The second wave of Arab uprisings that started in Sudan in December last year and extended to Algeria, Lebanon and Iraq this year have built on past experiences of political transitions during the Arab Spring, both its mistakes and achievements. Protesters from this new wave have already learned five lessons from previous transitions.

The first lesson is that toppling the head of a regime does not mean that the political regime has fallen.  In Tahrir Square on 11 February 2011, Egyptian protesters celebrated the decision of Hosni Mubarak to step down and left the square, thinking his resignation was enough to allow a democratic transition to take place. In contrast, in Sudan and Algeria, protesters continued to demonstrate after the resignation of Abdelaziz Bouteflika and the military-led ousting of Omar al-Bashir.

Protesters understood the lesson that the regime is found not only in the head of the state, but rather in the rules that govern the political sphere. By extension, political change requires changing the rules, not just the names of those in charge of implementing them.

The second lesson is that resorting to violence is the fastest way to end any hope for democratic change. Protesters who decided to take up arms offered their regimes the chance to reframe the political uprisings as civil war, as was the case in Syria. Even when armed groups manage to bring down the regime, their presence endangers the transitional phase afterwards, as is the case in Libya.

Although protesters in Sudan and Iraq have been faced with government violence and repression, they have insisted on their non-violent approach. In Sudan, the protesters responded to the massacre outside of the General Command of the Armed Forces on 3 June by organizing a mass demonstration on 30 June, which put pressure on the military to resume talks with the revolutionary forces.

The third lesson is that once the old regime has fallen, the transition period must be a collective decision-making process in which the opposition has, at least, veto power. The example of Tunisia after 2011 is a case in point. The Higher Authority for Realization of the Goals of the Revolution, Political Reform and Democratic Transition, which formulated the planned course of the transition, included representatives from across the political spectrum and civil society.

Although the military forces in Algeria and Sudan will not cease to play a political role any time soon, this does not have to mean exerting complete control over the transitional period. Sudan could offer a positive example in this regard, if it succeeds in implementing a power-sharing deal according to which a joint civilian-military sovereign council will govern Sudan during the transitional period.

The fourth lesson is that political transitions should achieve agreement on the rules of the game before proceeding to elections. In Egypt after 2011, rushed elections served to divide the political opposition and dramatically increase polarization in society. In this second wave, protesters have perceived elections as a trap which enable old regimes to reproduce themselves with new names.

In both Algeria and Sudan, protesters have resisted attempts by the military to hold elections as soon as possible. In Sudan, the agreement between the revolutionary forces and the military council postponed the elections until after the end of a three-year transitional period of technocratic rule. In Algeria, protesters are taking to the streets every Friday to demonstrate against the authorities’ decision to hold presidential elections in December.

The fifth and final lesson is that the call for change in the region goes beyond electoral democracy and extends to deep socioeconomic reforms. Iraq and Lebanon show this clearly: relatively free and fair elections have already been held but have served only to reinforce corrupt sectarian regimes.

According to the fifth wave of the Arab Barometer, the economic situation and corruption are perceived as the main challenge for Algerians (62.2%), Sudanese (67.8%), Lebanese (57.9%), and Iraqis (50.2%), while democracy is perceived as the main challenge for only 2.3%, 3.9%, 5% and 1.4% respectively.  The experience of the Arab Spring has shown people that democratic measures are only a means to an end.

Unlike in 2011, when the Arab Spring revolts enjoyed broad international support, this second wave is taking place in a hostile environment, with stronger Russian and Iranian presences in the region and an indifferent international climate. But where protesters have the advantage is in experience, and across the region they are clearly adapting their tactics to lessons learned from the early part of the decade.

Since the overthrow of the regime of Muammar Gaddafi in 2011, Libya’s multitude of armed groups have followed a range of paths. While many of these have gradually demobilized, others have remained active, and others have expanded their influence. In the west and south of the country,  armed groups have used their state affiliation to co-opt the state and professionals from the state security apparatus into their ranks.

In the east, the Libyan Arab Armed Forces projects a nationalist narrative yet is ultimately subservient to its leader, Field Marshal Khalifa Haftar. Prevailing policy narratives presuppose that the interests of armed actors are distinct from those of the communities they claim to represent. Given the degree to which most armed groups are embedded in local society, however, successful engagement will need to address the fears, grievances and desires of the surrounding communities, even while the development of armed groups’ capacities dilutes their accountability to those communities.

This roundtable will discuss the findings of a forthcoming Chatham House research paper, ‘The Development of Libyan Armed Groups Since 2014: Community Dynamics and Economic Interests’, which presents insights from over 200 interviews of armed actors and members of local communities and posits how international policymakers might seek to curtail the continued expansion of the conflict economy.

PLEASE NOTE THIS EVENT IS POSTPONED UNTIL FURTHER NOTICE.

Russia’s Middle East policy is driven by a complex mixture of traditional factors (such as the ongoing confrontation with the West) and new trends. The Kremlin is keen to maintain its position as an influential external broker. However, it is not confident Russia would be able to respond effectively if forced into a reactive mode by other regional players. The Kremlin therefore seeks to retain initiative and shape the agenda according to its needs and resources. This makes prediction of Moscow’s next moves in the region a challenging, but not impossible, task.

Nikolay Kozhanov will offer remarks on the changes that have taken place in Russia’s strategy since the publication of his research paper Russian Policy Across the Middle East: Motivations and Methods (2018).

