The year 2015 was a big one for global development policy debates, marking the end of the Millennium Development Goals (MDGs) and the launch of the new Sustainable Development Goals (SDGs), also known as the “Global Goals.” But how much did major media pay attention?

Last September, Christine Zhang and I published a working paper that examined mentions of the MDGs across major English-language press and academic outlets from 2000 through 2014. We blogged highlights from the original paper here. 

More recently, we updated some of the results to account for last year’s major MDG-SDG debates and events. Figure 1 adds 2015 newspaper data on the MDGs and also includes SDG mentions over the entire time period.

Figure 1: MDG and SDG mentions across 12 major newspapers, 2000-2015

Note: The 12 newspapers included are the Los Angeles Times (USA), The New York Times (USA), USA Today, and The Washington Post (USA), the Financial Times (UK), The Guardian (UK), The Independent (UK), The Daily Telegraph (UK), The Economist (UK), The Globe and Mail (Canada), the South China Morning Post (Hong Kong SAR), and The Sydney Morning Herald (Australia). Source: LexisNexis, authors’ calculations.

Here are three key takeaways from the new graph:

• First, by measure of article counts, 2015 was the second most prominent year for media coverage of the interlinked MDG-SDG agendas. But it only saw 62 percent as much coverage as the MDGs received in 2005, the year of the U.N. Millennium Project’s final report (January), the Gleneagles G-8 summit (July), and the U.N. World Summit (September). 

• Second, global summits have consistently helped to ramp up media attention and debate. The years 2005, 2008, 2010, and 2015 all stand out as the top years for references—the same years in which the U.N. convened major summits linked to the MDGs and, in 2015, the SDGs. But U.N. summits do not guarantee attention. Notably, the 2012 Rio+20 summit that initially called for the SDGs did not cause a big splash in the media outlets examined.

• Third, recent years saw a discernible transition from MDG references to SDG references. By 2015, fully 41 percent of the relevant articles referenced only the SDGs, 30 percent mentioned both the SDGs and the MDGs, while only 29 percent mentioned the MDGs alone. 

To be clear, these results do not provide a complete assessment of MDG-SDG media references in recent years, especially because social media and other new digital technologies now account for such a large share of public debate. (Note that the graph also excludes developing country newspapers, some of which we examined in the original working paper and similarly updated with 2015 results, but those do not make much difference to the overall story.) Thus one should not consider Figure 1 a definitive analysis of whether SDG advocates were successful in their public outreach campaigns last year.  From a research perspective, the simple new-ness of “new media” renders long-term comparisons difficult. Restricting the data sample to print media offers one way to benchmark apples-to-apples coverage across the period of interest back to 2000.

That said, a seasoned media observer once suggested to me that traditional news outlets are inherently less connected to the bottom-up nature of emerging SDG conversations, and hence less likely to cover the SDGs accurately than new media channels in which user-generated content helps to drive the conversation. It’s an interesting hypothesis worth testing. 

At a minimum, 2015 was a significant year for public conversations about the MDGs and SDGs, even if it might not have matched the peak year of 2005. An interesting line of research could seek to explain why.  In any case, for analysts of the new SDGs, more sophisticated forms of global media benchmarking will undoubtedly be in order through to the new deadline of 2030. 

This week, the richest business leaders and investors from around the world will gather in Davos, Switzerland, for the annual meeting of the World Economic Forum. In keeping with tradition, a small portion of the agenda will be devoted to global development and the plight of people living at the other end of the global income distribution.

Philanthropy is one way of linking the fortunes of these disparate communities. What if some of the mega-rich could be persuaded to redistribute their wealth to the extreme poor?

This question may feel hackneyed, but it deserves a fresh hearing in light of a dramatic reduction in the global poverty gap over the past several years (Figure 1). The theoretical cost of transfers required to lift all poor people’s income up to the global poverty line of $1.90 a day stood at approximately $80 billion [1] in 2015, down from over $300 billion in 1980. (Values expressed here are in 2015 market dollars.)

Source: Authors’ calculations based on OECD, World Bank

This reduction can be unpacked into two parts. The first is a steep decline in the number of people living below the global poverty line. This is increasingly recognized as one of the defining features of the era. A U.N. goal to halve the poverty rate in the developing world between 1990 and 2015 was nearly achieved twice over. The second and lesser-known factor is the shrinking average distance of the world’s poor from the poverty line. In 1980, the mean daily income of those living below $1.90 was $1.09. In 2012 it was 25 cents higher at $1.34. (Values expressed here in 2011 purchasing power parity dollars.)   

Despite this good news, global poverty still demands attention. Hundreds of millions of people continue to suffer this most acute form of deprivation. In several countries, the prospects for ending poverty over the next generation, in line with a recently endorsed successor U.N. goal, appear challenging at best.

Figure 1 illustrates that in 2006, global aid flows exceeded the cost of the global poverty gap for the first time. This suggests that the elimination of extreme poverty should be possible simply through a more efficient allocation of aid. However, this confuses foreign aid’s goals and functions. The bulk of official foreign aid is used in the provision of public goods, such as physical infrastructure and strengthening institutions. Only 2 percent is directed to social payments and their administration. If the elimination of extreme poverty is to be achieved through targeted transfers, it depends on sources other than foreign aid.

The main source of transfers to the poor is welfare programs run and financed by developing countries themselves. These social safety nets have emerged as an increasingly prominent instrument in the toolkit of developing economy governments. Eighty-three percent of developing economies employ unconditional cash transfer programs, although many are small in scale. Several countries are in the process of building the apparatus for more accurate targeting and authentication through the assembly of beneficiary registries and the rolling out of identity programs. In at least 10 developing countries, social safety nets have succeeded in establishing a social floor by lifting all those people under the poverty line up above the threshold. In the vast majority, however, safety nets are insufficiently targeted or generous for that purpose, reflecting not only resource constraints, but also political choices that can be resistant to change.

A complementary approach is to consider the role of private mechanisms and wealth. NGOs were among the original pioneers of cash transfers in the developing world. More recently, the NGO GiveDirectly has designed a compelling new method of charitable giving that sends money directly to the poor using digital monitoring and payment technology. Its approach has received strong endorsements from independent charity assessors and has been validated by impact evaluations. Yet the scale of its existing donations remains tiny relative to the global poverty gap.

