudi Arabia created the King Abdullah University of Science and Technology (KAUST) with a $20 billion endowment, $200 million of which has been used to attract scientists and educators from the West. Saudi Arabia, Qatar, and the UAE continue to build and sustain partnerships with European and American universities. 

Interest in science among students and the general citizenry in many Middle Eastern countries remains low, which is problematic at a time when the region’s young people need to compete in a world increasingly centered around STEM. More governments in the region—perhaps with U.S. help—need to increase efforts to attract their young people to STEM education and careers.

International cooperation on STEM issues—led by science diplomats—can strengthen relationships between Middle Eastern states and with the United States. Science and technology disciplines transcend politics, borders, and cultures, and are thus an important bridge between nations. During a time of strained geopolitical relationships, we can focus on making progress in health and disease, food and water security, and other areas—and thereby enhance domestic stability and international security in the process. 

More than a decade after the start of the war in Afghanistan, America continues to face significant challenges in the Middle East. While news of U.S. struggles often dominate foreign policy discussions, Senior Fellow Bruce Riedel says it is important to remember that the United States is also making progress in the region. From the death of Osama bin Laden to an agreement on the use of Afghan military bases for U.S. counterterrorism operations, America is learning from its past mistakes and using these lessons to guide its response to the Arab Spring.

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• We Shouldn't Lose Sight of the Positive Developments in the Middle East

From the Arab-Israeli conflict, to the paradigm shift of the Arab Spring, to attacks on U.S. government personnel in Egypt and Libya, to the potentially explosive situation in Syria--events in the greater Middle East region continue to resonate here at home. In a recent study, “Americans on the Middle East,” Nonresident Senior Fellow Shibley Telhami finds that Americans have a great understanding and concern about Middle East events. Learn more about these findings in this episode of @ Brookings.

Video

• Shibley Telhami: What Americans Think about the Middle East

"At the end of the day, we need to remember that Daesh is more a product of the civil wars than it is a cause of them. And the way that we’re behaving is we’re treating it as the cause.  And the problem is that in places like Syria, in Iraq, potentially in Libya, we are mounting these military campaigns to destroy Daesh and we’re not doing anything about the underlying civil wars.  And the real danger there is—we have a brilliant military and they may very well succeed in destroying Daesh—but if we haven’t dealt with the underlying civil wars, we’ll have Son of Daesh a year later." – Ken Pollack

“Part of the problem is how we want the U.S. to be more engaged and more involved and what that requires in practice. We have to be honest about a different kind of American role in the Middle East. It means committing considerable economic and political resources to this region of the world that a lot of Americans are quite frankly sick of… There is this aspect of nation-building that is in part what we have to do in the Middle East, help these countries rebuild, but we can’t do that on the cheap. We can’t do that with this relatively hands off approach.” – Shadi Hamid

In this episode of “Intersections,” Kenneth Pollack, senior fellow in the Center for Middle East Policy and Shadi Hamid, senior fellow in the Project on U.S. Relations with the Islamic World and author of "Islamic Exceptionalism: How the Struggle over Islam is Reshaping the World," discuss the current state of upheaval in the Middle East, the Arab Spring, and the political durability of Islamist movements in the region. They also explain their ideas on how and why the United States should change its approach to the Middle East and areas of potential improvement for U.S. foreign policy in the region. 

Show Notes

Fight or flight: America’s choice in the Middle East

Security and public order

Islamists on Islamism today

Temptations of Power: Islamists & Illiberal Democracy in a New Middle East

Ending the Middle East’s civil wars

A Rage for Order: The Middle East in turmoil, from Tahrir Square to ISIS

Building a better Syrian opposition army: How and why

With thanks to audio engineer and producer Zack Kulzer, Mark Hoelscher, Carisa Nietsche, Sara Abdel-Rahim, Eric Abalahin, Fred Dews and Richard Fawal.

Subscribe to the Intersections on iTunes, and send feedback email to intersections@brookings.edu.

Introduction

Ohio has already taken important steps to address the state’s ongoing foreclosure crisis, yet the crisis continues, causing distress for thousands of families and individuals, and destabilizing cities, towns and neighborhoods across the state. Therefore, the state, its local governments and private stakeholders need to do still more to deal more effectively with the crisis and its impacts on the state’s housing stock, cities and neighborhoods.

What is often termed the “foreclosure crisis” is actually a multi-dimensional crisis, in which the collapse of the housing bubble, the devastation caused by the lax and often irresponsible credit practices that accompanied and perpetuated that bubble, the resulting freeze on commercial and consumer credit, and the worldwide recession are interwoven, and can only with great difficulty be untangled. In Ohio, those forces are further exacerbated by profound changes to the state’s historical economic underpinnings. Ohio cannot solve the crisis by itself, but it can significantly mitigate its impact on people, neighborhoods, and towns and cities. These mitigating efforts will also help preserve the value of homes and neighborhoods in the state, and place Ohio in a stronger position to benefit from the future economic recovery.

The paper begins with a short summary of current conditions and the actions the state has already taken to address the wave of foreclosures, followed by a discussion of areas for future action. This discussion will address mitigating both the individual and community impacts of foreclosure, but will give particular emphasis to the critical issue of softening the blow of foreclosure on communities, which up to now has been less of a focus for state action.

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