PLEASE NOTE THIS EVENT IS POSTPONED UNTIL FURTHER NOTICE.

Summary

• Libya’s multitude of armed groups have followed a range of paths since the emergence of a national governance split in 2014. Many have gradually demobilized, others have remained active, and others have expanded their influence. However, the evolution of the Libyan security sector in this period remains relatively understudied. Prior to 2011, Libya’s internal sovereignty – including the monopoly on force and sole agency in international relations – had been personally vested in the figure of Muammar Gaddafi. After his death, these elements of sovereignty reverted to local communities, which created armed organizations to fill that central gap. National military and intelligence institutions that were intended to protect the Libyan state have remained weak, with their coherence undermined further by the post-2014 governance crisis and ongoing conflict. As a result, the most effective armed groups have remained localized in nature; the exception is the Libyan Arab Armed Forces (LAAF), which has combined and amalgamated locally legitimate forces under a central command.
• In the west and south of the country, the result of these trends resembles a kind of inversion of security sector reform (SSR) and disarmament, demobilization and reintegration (DDR): the armed groups have used their state affiliation to co-opt the state and professionals from the state security apparatus into their ranks; and have continued to arm, mobilize and integrate themselves into the state’s security apparatus without becoming subservient to it. In the eastern region, the LAAF projects a nationalist narrative yet is ultimately subservient to its leader, Field Marshal Khalifa Haftar. The LAAF has co-opted social organizations to dominate political and economic decision-making.
• The LAAF has established a monopoly over the control of heavy weapons and the flow of arms in eastern Libya, and has built alliances with armed groups in the east. Armed groups in the south have been persuaded to join the LAAF’s newly established command structure. The LAAF’s offensive on the capital, which started in April 2019, represents a serious challenge to armed groups aligned with the Tripoli-based Government of National Accord (GNA). The fallout from the war will be a challenge to the GNA or any future government, as groups taking part in the war will expect to be rewarded. SSR is thus crucial in the short term: if the GNA offers financial and technical expertise and resources, plus legal cover, to armed groups under its leadership, it will increase the incentive for armed groups to be receptive to its plans for reform.
• Prevailing policy narratives presuppose that the interests of armed actors are distinct from those of the communities they claim to represent. Given the degree to which most armed groups are embedded in local society, however, successful engagement will necessarily rely on addressing the fears, grievances and desires of the surrounding communities. Yet the development of armed groups’ capacities, along with their increasing access to autonomous means of generating revenue, has steadily diluted their accountability to local communities. This process is likely to be accelerated by the ongoing violence around Tripoli.
• Communities’ relationship to armed groups varies across different areas of the country, reflecting the social, political, economic and security environment:
• Despite their clear preference for a more formal, state-controlled security sector, Tripoli’s residents broadly accept the need for    the presence of armed groups to provide security. The known engagement of the capital’s four main armed groups in criminal activity is a trade-off that many residents seem able to tolerate, providing that overt violence remains low. Nonetheless, there is a widespread view that the greed of Tripoli’s armed groups has played a role in stoking the current conflict.
• In the east, many residents appear to accept (or even welcome) the LAAF’s expansion beyond the security realm, provided that it undertakes these roles effectively. That said, such is the extent of LAAF control that opposition to the alliance comes at a high price.
• In the south, armed groups draw heavily on social legitimacy, acting as guardians of tribal zones of influence and defenders of their respective communities against outside threats, while also at times stoking local conflicts. Social protections continue to hold sway, meaning that accountability within communities is also limited.
• To varying extents since 2014, Libya’s armed groups have developed networks that enmesh political and business stakeholders in revenue-generation models:
• Armed groups in Tripoli have compensated for reduced financial receipts from state budgets by cultivating unofficial and illicit sources of income. They have also focused on infiltrating state institutions to ensure access to state budgets and contracts dispersed in the capital.
• In the east of the country, the LAAF has developed a long-term strategy to dominate the security, political and economic spheres through the establishment of a quasi-legal basis for receiving funds from Libya’s rival state authorities. It has supplemented this with extensive intervention in the private sector. External patronage supports military operations, but also helps to keep this financial system, based on unsecured debt, afloat.
• In the south, limited access to funds from the central state has spurred armed groups to become actively involved in the economy. This has translated into the taxation of movement and the imposition of protection fees, particularly on informal (and often illicit) activity.
• Without real commitment from international policymakers to enforcing the arms embargo and protecting the economy from being weaponized, Libya will be consigned to sustained conflict, further fragmentation and potential economic collapse. Given the likely absence of a political settlement in the short term, international policymakers should seek to curtail the continued expansion of the conflict economy by reducing armed groups’ engagement in economic life.
• In order to reduce illicit activities, international policymakers should develop their capacity to identify and target chokepoints along illicit supply chains, with a focus on restraining activities and actors in closest proximity to violence. Targeted sanctions against rent maximizers (both armed and unarmed) is likely to be the most effective strategy. More effective investigation and restraint of conflict economy actors will require systemic efforts to improve transparency and enhance the institutional capacity of anti-corruption authorities. International policymakers should also support the development of tailored alternative livelihoods that render conflict economy activities less attractive.

Neither Cameroon nor Malaysia has made progress in tackling illegal logging since 2010, according to new reports from Chatham House. Corruption, lack of political will and a lack of transparency pose problems in both countries. 