This is where Davos’s global elite could come into play: What difference could a philanthropic donation from the world’s richest people make?

To explore this question, we begin by identifying those developing countries that are home to a least one billionaire. (Our analysis is restricted to billionaires by data, not by the potential largesse of the world’s multi-millionaires. We focus our attention on billionaires in the developing world given the traditional focus of philanthropy on domestic causes.) Let’s assume that the richest billionaire in each country agrees to give away half of his or her current wealth among his or her fellow citizens, disbursed evenly over the next 15 years, roughly in accordance with the Giving Pledge promoted by Bill Gates. That money would be used exclusively to finance transfers to poor people based on their current distance from the poverty line. Transfers would be sustained at the same level for the full 15-year period with the aim of providing a modicum of income security that might allow beneficiaries to sustainably escape from poverty by 2030.

Table 1 summarizes the key results. In each of three countries—Colombia, Georgia, and Swaziland—a single individual's act of philanthropy could be sufficient to end extreme poverty with immediate effect. Swaziland is an especially striking case as it is among the world’s poorest countries with 41 percent of its population living under the poverty line. In Brazil, Peru, and the Philippines, poverty could be more than halved, or eliminated altogether if the billionaires could be convinced to match Mark Zuckerberg’s example and increase their donation to 99 percent of their wealth.

Source: Authors’ calculations based on Forbes, International Monetary Fund, PovcalNet, and the World Bank. Poverty rates post-transfer calculated based on average distance of the poor from the poverty line.  

In other countries—Nigeria, Tanzania, Uganda, and Angola—the potential impact on poverty is only modest. A number of factors account for differences between countries, but two factors that penalize African countries are especially noteworthy. First, the depth of poverty in Africa remains high, with 15 percent of the population living on less than $1.00 a day; and second, Africa has relatively high prices compared to other poor regions, which means more dollars are required to deliver the same amount of welfare.  

For those nations that have more than one billionaire, an alternative scenario is that the country’s club of billionaires makes the pledge together and combines resources to tackle domestic poverty. This would end poverty in China, India, and Indonesia—countries that rank first, second, and fifth globally in terms of the absolute size of their poor populations. The last two columns of Table 2 describe the results.

Table 2. The potential impact on poverty of collective billionaire giving pledges

Source: Authors’ calculations based on Forbes, IMF, PovcalNet, and the World Bank. Poverty rates post-transfer calculated based on average distance of the poor from the poverty line.

This exercise is of course laden with simplifying assumptions. [2] It is intended to provoke discussion, not to provide definitive figures. Moreover, it is open to debate whether transfers represent the most cost-effective way of sustainably ending poverty, the extent to which transfers ought to be targeted, the efficacy of building private transfer programs alongside public safety nets, and whether cash transfers represent the most appropriate use of billionaires’ philanthropy.  

What is less contestable is that a falling global poverty gap presents an opportunity for more systematic efforts for poverty reduction. This raises the question: How low does the poverty gap have to fall before we explicitly design programs to bring the remaining poor above the poverty line? We would argue that we are already beyond this point, not least in countries that remain a long way from ending poverty. Were a billionaire at Davos to commit to using his or her wealth in this fashion, it could trigger a powerful demonstration effect of innovative solutions—not just for other billionaires, but for countries that are currently at risk of being left behind.

[1] The cost of the global poverty gap in 2015 is an overestimate compared with the World Bank’s tentative poverty estimate for the same year. This is due to a different treatment of Nigeria. For this exercise, we rely on data from the 2009/10 Harmonized Nigeria Living Standards Survey reported in PovcalNet, despite its well-documented problems, whereas the Bank draws on the 2010/11 General Household Survey.

[2] Simplifying assumptions include: zero administrative costs in identifying the poor, assessing their income, and administering payments with no leakages, or no portion of those costs being borne by billionaires; the efficacy of administering miniscule transfers to those who stand on the margin of the poverty line; and no change in the cost of closing the poverty gap in a country over time, whether due to population growth, an increase or decrease in poverty, or a change in prices relative to the dollar.   

If the vision of the Sustainable Development Goals (SDGs) is that Mother Earth is heading for trouble and we must collectively solve global problems, then the underfunding of global public goods (GPGs) must be addressed. As the world becomes increasingly globalized, the need for global public goods increases: from action on climate change, financial stability, limiting the spread of diseases, management of conflicts, responding to natural disasters, terrorism, and cyber-warfare. At some level even the eradication of extreme poverty and more inclusive and sustainable development could be considered a global public good because more poverty and unequal development breeds conflict, increases environmental stress, state failure, terrorism, and piracy, thereby increasing the need for the global public goods required to address these issues.

Missing in the recently agreed Addis Ababa Action Agenda (AAAA) and in the Paris Conference of Parties (COP21) are steps that should be taken at a global level that will positively impact many countries, such as:

• A global set of standards on migration to curb exploitation and human rights standards for the migrant population;
• Better coordination of monetary and fiscal policies so as to avoid huge volatility in financial markets, which have large costs on vulnerable countries;
• Strengthened global disaster response mechanisms to handle increasing climate volatility and natural disasters;
• No agreement on a global tax institution demanded by many developing countries and civil society groups; and,
• No progress on carbon taxation.

There is considerable underfinancing of GPGs as it is difficult to get countries to pay for activities outside their borders. Official Development Assistance (ODA) has fallen well short of the agreed target of 0.7 percent of GDP—and in fact is closer to just 0.2 percent. GPG funding from ODA is estimated at only about 10 percent of the total. This problem even afflicts other sources of financing. Multilateral development bank (MDB) financing also underfunds regional, multi-country projects for addressing regional public goods as countries are unwilling to use their country allocations for multi-country projects even if the return on them is higher than the marginal country project.

Global thematic funds to support specific development challenges—Global Alliance for Vaccination and Inoculation (GAVI), Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), Global Environmental Fund (GEF) and earlier funds like the Consultative Group for International Agricultural Research (CGIAR)—have been successful in addressing specific development challenges through projects in specific countries, especially for agriculture, the environment, and health. They have also drawn in private philanthropic financing in addition to public resources. But global funding for global public goods has not had the same success, and systematic and sustained financing for disasters, biodiversity, desertification, and even for Ebola outbreaks has been difficult.