Illegal logging is much more widespread in Cameroon, where entrenched corruption, weak institutions and unclear and inappropriate laws are all impeding reform. Although Malaysia does not have such high levels of illegality, problems remain, particularly in the state of Sarawak.

Alison Hoare, Senior Research Fellow at Chatham House, said: 'Illegal logging has a devastating impact on some of the world’s most valuable remaining forests and on the people who live in them and rely on the resources they provide.'

'It is disappointing how little progress Cameroon and Malaysia have made in tackling illegal logging, which exacerbates deforestation, climate change, and poverty. In both countries corruption is a major issue, and the governments need to do much more to address the problem and its underlying drivers.' 

In Cameroon, the principle of transparency has not been accepted within the government, enforcement is weak and information management systems are inadequate. The misuse of  small permits, often granted to allow clearance of forests for infrastructure projects or agricultural expansion, is particularly problematic and could be increasing.

Meanwhile, a huge amount of illegal production takes place in the informal artisanal sector – accounting for around half of all timber produced in the country. Artisanal loggers mainly supply the domestic market, but their timber is also exported.

In Malaysia, governance varies significantly from region to region but there are high levels of deforestation across the country. Expansion of timber, pulp and agricultural plantations is the primary cause of forest loss, with the area of plantations expected to double by 2020. 

Adequate recognition of indigenous peoples’ land rights is also a serious challenge in Malaysia and has held up the negotiation of a Voluntary Partnership Agreement with the European Union. Recent enhanced efforts to tackle corruption, including in Sarawak, could mark a turning point. 

Alison Hoare: 'In both countries, more concerted efforts are needed to tackle corruption, increase consultation, and improve transparency and availability of information. The Cameroonian government also needs to pay more attention to the informal sector and the domestic market.'

Chatham House’s annual London Conference looks at the big issues that confront the world at this key moment in history, and at how to design the new systems and institutions that will shape the international landscape of the future.

Speaker highlights     

• Fernando Henrique Cardoso, President of Brazil (1995-03)
• Kevin Rudd, President, Asia Society Policy Institute; Prime Minister of Australia (2013; 2007-10)
• Yannis Stournaras, Governor, Bank of Greece; Minister of Finance, Greece (2012-14)     
• Børge Brende, Minister of Foreign Affairs, Norway      
• Sergey Karaganov, Foreign policy adviser to the Presidential Administration, Russia (2001-13)     
• Anders Fogh Rasmussen, Secretary General, NATO (2009-14); Prime Minister of Denmark (2001-09)     
• Dr Barham Ahmed Salih, Prime Minister of Iraqi Kurdistan (2009-12); Deputy Prime Minister of Iraq (2006-09) 

This year's London Conference takes places ahead of the G7 summit in Germany.  The themes – demographic changes, urbanization, technological disruptions and resource constraints – are woven throughout the sessions. The aim is not only to discuss the major challenges that these issues present, but also ‘how’ and ‘by whom’ they should be addressed.

Panel discussions will include   

• The Changing Geopolitical Context: Reassessing Priorities and Approaches - In conversation with Kevin Rudd and Fernando Henrique Cardoso     
• What are the implications of the United States substantially retreating from its global leadership role?      
• How are new patterns and habits of digital connectivity changing relations between governments and their populations?     
• Can countries count on technological advances to deliver new routes to economic growth and social inclusion?     
• Is it more important to build national, regional or sectoral successes than to expect answers at the level of global governance?

Click here for full list of speakers >

Click here for full conference agenda >

 

On Tuesday 23 June, Chatham House will publish Syria's Economy: Picking up the Pieces, a comprehensive account of the state of the Syrian economy and its prospects. The paper, by David Butter, associate fellow on the Middle East and North Africa Programme, finds that:

• Syria's economy has contracted by more than 50 per cent in real terms since 2011, with the biggest losses in output coming in the energy and manufacturing sectors. Agriculture has assumed a bigger role in national output in relative terms, but food production has fallen sharply as a result of the conflict.
• Inflation has averaged 51 per cent between January 2012 and March 2015, according to the monthly data issued by the government, and the Syrian pound has depreciated by about 80 per cent since the start of the conflict.
• In the first half of 2015, the regime has shown increasing signs of strain on both the military and the economic fronts. The regime has lost ground to rebel forces, and the Syrian pound has depreciated at the fastest rate since the conflict began.
• Continued support from Iran, in the form of oil supplies and import credits, will come with political and economic conditions.
• The question arises as to whether a dramatic worsening in the economic situation might be the catalyst for the regime’s military collapse or for an externally imposed political settlement against Assad’s wishes; or whether further military setbacks might be the trigger for the government’s economic collapse.

About 90 per cent of refugees living in camps have no access to electricity and many lack any form of lighting at night, says a Chatham House report for the Moving Energy Initiative. Energy poverty in refugee settlements is not on the radar of international initiatives and humanitarian agencies are ill-equipped to deal with the scale of need. 

Heat Light and Power for Refugees: Saving Lives, Reducing Costs zooms in on the energy needs of refugees and displaced people worldwide, and presents the first ever estimates of the volume and costs of what they use.

'The problem goes beyond electricity. 80 per cent of those in camps rely on firewood for cooking and, as a result, we estimate that some 20,000 people die prematurely each year due to the pollution from indoor fires. Exposure to extremes of cold and heat are also killers for people living in flimsy, temporary shelter,' says Glada Lahn, senior research fellow at Chatham House. 'The current lack of provision for energy undermines the fundamental aims of humanitarian assistance,' she adds.

There are nearly 60 million forcibly displaced people in the world, and they pay staggering costs for energy. The 83,277 households living in Dadaab in Kenya, the world’s largest refugee settlement, spent an estimated $6.2 million on firewood last year, which accounts for approximately 24 per cent of their overall household income. (The average UK household spent 4 per cent of its income on energy in 2011.) In Uganda, almost half of refugee households surveyed by the UNHCR skip meals because they do not have enough fuel to cook with.

'The imperative is to find humane, creative and cost-effective ways to respond to the needs of so many individuals, most of whom are women and children.  Improving access to clean, safe and sustainable energy offers a promising way forward,' says Kofi Annan in the report’s foreword.

The report calls for an overhaul in the way that heat, light and power are delivered in humanitarian crises. It makes the case for new partnerships between humanitarian agencies and private providers to increase clean energy access in refugee settlements. Investment in energy infrastructure will also benefit host communities in some of the world’s poorest countries.

'As refugee households spend approximately $2.1 billion on energy each year, developing local markets for energy services could be part of a mix of solutions,' adds Lahn. 'Using green, culturally appropriate technologies could save lives, reduce CO2 emissions by 11 million tonnes per year and radically improve living standards. Introducing even the most basic solutions, such as improved cookstoves and basic solar lanterns, could save $323 million a year in fuel costs.' 

Other findings include:

• Rape and violence against women is common in many unlit camps. Only 4 per cent of women and girls in households in the Goudoubo camp in Burkina Faso would go out after dark due to the lack of streetlights.
• Wood equalling around 49,000 football pitches worth of forest (64,700 acres) is burned by displaced families living in camps each year, mainly in countries suffering severe deforestation, because they have no alternative sources of energy.
• Firewood consumption emits nearly twice as much CO2 as liquid petroleum gas and produces little energy in comparison to its carbon intensity.

International Development Minister Grant Shapps said:

‘Across sub-Saharan Africa, hundreds of millions of people still do not have access to electricity. Women and girls are at risk of violence after dark, families are forced to inhale toxic kerosene fumes, and energy remains unaffordable for many.

‘With the technology in place and investors coming on board, the time to act is now. The UK's Energy Africa campaign is already kick-starting a solar revolution across the continent.

‘Supporting the Moving Energy Initiative is another way Britain can help boost access to clean, reliable and affordable energy. This will transform people’s lives and help achieve the UN’s goal of universal energy access by 2030.’

The project aims to analyze and highlight important issues emanating from Turkey’s geostrategic position and bring a Turkish perspective to important regional developments. Areas of research include Turkey’s evolving relationship with Europe and its contribution to the new ‘silk road’ known as the Belt and Road initiative, aimed at strengthening trade and infrastructure links between Asia and Europe.

Mr Ali Y Koc, vice chairman of Koc Holding, has also joined the Chatham House Panel of Senior Advisers, to which he will bring his experience and perspectives on Turkey and on wider global political, economic and social issues.

Koc Holding is the leading business group in Turkey with extensive activities in the manufacturing, energy, defence and finance sectors. Mr Ali Y Koc is a board member and executive committee member of Koc Holding and chairman of the 1907 Fenerbahce Association and the National Competitiveness Research Association. He is a board member of the Foreign Economic Relations Board (DEIK), Endeavor Turkey and vice president of the Turkish Industrialists' and Business Association (TUSIAD). He is also a member of the Bank of America Global Advisory Council.

Robin Niblett, director of Chatham House, said: 'We are grateful to Mr Ali Y Koc and Koc Holding for supporting this initiative, which builds on our established track record of work on Turkey. Turkey plays an increasingly important strategic role, and through this project, Chatham House will be able to expand its analysis and activities in this area. I am also delighted that Chatham House will benefit from the input and expertise of Mr Koc as a member of the institute’s Panel of Senior Advisers.'

Mr Ali Y Koc said: 'Koc Holding is pleased to establish a long-term partnership with Chatham House and support a distinctive research project on Turkey at a world-leading think-tank. We look forward to sharing our insights on Turkey and other significant issues in international affairs among such a distinguished globally-renowned group of individuals in foreign policy, business and civil society on the Panel of Senior Advisers.'

The situation in Ukraine remains in flux and despite Europe and the US toughening sanctions on Russia, President Putin continues to increase the scope of Russia’s involvement in the conflict between the Ukrainian government and the separatists. It remains unclear how far Putin is willing to go, what his broader regional ambitions are, and what he will do if forced further into a corner by Western actions. In this time of uncertainty and instability it is therefore vital to assess how the transatlantic partners should respond to this increasingly precarious situation. 

At this all-day event, the group will discuss how US policy towards Russia is changing, what this means for Europe and, subsequently, how Europe should respond. 

Attencance at this event is by invitation only.

The event is part of the Transatlantic Strategy Group on the Future of US Global Leadership run jointly with the German Marshall Fund of the United States. Over the course of a year, this group will come together to discuss how US policy is changing on key issues and the implications for Europe. This project is supported by the Fritz Thyssen Stiftung.

With the Middle East in chaos and the future of many states increasingly uncertain, there is a large amount of attention as to how policy-makers in Europe and the US should respond. In particular, many in Europe are unsure of long-term US policy in light of competing American priorities, budgetary constraints and a public adverse to committing further resources abroad. In this context, it is important that European and American policy-makers understand each other’s positions.