The Green Climate Fund, which will begin its work this year and will devote 50:50 share of funding for adaptation and mitigation has very limited funding so far – despite the commitment to provide $ 100 billion per year over and above ODA. But neither the AAAA, nor the SDG’s address many of the trade-offs involved between climate change and poverty eradication. COP 21 also did not provide greater guidance on these matters – despite high expectations that it would. Given the need for rapid economic growth to eradicate poverty for the LDC’s  as well as their need to deal with huge adaptation costs, it probably makes sense not to focus excessively on mitigation in these countries. These countries would increase their global carbon footprint by at best 2-3 percent of the total carbon emissions. The big tradeoffs will arise in the need for rapid growth in middle-income countries to address poverty and their increased emissions, which will accompany faster growth.

Protection of biodiversity is given specific mention in the AAAA, and the Global Strategic Plan for Biodiversity for 2011-20 is endorsed along with its 20 Aichi biodiversity targets. But progress in meeting these targets is slow and at current trends unlikely to be achieved. The AAAA does not address this slow progress or suggest ways to accelerate it. It does endorse the U.N. Convention to Combat Desertification and the African Union Green Wall Initiative; but again with no specificity on how progress on these commitments will be accelerated. The same is true of the attention on oceans and marine resources, where the U.N. Convention on the Law of the Sea is mentioned but with no concrete steps on how to finance, enforce, and protect vulnerable areas, especially the small island developing states (SIDS).

Private philanthropic foundations have played important catalytic roles, such as efforts by the Ford Foundation and the Rockefeller Foundation to help jump-start the Green Revolution in the 1960’s, and the eventual creation of the CGIAR. A somewhat similar role has been played by the Bill & Melinda Gates Foundation for global public health. But no such foundations exist for many underfunded issues, such as disaster relief, peacebuilding, and desertification. These types of activities can be much better funded by more globalized revenue sources. The AAAA does not even mention the need for any such revenue sources.

A key GPG is peacekeeping, international security, and the prevention of conflict. Surprisingly, military spending is also not touched upon in the AAAA but has increased sharply. It dropped in the late 1990s following the end of the Cold War, from $1.5 trillion to around $1 trillion globally, but has increased again to almost $ 2 trillion today. Cutting military expenditure—especially in many developing countries where it exceeds 4 percent of GDP—would be an important step and shifting some of those resources to peacekeeping and conflict prevention would improve public spending.

With the AAAA pushing for new modes of financing, its surprising that for GPG financing more global sources of finance are not considered. At least four such options exist and could go a long way towards financing the SDGs. The first is a carbon tax or auctioning of carbon emissions permits. This is an idea with huge appeal as it will also help dissuade use of fossil fuels and could lower emissions globally, but is opposed by all the major emitters. Carbon taxes have been used in several countries to reduce fossil fuel use without any damage to long-term growth. Emission permits have also been used in some countries to reduce emissions of some harmful chemicals. But they have not been used internationally.

The second is a so-called “Tobin tax,” a tax on all foreign exchange transactions, which might also discourage destabilizing short-term volatile capital movements. The third is to add a pollution tax on all shipping and air travel – whose pollutions costs are not fully captured by existing taxes and fees imposed on them. The fourth is to allow issuance of SDRs to finance GPG’s.

Unfortunately, all these proposals are currently opposed by the major G-20 countries for various reasons. While several European countries—and even some developing ones—have introduced carbon taxes, still more remain opposed to carbon taxation. The Tobin tax idea has been around now for several decades and is considered an anti-globalization proposal even if its revenues were to be used to finance GPGs.  At times in the past, some countries have imposed a tax on foreign exchange transactions, with the explicit purpose of slowing down volatility in capital markets.

Global taxation has the connotation of supra-nationality, which many rich country legislatures—especially in the U.S.—would oppose. One way around this might be to specify how these resources would be used or to use them through MDBs where the richer countries have a controlling vote. To some extent the Global programs—GAVI, GFATM, CGIAR, and now the Green Climate Fund—have done that, but their financing remains much too dependent on national budgets and not on automatic revenue-raising mechanisms. National lotteries have been used in some countries to raise resources for specific causes; global lotteries could be an option for financing some specific global goods. But the world must move to some global means of revenue-raising if it wants to address GPGs seriously. Private financing, innovative financing, and public-private partnerships touted in the AAAA and COP21 can be crowded in, but without more international public financing to address market failure, financing the SDG’s will be difficult.

The world needs to heed Ben Franklin advice in another context “We must hang together or surely we will hang separately.”

On February 9, President Obama submitted his FY 2017 budget request to Congress. The proposed international affairs budget is down 1 percent from current funding levels and 12 percent (in constant dollars) since 2010, better than many domestic accounts. In addition, outside the regular budget, the administration is proposing $1.8 billion ($376 million from the international affairs budget account) to meet the latest pandemic—the Zika virus. Given the budget environment, the proposed amounts for the international affairs budget seem reasonable.

But from a long-term perspective, the budget is alarming. It seems unable to take account of global trends, it relies on fractured and ad hoc processes, and it is excessively siloed into pre-determined sectors.

Being satisfied with relatively small budget cuts does not face the reality of far greater and more pressing challenges today than in 2010. Today, Iraq and Afghanistan are still demanding sizable budget resources. We need to respond to Russia’s muscle-flexing by demonstrating our commitment to its independent neighbors. The effort to move HIV/AIDS to a more sustainable model is commendable but showing minimal success, so U.S. funding cannot slip. The Ebola crisis has been succeeded by the Zika virus. The Middle East is unstable and violent, with half the population of Syria killed or displaced. Sixty million displaced persons is the highest level ever reached. The world is addressing four Level 3 humanitarian crises, an unprecedented number. The fear of terrorism is spreading and disrupting rational political dialogue. Domestic violence and civil strife is increasing in Central America. Free expression is under siege in many countries and civil societies are in need of reinforcement.