At this all-day event, a group of experts will discuss how US policy towards the Middle East is changing, what this means for Europe and, subsequently, how Europe should respond. 

Attendance at this event is by invitation only.

The workshop is held as part of the Transatlantic Strategy Group on the Future of US Global Leadership run jointly with the German Marshall Fund of the United States. Over the course of a year, this group will discuss how US policy is changing on key issues and the implications for Europe. This project is supported by the Fritz Thyssen Foundation, with support for this event provided by the Delegation of Strategic Affairs of the French Ministry of Defence and the British Embassy in Paris.

Europe and the United States have dominated global institutions for over 70 years. However, as the emerging markets take up a greater share of the global economy it is becoming increasingly difficult for the transatlantic powers to maintain the current system. This event will examine the changes needed in order to avoid a collapse of the current system.

The workshop is held as part of the Transatlantic Strategy Group on the Future of US Global Leadership run jointly with the German Marshall Fund of the United States. Over the course of a year, this group will discuss how US policy is changing on key issues and the implications for Europe. This project is supported by the Fritz Thyssen Foundation, with support for this event provided by the Bertelsmann Foundation. 

While the American election cycle could be perceived as an occasionally amusing distraction, the rise of new factions and sentiments among the electorate will have an impact not just in America’s domestic politics but also with respect to its role in the world. Recent polling by the Pew Research Center shows clearly the desire among many Americans for a different international engagement for the US, one that could have significant implications for America’s allies.

Polling

To date, the campaign rhetoric of both the Republican and Democratic contenders for the White House has raised questions about America’s continuing global commitment.

But what does the public think? The Pew Research Center has recently released its periodic survey of how Americans view America’s place in the world. The results suggest that stereotypes of Americans’ isolationism or protectionism do not capture the nuance in public sentiment. Wariness of international engagement coexists with assertiveness on some issues and a belief that the US is a force for good in the world. And these views often divide along partisan lines and between generations.

A majority of Americans (57%) think the U.S. should deal with its own problems and let other countries deal with theirs as best they can, a sentiment that has increased from 46% in 2010. Moreover, roughly two-thirds say ‘we should not think so much in international terms but concentrate more on our own national problems’. In part this may be the case because a plurality of Americans thinks the United States does too much (41% too much, 27% too little) in helping solve world problems.

The fact that six-in-ten Americans believe that problems in the world would be even worse without US involvement will not reassure many non-Americans who care deeply about how and where the US is engaged, not just that it is.

American isolationism is a partisan affair. Republicans (62%) are far more likely than Democrats (47%) to voice the view that the US should deal with its own problems. Notably, about two-thirds of registered Republicans or Republican-leaning independents who favour Donald Trump (68%) express such isolationist sentiments, as do more than half of the Democratic backers of Sen. Bernie Sanders (54%). At the same time, over half of registered Democrats and Democratic-leaning independents who favour Hillary Clinton (52%) believe the US should help other countries deal with their problems.

The US has often been seen by its allies as acting in a unilateralist fashion, but the polling is more nuanced than this. About half (51%) believe that the US should take into account the views of its major allies when deciding its foreign policies. However, of more concern for America’s allies (and potentially adversaries), roughly four-in-ten (42%) believe Washington should go it alone in international matters.

Despite Trump’s criticisms, 53% of the American public holds a positive view of NATO and 77% voice the view that US membership in the security alliance has been a good thing for the United States.

In addition to some wariness with regards to engaging internationally in security arenas, Americans are also generally wary of global economic engagement – protectionist sentiment is rising. Only 44% believe such US involvement is a good thing; more (49%) say such engagement is bad, lowering wages and costing jobs. These views also differ along partisan lines with more on the right than left thinking US involvement in the world economy has been a bad thing. Trump supporters are even more against economic globalization.

Rising scepticism

The results do not show an unambiguous move towards more American isolationism or unilateralism. But the trends broadly show that the American public is moving towards, as President Obama put it in 2012, a focus on ‘nation building at home’. It should come as no surprise – President Obama has presided over a period in which the US has increasingly limited its extraterritorial ambitions to those that more directly affect its vital national interests. It is therefore worth noting that this more limited engagement is one that is, broadly, supported by the public on both sides of the aisle.

There are, as have been noted, partisan differences. But the next president will govern over all Americans not just those from their own party. They will have to function in the context of an American public, the majority of whom wants the US to deal with its own problems, letting other countries manage as best they can. While who becomes president clearly matters – they have the capacity to lead their populations in certain directions - the rising scepticism among many Americans for investing in the globalized world will resonate regardless of who takes office.

The implications for America’s allies are significant. For those issues that are not directly of concern to the United States, longstanding partners are going to have to find ways to manage on their own or with less American support. And even on those issues that are of direct national interest, they might find the US less sensitive to their interests and concerns. This could hold true not just in the realm of security but on economic issues also – if America becomes more protectionist, others will surely follow.  

Many of America’s allies have perceived the United States to be an unreliable ally in recent years. Asian partners, such as Japan and South Korea, have started to take more responsibility for their own security and are working to build additional partnerships with neighbours. European allies have been, at times, disappointed by what they perceive to be a less engaged America, such as in Libya and Syria. If the next president follows the public majority, these allies will need to get used to this new role for the United States.

This article has been published jointly with Real Clear World.

To comment on this article, please contact Chatham House Feedback

With Britain’s decision to leave the EU, the clouds of uncertainty hanging over the proposed US-EU free trade deal (known as the Transatlantic Trade and Investment Partnership or TTIP) have become darker. The negotiations were formally launched three years ago and have stalled because of transatlantic differences (for instance over issues of investor protections and public procurement) as well as growing public opposition. For now, both the US and the EU negotiators are determined to weather the storm and continue talks when they meet in Brussels from 11-15 July.

The result of the UK’s EU referendum will blow a strong wind into the face of TTIP negotiators on three fronts. First, the Brexit vote will delay the TTIP talks as EU officials will focus their attention and political capital on the future UK-EU relationship. Once the UK government triggers Article 50 of the Lisbon Treaty, both sides have two years to sort out the separation proceedings. Only after it has become clear what Britain’s relationship with the EU will look like will the European side stop navel-gazing. The TTIP negotiations will likely continue in the meantime, but will be put on the back-burner.

Second, any progress on TTIP will require clarity on what both sides are bringing to the negotiating table. But until the final nature of the UK-EU relationship is known, it will be difficult for the American side to assess exactly how valuable the access to the remaining EU market is. This raises the question of whether American negotiators will put forth their best offers if they don’t know what benefits they will obtain for making concessions.

Third, with Britain’s vote to leave the EU, TTIP has just lost one of its greatest cheerleaders. French and German officials are increasingly expressing concerns about TTIP. Within three days of the Brexit vote, French Prime Minister Manuel Valls dismissed the possibility of a US-EU trade deal, stating TTIP was against ‘EU interests’. In addition, 59 per cent of Germans oppose TTIP – up from 51 per cent – according to the most recent Eurobarometer survey. Britain’s voice for further trade liberalization will be sorely missed by American negotiators eager to strike a deal.

Despite the dark Brexit clouds on the TTIP horizon, there might be a silver lining. Britain’s decision to leave the EU could bring some benefits to the US-EU trade talks in two ways. First, financial services regulation might no longer be a sticking point in the TTIP negotiations. Given London’s role as a financial centre, the UK had insisted on including a financial services chapter in the trade deal. The US, however, has resisted this. The removal of this friction could help move the TTIP negotiations along.

Second, European trade negotiators will no longer have to address British fears that TTIP could put the National Health Service (NHS) at risk. Much of the TTIP-debate in Great Britain has focused on how this deal might impact the NHS. Opponents of TTIP have argued that including healthcare in the agreement could lead to privatization and ultimately the death of the NHS. EU Trade Commissioner Cecilia Malmström spent resources and energy in correcting these misconceptions. UK withdrawal from the EU means that she can now focus on fighting other myths surrounding TTIP, which could potentially help advance the trade deal.

For now and the immediate future, Britain will remain a member of the EU and the European Commission will continue to negotiate trade deals on behalf of all 28 member states. Both the US and EU negotiators are committed to advancing the trade deal despite Brexit. The British decision to leave the EU has not weakened the case for TTIP. Speaking on the outcome of the EU referendum, United States Trade Representative Michael Froman said ‘the economic and strategic rationale for TTIP remains strong’. And his counterpart Cecilia Malmström went even further, saying that the British decision to leave the EU creates more of an impetus for TTIP to be finished this year.

Though this timeline is unlikely to be met, TTIP is likely to survive the British decision to leave the EU. However, Brexit is a serious blow that will probably push back the conclusion of TTIP by at least two years. Any deal will need to take into account the future nature of the UK-EU trade deal, which may not be known before 2018. Meanwhile, elections in Germany and France (two countries with strong public opposition to TTIP) will take place in 2017. On the other side of the Atlantic, the US presidential election adds yet another layer of uncertainty as the trade policy of the next administration remains unknown. When US and EU trade negotiators meet again this week, they should not be too worried about the Brexit storm but rather the changing climate for TTIP in France, Germany and the US.

To comment on this article, please contact Chatham House Feedback

Summary

• The United States and the European Union are deeply integrated economically in terms of movement of goods, services and capital across the Atlantic, but this is not matched by the mobility of labour. Freer movement of high-skilled workers across the Atlantic has a potentially critical role to play in maintaining and strengthening the bilateral economic relationship.
• Both the US and EU seek to attract high-skilled labour through the use of temporary visa programmes. Various routes are available for highly skilled workers from the EU to temporarily work in the US (for instance, through the H-1B visa for foreign nationals in ‘specialty occupations’, as well as other visa categories for treaty traders and investors, intra-company transferees, and international students seeking work authorization in the US before or after graduation). The main ways for highly skilled workers from the US to temporarily work in EU member states are through EU-wide schemes that apply in 25 out of the 28 member states (for holders of EU Blue Cards or intra-company transferees); or via member states’ parallel national schemes.
• The experiences of US and EU employers and workers under the US H-1B programme and the EU’s Blue Card scheme differ greatly. The EU Blue Card scheme avoids many of the drawbacks of the H-1B visa. It does not have an annual cap on the number of visas issued. It also grants greater autonomy to the worker by not requiring the employer to sponsor long-term residence, by providing greater flexibility to switch employment, and by having a longer grace period for visa-holders to find new employment after dismissal.
• The US visa system hampers America’s economic growth. Restrictive policies such as an annual limit on the number of H-1B visas issued, and the associated uncertainty for employees and employers, hinder the ability of US companies to expand and innovate. The complex and costly visa application process is a particular burden for small and medium-sized enterprises. Problems around the timely availability of visas frustrate investors both from the US and from abroad (including from the EU). European firms face difficulties in acquiring visas for intra-company transferees, and not all EU member states have access to the treaty trader and treaty investor visa categories. At times, this impedes foreign direct investment and restricts US job creation. In addition, current policies hinder the economy’s retention of EU and other graduates of US universities. This is of particular concern given that skilled graduates have a critical role to play in addressing the US’s growing shortage of workers in the science, technology, engineering and mathematics (STEM) fields.
• Given the comparability of US and EU wages and labour markets, US concerns about foreign workers ‘stealing’ their jobs or depressing wages generally do not apply to EU citizens. On the contrary, a more open immigration policy for high-skilled workers – in particular for EU citizens – would benefit the US economy.
• Efforts to reform visa systems for high-skilled labour are under way in both the US and EU. In order to facilitate the movement of highly skilled workers across the Atlantic, this research paper recommends (1) creating a special visa for highly skilled EU citizens to work temporarily in the US; (2) extending the availability of treaty trader and investor visas to all EU member states; and (3) increasing efforts to eliminate fraud and abuse in the H-1B system. These measures could potentially help to create more investment, jobs and economic growth in the US.