Many of these challenges reflect an underinvestment in development in the past. We are using a Rube Goldberg budget system that cobbles together funding from multiple sources for a single objective and locks in funding several years before a penny flows, making it difficult to adjust to changing circumstances.

The budgeting system problem

The 2017 budget uses a gimmick that may not be sustainable. To fund the Iraq war, the Bush administration invented an off-budget account (Overseas Contingent Operations, or OCO, a successor to earlier emergency funding) that does not count against the annual budget caps. The State Department and USAID got part of their budgets starting in 2012 from this account. OCO for FY 2017 is proposed at one-quarter of the international affairs budget. The problem is that OCO cannot be counted on in the long-term, and the sustainable base budget for FY 2017 is down 30 percent from FY 2010 in constant dollars.

The budget process is also absurdly long. The Obama administration began planning the FY 2016 budget in the spring of 2014, roughly 18 months before Congressional appropriations. Typically, it could take another six months for agency officials and appropriation committees to agree on country and program allocations. Only then, 30 months later, can U.S. development professionals working overseas get on with the business of putting those resources to work.  

This budget process, with its long timeframes and pre-determined earmarks and presidential initiatives, means that despite best efforts by USAID, it is difficult to respect “local ownership” of development—something that development experience demonstrates is fundamental to successful and sustainable development.

Presidential initiatives have their place as a way to bring along political allies and the American populace. It is also appropriate and constructive for Congress to weigh in on funding priorities. But it can be counterproductive to effective development when presidential initiatives and congressional earmarks dictate at the micro level and restrict flexibility in implementation, especially in a rapidly changing world with frequent crises. 

Another problem with the current budget system is that most but not all sectors are protected by budget accounts or earmarks. Health is protected and the funding divided into various sub-accounts. Education and agriculture get earmarks. New in the FY 2016 appropriations bill is a separate line item for democracy.

Another structural issue is the crisis-reactive nature of our assistance programs. Health, which garners the lion’s share of U.S. economic assistance, has been dominated for nearly two decades by responses to global crises — first massive funding for combatting HIV/AIDS, followed by significant funding to tackle malaria, Ebola, and now the Zika virus. It is funding by individual disease. Crisis galvanizes political and popular support for the here and now. But what if we had focused on building up national health systems for the last 20 years rather than fighting one-off diseases? If we moved to more preventive approaches now, maybe in 10 or 20 years the pandemic of the day could be met less by the U.S. ramping up in a crisis mode and more by the health systems in those countries affected, with the U.S. playing a supportive and technical role rather than the core funding role. 

These issues are examples of why it is imperative for the next administration and congress to engage in a strategic dialogue on the objectives and priorities of foreign assistance programs, both in funding levels and how the funds are used. It is time to move away from the current structure that resembles building a Cadillac from parts of models stretching from 1949 to 1973, as in the Johnny Cash song "One Piece at A Time.”

Figure 1: How we build our budget

Source: Abernathyautoparts, CC BY-SA 2.5

It is not unrealistic to envisage a more strategic approach. One option is to return to the approach in the 1970s, when all development funding was put into one of just five or six functional accounts, and provide some flexibility in moving funds between accounts.

Policymakers who believe that America is an exceptional or indispensable nation and that world problems do not get solved without American involvement need to take a hard look at whether they are providing the U.S. government with the required diplomatic and development tools. It is high time for U.S. policymakers to take a more strategic approach to the level of funding of international affairs and how the U.S. uses its foreign assistance. The inauguration of a new president and Congress in 2017 offers the opportunity to seize this challenge.

This week, Royal Dutch Shell announced that it would postpone oil drilling in the Chukchi Sea and the broader American Arctic indefinitely. The decision came in the wake of disappointing output from its Burger field, the high costs associated with the project (already nearing $7 billion), the “challenging and unpredictable federal regulatory environment in offshore Alaska,” and a growing public relations problem with environmental groups opposed to Arctic drilling.

This decision is a momentous one—both for the future of the U.S. energy policy and the ability of the international oil industry to balance global oil supply and demand. The announcement came only days after Hillary Clinton spoke out against the Keystone Pipeline, not only because it would lead to the consumption of more fossil fuels but also because much of the oil might be exported. With broader opposition to lifting the ban on crude oil exports gaining momentum in the White House, it is clear that at least part of the nation’s political leadership is moving in a nationalistic direction. This means that the United States—with its vast resources—is unwilling to help meet the burgeoning energy needs of the world’s population: especially the 1.2 billion people who have no access to commercial energy.

Shell’s decision highlights four significant and diverse areas of concern for the future of energy globally and energy policy here in the United States.

Mapping supply and demand

Shell and much of the rest of the international petroleum industry had viewed the Chukchi Sea as one of the last great oil frontiers. The Chukchi and adjoining Beaufort Seas are vital for meeting the estimated 12 to 15 million barrels per day (mmbd) of additional oil demand projected by almost all oil forecasts (both inside and outside the industry) needed between 2035 and 2040. 

Without the U.S. Arctic, the other areas projected to make major contributions by this time are Iraq, Iran, Saudi Arabia, shale oil around the world (including North America), the Orinoco region of Venezuela, and the pre-salt offshore Brazil. Needless to say, given the political turmoil in Iraq, Iran, Venezuela, and Brazil—as well as concerns about the long term stability of Saudi Arabia—one has to wonder: Where will the world discover additional, reliable crude oil supplies without a major contribution from the Arctic?

Many in the environmental community argue that we will not need fossil fuels in the future, predicting a turn to renewables, enhanced energy efficiency, large scale battery storage, and electric vehicles. Unfortunately, this has no basis in fact. Clearly renewables will grow exponentially as their prices fall, new technologies will increase energy efficiency, large scale battery storage will commence, and many electric vehicles will hit the road. But there are currently more than 260 million gas and diesel vehicles running on U.S. roads alone, with less than 1 percent of these running on electricity. With transportation fuel demand mushrooming globally, it’s unlikely that oil consumption in the transportation sector will die or even decline significantly. 

Fossil fuels for development

Drilling in the Arctic poses unique environmental risks which must be managed through state-of–the-art technology and accompanied by the most stringent regulatory enforcement. A recent National Petroleum Council examination of all possible challenges involved in Arctic offshore drilling found that drilling can be done safely. Yet despite these findings, most major national environmental groups have opposed any drilling in the Arctic and have even asserted that Shell’s decision is a vindication of their position. But these groups don’t seem concerned or even thoughtful about the long-term implications of the U.S. energy industry’s abandonment of the Arctic.

With the world’s population forecast to rise by 1.6 billion people by 2035, do we really think global oil demand won’t continue to rise? While I recognize that we must do everything to limit the growing use of fossil fuels to attack climate change, do we really have no moral obligation to help countries emerge from poverty, which will almost certainly involve continued use of fossil fuels? 

During his recent visit to America, Pope Francis called for the world to make a renewed commitment to help the “poorest of the poor,” and the United Nations has also put forward new sustainable development goals that include an expansion of energy access to those who are either unserved or underserved. Focusing our policies exclusively on shutting down U.S. fossil fuel development, as some environmental groups advocate, takes away resources that can be used to improve global health, education, clean water, and women’s empowerment—all of which are all directly related to energy access. In looking at girl’s education, for example, increasing energy availability allows water to be pumped up from the river, obviating the need for arduous, tedious work for the women and girls that would otherwise have to carry this water by hand to their communities, limiting time for education. The availability of energy allows vaccines to be safely stored, crops to be refrigerated, and children to have the electricity available to study at night. 

All of these benefits—and many others—cannot happen without improving electricity access, which still involves fossil fuel. The United States can and should play a role in this effort.

Jostling for Arctic access

Shell is not the only company to experience setbacks in the Arctic. Italy’s ENI SpA and Norway’s Statoil ASA just yesterday had another regulatory setback due to delays in obtaining permission from Norway to commence production. In June, a consortium including Exxon and BP PLC suspended its Canadian Arctic exploration, noting insufficient time to begin test drilling before the expiration of its lease in 2020. In addition, Exxon had to curtail its plans to drill in the Russian Arctic after the United States imposed sanctions on Moscow and its energy industry following the annexation of Crimea. 

Russia, though, remains active in the Arctic, and it can be assumed that once sanctions are lifted, many oil companies will try to gain a toehold. China, Korea, India, and Singapore, among other countries, have expressed interest in gaining access to the region’s mineral, energy, and/or marine resources. In several cases, they are building ice-worthy vessels to give them the capability to do so. The Bering Strait is emerging as a significant new maritime route in desperate need of enhanced regulation.

In a report last year, my colleagues and I looked at key recommendations for offshore oil and gas governance as the United States assumed chairmanship of the Arctic Council. Beyond highlighting the resource potential of the region, our work looked at increasing needs for safety and security as a result of increasing transportation across the Arctic. Even as the United States stands to be less involved in Arctic energy development, it is our duty as chair of the Arctic Council to lead in region. 

Alaska is a state, not a park

The promise of the Arctic has inspired adventurers, explorers, geographers, scientists, and entrepreneurs for generations and will continue to do so in the future. The United States should be actively involved in helping to ensure that Arctic resources are developed and used prudently—rather than sit on the sidelines with myopic dreams of leaving the region a pristine wilderness. Arctic inhabitants—both natives and others—of course want to keep the Arctic safe, but they do not want to make it a museum. 

Development of the region’s resources accounts for nearly 95 percent of Alaska’s revenues. If we deny its development, are we prepared to make a line item in the federal budget to pay for Alaska to remain a park? 

INTRODUCTION

As a mechanism for controlling climate change, the Kyoto Protocol has not been a success. Over the decade from its signing in 1997 to the beginning of its first commitment period in 2008, greenhouse gas emissions in the industrial countries subject to targets under the protocol did not fall as the protocol intended. Instead, emissions in many countries rose rapidly. It is now abundantly clear that as a group, the countries bound by the protocol have little chance of achieving their Kyoto targets by the end of the first commitment period in 2012. Moreover, emissions have increased substantially as well in countries such as China, which were not bound by the protocol but which will eventually have to be part of any serious climate change regime.

Although the protocol has not been effective at reducing emissions, it has been very effective at demonstrating a few important lessons about the form future international climate agreements should take. As negotiations begin in earnest on a successor agreement to take effect in 2012, it is important to learn from experience with the Kyoto Protocol in order to avoid making the same mistakes over again and to design a more durable post-2012 international agreement.

The first lesson is that a rigid system of targets and timetables for emissions reductions is difficult to negotiate because it pushes participants into a zero sum game. To reach a given target for global greenhouse gas concentrations, for example, countries must negotiate over shares of a fixed budget of future global emissions. A looser target for one country would have to be matched by a tighter target for another. It is clear that this has been an important obstacle for much of the history of negotiations conducted under the auspices of the United National Framework Convention on Climate Change, not just the Kyoto Protocol. From the beginning, developing countries have refused to participate in dividing up a fixed emissions budget. Not only that, but many observers have argued that if such a budget were ever to be divided, it should be done on the basis of population rather than the historical emissions which were the basis of the Kyoto Protocol.

A second lesson is that it is difficult for countries to commit themselves to achieving specified emissions targets when the costs of doing so are large and uncertain. At its core, the targets and timetables approach requires each participant to achieve its national emissions target regardless of the cost of doing so. Countries facing potentially high costs either refused to ratify the protocol, such as the United States, or simply failed to achieve their targets. Countries on track to meet their obligations were able to do so because of historical events largely unrelated to climate policy, such as German reunification, the Thatcher government’s reform of coal mining in Britain, or the collapse of the Russian economy in the early 1990’s.

The third lesson is perhaps the most important of all: even countries earnestly engaged in a targets and timetables process may be unable to meet their targets due to unforeseen events. Two excellent examples are New Zealand and Canada. No one anticipated during the 1997 negotiations that a decade later New Zealand would be facing a dramatic rise in Asian demand for beef and diary products. The impact on increasing methane emissions in New Zealand has been so large that it has completely offset the reductions New Zealand was able to achieve in the earlier 1990’s via reduced methane from declining numbers of sheep and improved sinks of carbon due to growth in forestry. Similarly, no one expected that Canada would find its tar sand deposits so valuable that extraction would be viable at oil prices reached two years ago let alone at current world oil prices.