Even though most African states have signed and ratified the Framework Convention on Tobacco Control (FCTC), a global treaty to limit tobacco use, African states have been slow to pass and implement tobacco control policies like regulations on sales, smoke-free environments and taxes. This article examines how the ineffectiveness of local tobacco-control advocacy contributes to this suboptimal outcome. It asserts that the disconnect between the global tobacco-control advocacy network and local advocates shapes this ineffectiveness. With funding and direction predominately from the Bloomberg Initiative, local advocates emulate the funders' goal of achieving quick, measurable policy results. Their reliance on the network drives African advocates to strive to pass legislation, even in difficult political climates, and to remake their agendas when funders change their priorities. They also emulate the network's focus on evidence-based arguments that stress epidemiological data and biomedical interventions, even when this issue frame does not resonate with policy-makers. Financial dependence can draw local advocates into expectations about patronage politics, undermine their ability to make principled arguments, and lead them to downplay the ways that their home country's socioeconomic and cultural contexts affect tobacco use and control. Based on key informant interviews with African advocates, media analysis and the case-studies of Ghana and Tanzania, the article broadens the study of philanthropy in global health, it adds an African perspective to the literature on global health advocacy, and it deepens knowledge on power dynamics between external funders and local actors in the realms of health and development.

Linked to the call for a global response to the Covid-19 pandemic that I, Robin Niblett and Creon Butler have outlined, the case for a specific dramatic economic policy gesture from many policymakers in large economies is prescient.

It may not be warranted from all G20 nations, although given the uncertainties, and the desire to show collective initiative, I think it should be G20 driven and inclusive.

We need some sort of income support for all our citizens, whether employees or employers. Perhaps one might call it a truly People’s QE (quantitative easing).

Against the background of the previous economic crisis from 2008, and the apparent difficulties that more traditional forms of economic stimulus have faced in trying to help their economies and their people - especially against a background of low wage growth, and both actual, and perception of rising inequality - other ideas have emerged.

Central banks printing money

Both modern monetary theory (MMT) and universal basic income (UBI) essentially owe their roots to the judgement that conventional economic policies have not been helping.

At the core of these views is the notion of giving money to people, especially lower income people, directly paid for by our central banks printing money. Until recently, I found myself having very little sympathy with these views but, as a result of COVID-19, I have changed my mind.

This crisis is extraordinary in so far as it is both a colossal demand shock and an even bigger colossal supply shock. The crisis epicentre has shifted from China - and perhaps the rest of Asia - to Europe and the United States. We cannot expect policies, however unconventional by modern times, such as the dramatic monetary steps announced by the Federal Reserve Board and others like it, to put a floor under this crisis.

We are consciously asking our people to stop going out, stop travelling, not go to their offices - in essence, curtailing all forms of normal economic life. The only ones not impacted are those who entirely work through cyberspace. But even they have to buy some forms of consumer goods such as food and, even if they order online, someone has to deliver it.

As a result, markets are, correctly, worrying about a collapse of economic activity and, with it, a collapse of companies, not just their earnings. Expansion of central bank balance sheets is not going to do anything to help that, unless it is just banks we are again worried about saving.

What is needed in current circumstances, are steps to make each of us believe with high confidence that, if we take the advice from our medical experts, especially if we self-isolate and deliberately restrict our personal incomes, then we will have this made good by our governments. In essence, we need smart, persuasive People’s QE.

Having discussed the idea with a couple of economic experts, there are considerable difficulties with moving beyond the simple concept. In the US for example, I believe the Federal Reserve is legally constrained from pursuing a direct transfer of cash to individuals or companies, and this may be true elsewhere.

But this is easily surmounted by fiscal authorities issuing a special bond, the proceeds of which could be transferred to individuals and business owners. And central banks could easily finance such bonds.

It is also the case that such a step would encroach on the perception and actuality of central bank independence, but I would be among those that argue central banks can only operate this independence if done wisely. Others will argue that, in the spirit of the equality debate, any income support should be targeted towards those on very low incomes, while higher earners or large businesses, shouldn’t be given any, or very little.

I can sympathise with such spirit, but this also ignores the centrality of this particular economic shock. All of our cafes and restaurants, and many of our airlines, and such are at genuine risk of not being able to survive, and these organisations are considerable employers of people on income.