One reason there has been so much interest in a targets and timetables strategy has been a widespread misunderstanding about the precision of scientific knowledge regarding the climate. It is widely agreed among atmospheric scientists that atmospheric concentrations of greenhouse gases are rising rapidly, and that emissions should be reduced.1 However, there is little agreement about how much emissions should be cut in any given year, and there is no guarantee that stabilizing at any particular concentration will eliminate the risk of dangerous climate change. Yet it is often implied that climate science translates directly into a specific emissions target and a fixed emissions budget.2 On the contrary, however, the uncertainties still remaining in the science are important and should be a core consideration in the design of climate policy.

All of the lessons above illustrate problems inherent in the targets and timetables approach. First, it forces countries into confrontations during negotiations over shares of a fixed global emissions budget. Second, committing to achieve a rigid emissions target is difficult for countries facing uncertain and potentially very high costs. Third, unexpected events can force even well-intentioned participants into non-compliance. In the face of these problems, some observers have argued that the solution is more of the same: a broader protocol with tighter targets and deeper cuts. However, there is little reason to expect the outcome to be any different, and in the mean time emissions will continue to rise. A better approach would be to recognize that focusing on targets and timetables has undermined the ultimate goal of actual emissions reductions, and that it is critical to move negotiations in a new direction. The Hokkaido Summit to be held in Japan this year is an important opportunity to make that shift, and to move the focus of climate change negotiations in a more realistic direction.

In this paper, we discuss an alternative framework for international climate policy, the McKibbin-Wilcoxen Hybrid3—an approach that focuses on coordinated actions rather than mandated, inflexible outcomes. Rather than committing to achieve specified emissions targets, participating countries would agree to adopt coordinated actions that are clear, measurable and enforceable within national borders. Because it does not start from a fixed emissions target (although an emissions budget does guide the design of the actions we propose), the Hybrid avoids all three of the problems discussed above. Shifting to an approach based on agreed actions, rather than specific emissions outcomes, will be a critical step in the evolution of climate negotiations. It will also make national policy actions more feasible than fixed targets, since a target would be little more than a hopeful pledge given how little is known for certain about the costs of reducing emissions.

Moreover, a framework based on common actions rather than common targets is particularly useful for accommodating the needs of developing countries. Developing countries face even greater uncertainty about their future economic growth prospects and future emissions paths than developed countries, and certainly do not want to undermine their development prospects by committing to an excessively stringent emissions target.

To illustrate the differences between the targets and timetables approach and one based on the Hybrid, we present a number of numerical simulations of the world economy using the G-Cubed global economic model. We focus particular attention on two of the problems with targets and timetables: the high stakes involved in negotiating over emissions budgets, and the risks stemming from uncertainty about costs. We first show that the outcome of a Kyoto-style targets and timetables policy with global emissions trading depends significantly on the allocation scheme for the emissions targets. We present one set of results using an allocation based on historical emissions and another set of results based on an equal per capita allocation. The results show how different the national costs of the policy will be depending on how emissions rights are allocated. We then examine the performance of the Kyoto-style allocation under one source of uncertainty: the rate of growth in developing countries, particularly China and India.

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In recent decades, India has taken on a growing global presence, one that has been seen as increasing even more since Prime Minister Narendra Modi took office nearly two years ago. In a new book, “India at the Global High Table: The Quest for Regional Primacy and Strategic Autonomy” (Brookings Institution Press, 2016), former U.S. ambassadors Teresita Schaffer and Howard Schaffer explore how India is managing its evolving international role, assessing the country’s strategic vision and foreign policy, and the negotiating behavior that links the two.

On April 20, The India Project at Brookings hosted a panel discussion to discuss the book and, particularly, four elements highlighted in it: India’s exceptionalism; its nonalignment and drive for “strategic autonomy;” its determination to maintain regional primacy; and, more recently, its surging economy.

Join the conversation on Twitter using #IndiaHighTable

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Economist Albert Hirschman’s marvelously perceptive little book with big ideas written in 1970 titled “Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations and States” provides a cornucopia of insights into understanding Brexit and the current state of global governance.  When it emerged American economist Kenneth Arrow marveled at its extraordinary richness, and political scientist Karl Deutsch, in his presidential address to the American Political Science Association, called it an “outstanding contribution to political theory.”

Economists assume exit to mean dissatisfaction with an organization’s product or the service leading to decline in demand for it. The value of exit lies in the certainty it provides in terms of the relationship between the customer or member and the firm. Political scientists think of how a firm handles its response to customer dissatisfaction as the exercise of voice by stakeholders. The value of voice is that it can lead to reform that ultimately determines the firm’s revival, an idea also advanced by scholar Clayton Christiansen in his book “The Innovator’s Dilemma.” An understanding of the conditions under which exit and voice are exercised requires the incorporation of the concept of loyalty. Loyalty makes voice more probable and exit less likely. But loyalty does not by itself make the exercise of voice more effective. That depends on the extent to which customers or members are willing to trade off the certainty of exit against the uncertainties of improvement in the deteriorating product, and their ability to influence the organization.  

Applying these ideas to Brexit suggests that the option of a U.K. exit was made more likely because of the limited voice of the U.K. in achieving reforms, coupled with the fact that Britain’s loyalty to the European Union was mixed at best. Its self-perception as “special people” was accompanied by long-standing skepticism about foreigners, including other Europeans.

Some have attributed Brexit to misjudgment by Prime Minister David Cameron about holding a referendum, poor management of migration policy by the EU including procrastination and downright misjudgment on migration, and they have termed the historic vote as nothing short of the beginning of the end of the post-World War II institutional frameworks, including the Bretton Woods institutions. They fear that the longest and most prosperous period of sustained peace in modern human history, enabled by post-war global architecture, may have come to an end.

The Economist is one proponent of this view, describing Brexit as multiple calamities. The British economy and polity are wildly off the rails, the newspaper notes. The prime minister has resigned with no obvious successor. The leader of the opposition is struggling to survive a coup. The pound hit a 31-year low against the dollar and banks lost a third of their value before stabilizing. Meanwhile there is talk in Scotland and Northern Ireland of secession.

But my own English friends, some of whom favored Brexit, talk about the high tax payments to the EU, oppressive overreach of the EU bureaucracy, and the fear of open borders leading to uncontrollable immigration from Eastern Europe, Turkey, and the Middle East. In short they see EU membership as all pain and no gain. On the surface Brexit has all the flavors ranging from nostalgia of self-rule to xenophobia.

There are already signs that exit is becoming the preferred option in various global governance organizations. Global loyalties are split, not just among great powers, but also between developed and developing countries. Voice and reform have not been effective.

Hirschman mentions leadership and timely action in sharing power with the next generation as a behavioral trait (often found in the animal kingdom) favoring voice. He contrasts that with exit, which he describes as a human behavior which assumes markets, including political markets, will solve problems.

Hirschman’s chapter “Exit and Voice in American Ideology and Practice” helps us to better understand the U.S. role in global governance. He notes that exit has been accorded “an extraordinarily privileged position in the American tradition” founded in its very creation as a land of immigrants, who, he reminds us, were opting for exit.  Indeed, like in Britain, “the neatness of exit over the messiness and heartbreak of voice” has persisted throughout U.S. history. In his last chapter, “Elusive Optimal Mix of Exit and Voice,” he does not come up with a recipe for some optimum mix of the two, nor does he recommend each institution has its own optimum mix, instead arguing conditions are seldom ripe for their optimum and stable mix—although it is possible to say there is deficiency of one or the other at a given point in time.

Today, it seems that the dominant mode of the post-World War II era, namely voice, is plainly revealing its inadequacy, so the other mode, exit, will eventually be injected once again.

Having had a leading role in founding the global architecture of the United Nation, Food and Agriculture Organization, and Bretton Woods institutions, the U.S. has had a strong voice in and loyalty to the Bretton Woods institutions as well as leadership roles commensurate with its historic roles. U.S. loyalty to the U.N. outside of the Security Council has varied among administrations, since voice in U.N. organizations is distributed more equally. The U.S. has opted for exit from specific U.N. organizations from time to time when it has disliked the dissenting views of other members. 

Others are also choosing to exit. China’s slightly increased shares in the International Monetary Fund and the World Bank after the financial crisis are nowhere near its weight in the global economy, thanks to European reluctance to accept a reduced voice. China and other emerging countries have exercised a partial exit option by establishing the Asian Infrastructure Investment Bank and the New Development Bank to meet the investment needs of developing countries.The U.S. considered the establishment of the two as a threat to its leadership and to the Bretton Woods institutions, viewing the acts as verging on disloyalty, whereas most U.S. allies have embraced membership in both. And yet the Asian Infrastructure Investment Bank is following on the footsteps of the Bretton Woods institutions as regards norms and rules.

To strengthen global governance requires strengthening “voice” and weakening incentives for “exit” from the U.N. and Bretton Woods institutions and other forums of global governance. The U.S. needs to also lead the effort to increase the rewards and reduce the cost of exercising voice. This would be a timely reminder, when politics seems to thrive on divisions, that leadership means forging inclusive institutions that serve all members. 

Today in Seattle, Seattle Mayor Ed Murray will announce the Central Puget Sound region is joining a pilot program that will create and implement plans to attract foreign direct investment as part of the Global Cities Initiative, a joint project of the Brookings Institution and JPMorgan Chase.

Mayor Murray will make this announcement at a Global Cities Initiative forum, where Seattle area business and civic leaders will also discuss strengthening the global identity of the Puget Sound region and expanding opportunities in overseas markets. Following the announcement, Mayor Marilyn Strickland of Tacoma and Mayor Ray Stephanson of Everett will make additional remarks about the importance of this new effort.

The Seattle area is joined in the pilot by Columbus, Ohio; Minneapolis-Saint Paul; Portland, Ore.; San Antonio; and San Diego. This group will meet in Seattle today for their first working session, where they will discuss the process for developing their foreign direct investment plans.

Foreign direct investment has long supported regional economies, not only by infusing capital, but also by investing in workers, strengthening global connections and sharing best business practices. The Global Cities Initiative’s foreign direct investment planning process will help metro areas promote their areas’ unique appeal, establish strategic and mutually beneficial relationships and attract this important, underutilized source of investment.

With the help of the Global Cities Initiative, the selected metro areas will strategically pursue foreign direct investment such as new expansions, mergers and acquisitions, and other types of foreign investment. Forthcoming Brookings research will offer metropolitan leaders more detailed data on foreign direct investment’s influence on local economies.

Read the Forum Press Release Here »

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In an increasingly international and interconnected economy, Seattle was global before global was cool.

The region’s competitive global assets include internationally competitive firms, strategically important ports and one of the nation’s largest foreign-born populations.

Still, today’s unique economic moment demands an extra measure of purposeful global engagement.

As cities and metropolitan areas begin to emerge from the Great Recession, leaders are realizing the need to restructure the economy — to move from one based on debt and consumption to one powered by production and innovation.

At the same time, most economic growth over the next decade will occur outside of America’s borders. As of 2009, the combined economies of Brazil, India and China eclipsed that of the United States and now account for more than one-fifth of the global economy. By 2018, their share is expected to surpass one-quarter.

The developing world, with a rapidly rising middle class, represents a huge market opportunity for American firms. China and India alone are expected to increase their urban populations by more than 500 million over the next 20 years, which naturally leads to a rise in their consumer classes. By 2050, Chinese and Indian consumers will account for more than half of all middle-class consumption worldwide, up from just 2 percent in 2000.

These growing metropolises will also require massive investments in infrastructure and face huge challenges as they expand, challenges that U.S. firms have the expertise to solve — in transportation and mobility, in sustainability and clean energy, in information technology and software.

America’s metropolitan areas are uniquely positioned to take advantage of this dual challenge through increased trade and investment. The top 100 metro areas not only produce three-quarters of our gross domestic product, they also concentrate our most innovative firms, our research institutions and universities, and the majority of our skilled workers.