It is also the case that time is of the essence, and we need our policymakers to act as soon as possible, otherwise the transmission mechanisms, including those about the permanent operation of our post World War 2 form of life may be challenged.

We need some kind of smart People’s QE now.

Since the 2018 economic crisis, when the value of the lira plummeted and borrowing costs soared, Turkey’s economy has achieved a miraculous ‘V-shaped’ economic recovery from a recession lasting three quarters to a return back to quarterly growth above 1 per cent in the first three months of 2019.

But this quick turnaround has been built on vast amounts of cheap credit used to re-stimulate a consumption and construction boom. This so-called ‘triple C’ economy generated a rapid growth spurt akin to a modestly able professional sprinter injected with steroids.

This has made the currency vulnerable. The lira has steadily depreciated by 11 per cent against the US dollar since the beginning of 2019 and crossed the rate of 6 lira versus the US dollar on 7 February. And there are further warning signs on the horizon.

Credit bonanza

Statistics reveal that Turkish domestic credit grew by around 13 per cent on average throughout 2019.  The credit bonanza is still ongoing. Mortgage-backed home sales jumped by a record high of 600 per cent last December alone and the 2019 budget deficit catapulted by 70 per cent due to higher government spending.

Turkey’s central bank fuelled this credit expansion by cutting interest rates aggressively to below inflation and, since the start of this year, purchasing lira-denominated bonds equivalent to around one-third of total acquisitions last year to push yields lower.

Equally, it has linked bank lending to reserve requirements – the money that banks have to keep at the central bank – to boost borrowings via state and private banks. Banks with a ‘real’ loan growth (including inflation) of between 5 and 15 per cent enjoy a 2 per cent reserve ratio on most lira deposits, which authorities adjusted from an earlier band of 10-20 per cent that did not consider double-digit inflation.

Cumulatively, bond purchases (effectively quantitative easing) and reserve management policies have also contributed to eased credit conditions.

Commercial banks have also reduced deposit rates on lira accounts to less than inflation to encourage consumption over saving. Together with low lending rates, the boost to the economy has flowed via mortgages, credit card loans, vehicle leasing transactions and general business borrowings.

Accordingly, stimulus is at the forefront of the government’s economic approach, as it was in 2017 and 2018. It does not seem to be implementing structural change to re-orient growth away from consumption towards productivity. 

In addition, governance is, again, a central issue. President Recep Tayyip Erdogan’s near total monopolization of policymaking means he guides all domestic and external policies. He forced out the previous central bank governor, Murat Cetinkaya, in July 2019 because he did not share the president’s desire for an accelerated pace of interest rate reductions.

New challenges

Despite the similarities, the expected future financial turbulence will be materially different from its 2018 predecessor in four crucial respects. 

Firstly, foreign investors will only be marginally involved. Turkey has shut out foreign investors since 2018 from lira-denominated assets by restricting lira swap arrangements. Unsurprisingly, the non-resident holdings of lira bonds has plummeted from 20 per cent in 2018 to less than 10 per cent today.

Secondly, the Turkish government has recently introduced indirect domestic capital controls by constraining most commercial transactions to the lira rather than to the US dollar or euro to reduce foreign currency demand in light of short-term external debt obligations of $191 billion.

Thirdly, the Turkish state banks are intervening quite regularly to soften Lira volatility, thereby transitioning from a ‘free float’ to a ‘managed float’. So far, they have spent over $37 billion over the last two years in a futile effort to buttress the lira. This level of involvement in currency markets cannot be maintained.

Fourthly, the Turkish state is being far more interventionist in the Turkish stock exchange and bond markets to keep asset prices elevated. Government-controlled local funds have participated in the Borsa Istanbul and state banks in sovereign debt to sustain rallies or reverse a bear market.  

All these measures have one running idea: exclude foreign investors and no crisis will recur. Yet, when the credit boom heads to a downturn sooner or later, Turks will probably escalate lira conversions to US dollars; 51 per cent of all Turkish bank deposits are already dollar-denominated and the figure is still rising.

If Turkey’s limited foreign reserves cannot satisfy the domestic dollar demand, the government may have to impose comprehensive capital controls and allow for a double digit depreciation in the value of the lira to from its current level, with significant repercussions on Turkey’s political stability and economic climate.

To avoid this scenario, it needs to restore fiscal and monetary prudence, deal the with the foreign debt overhang in the private sector and focus on productivity-improving economic and institutional reforms to gain the confidence of global financial markets and Turks alike.

Ample evidence exists that China was caught off guard by the Trump administration's onslaught of punishing acts—the trade war being a prime, but far from the only, example. This article, in addition to contextualizing their earlier optimism about the relations with the United States under President Trump, examines why Chinese leaders and analysts were surprised by the turn of events. It argues that three main factors contributed to the lapse of judgment. First, Chinese officials and analysts grossly misunderstood Donald Trump the individual. By overemphasizing his pragmatism while downplaying his unpredictability, they ended up underprepared for the policies he unleashed. Second, some ingrained Chinese beliefs, manifested in the analogies of the pendulum swing and the ‘bickering couple’, as well as the narrative of the ‘ballast’, lulled officials and scholars into undue optimism about the stability of the broader relationship. Third, analytical and methodological problems as well as political considerations prevented them from fully grasping the strategic shift against China in the US.