So how does the central Puget Sound region stack up? Recently, I came to Seattle as part of the Global Cities Initiative, a joint project of the Brookings Institution and JPMorgan Chase. This initiative aims to catalyze a shift in economic development priorities and practices that would result in more globally connected metropolitan areas and more sustainable economic growth.

The metro area has a strong platform for trade: firms such as Boeing, Microsoft, and Amazon; world-class research assets including the University of Washington and the Fred Hutchinson Cancer Research Center; and a strong legacy of globally oriented leadership, with a wide coalition, including public, private and civic leaders, actively promoting a regional strategy for global engagement.

The data bear this out: While Seattle is the 15th largest metro area in the United States, it has the sixth highest export total, sending more than $47 billion in goods and services abroad in 2012. These exports are overwhelmingly driven by globally competitive clusters in aerospace and information technology.

Partly due to this industry specialty, Seattle’s economy is also highly innovative and uniquely oriented toward science, technology, engineering and math: More than one-quarter of jobs in the metro are in STEM occupations, the fourth highest share of any metropolitan area in the country.

Still, in such a competitive and dynamic global economy, no metro area can afford complacency. In order to maintain its position in the global economy, Seattle needs to get serious about global engagement.

First, focus on global trade and investment. Continue the collaborative efforts of your public, private and civic leaders to focus economic development strategies on growth abroad. In Seattle earlier this month, regional leaders committed to expanding these efforts, joining the Global Cities Initiative’s Exchange, through which the metro area will develop a strategy to increase foreign direct investment in key industries.

Second, invest in what matters. To compete globally, metro areas must be strong at home. In Seattle, this means shoring up your workforce-development pipeline so that local residents have a path to good jobs in advanced industries. It also calls for a regional approach to financing and delivering transportation solutions that not only reduce congestion at home, but also improve your connections abroad.

Finally, metropolitan leaders must look beyond their own borders, identify their trading partners, and build relationships to increase both trade and investment. For example, as part of the Global Cities Initiative, Chicago and Mexico City entered into a first-of-its-kind economic partnership that builds on the extensive economic, social, cultural linkages between the two metros to make both more prosperous.

There are promising efforts under way in the region, as the King County Aerospace Alliance has started collaborating with Aéro Montréal so that the two aerospace clusters can be more competitive.

Simply put, in today’s economic landscape, every city is a global city. The success of regional economies hinges on their engagement throughout the global economy. Seattle has an enviable hand to play; but success is not inevitable.

This opinion piece originally appeared in the Seattle Times.

In “Water Crimes: a Global Crisis on the Rise,” a lecture given on February 20, 2015 at Brookings Mountain West Lecture Series, Vanda Felbab-Brown explains that urbanization, population growth, environmental degradation, water pollution, climate change, and increased living standards are some of the main reasons for intense competition for water. As surface water depletes, there is increased pressure for ground water usage, which is more difficult to regulate for use, abuse, and theft. Water theft and smuggling are perpetrated by both the wealthy and those who are chronically deprived of water, says Felbab-Brown, as she provides examples from California, southern Europe, Nigeria, Kenya, the Middle East, and South Asia. In many parts of world, elaborate smuggling of water with complex network chains and water mafias has emerged. Smuggling modes vary and among others include the development of illegal pipelines, illegal truck deliveries as well as the cooptation of water regulators complicit in licensing fraud and broader government acquiescence to illegal water delivery. Illegally sourced and smuggled water is used for personal consumption, agriculture, industry, and sometimes for other other illegal activities, such as the production of illegal narcotics.

For many reasons, the illegal use and delivery of water is difficult to address, says Felbab-Brown. Large-scale agriculture and industry often exercise great influence over regulators and law enforcement. In slum areas, mostly unconnected to legal pipelines, the suppression of illegal water distribution can sever access to water and hence threaten the physical survival of the most marginalized and poor. Across the world, citizens tend to be vehemently opposed to increased water pricing. Yet without effective regulation, appropriate pricing, and suppression of water crimes, the sustainability, long-term viability, and inclusive and equitable use of water cannot easily be achieved.

Among the ways to improve water policy and suppress water smuggling, Felbab-Brown notes: (1) Recognizing the extent of water misuse, abuse, and crimes; (2) developing better inventories and water-level monitoring capacity, better regulation, including pricing, greater transparency, and a broadly-based external oversight of water authorities; (3) increasing stakeholder-participation of water regulation, including farmers, businesses, and the poor who are traditionally excluded; and (4) selectively licensing some currently illegal water distributors to areas without legal water distribution systems while cracking down on the most usury, unreliable, and abusive ones. Looking ahead, coping with scarcity will require not just more innovation, but particularly better conservation.

In the United States, the official poverty rate for 2012 stood at 15 percent based on the national poverty line which is equivalent to around $16 per person per day. Of the 46.5 million Americans living in poverty, 20.4 million live under half the poverty line. This begs the question of just how poor America’s poorest people are.

Poverty, in one form or other, exists in every country. But the most acute, absolute manifestations of poverty are assumed to be limited to the developing world. This is reflected in the fact that rich countries tend to set higher poverty lines than poor countries, and that global poverty estimates have traditionally excluded industrialized countries and their populations altogether.

An important study on U.S. poverty by Luke Shaefer and Kathryn Edin gently challenges this assumption. Using an alternative dataset from the one employed for the official U.S. poverty measure, Shaefer and Edin show that millions of Americans live on less than $2 a day—a threshold commonly used to measure poverty in the developing world. Depending on the exact definitions used, they find that up to 5 percent of American households with children are shown to fall under this parsimonious poverty line.

Methodologies for measuring poverty differ wildly both within and across countries, so comparisons and their interpretation demand extreme care.

These numbers are intended to shock—and they succeed. The United States is known for having higher inequality and a less generous social safety net than many affluent countries in Europe, but the acute deprivations that flow from this are less understood. A crude comparison of Shaefer and Edin’s estimates with the World Bank’s official $2 a day poverty estimates for developing economies would place the United States level with or behind a large set of countries, including Russia (0.1 percent), the West Bank and Gaza (0.3 percent), Jordan (1.6 percent), Albania (1.7 percent), urban Argentina (1.9 percent), urban China (3.5 percent), and Thailand (4.1 percent). Many of these countries are recipients of American foreign aid. However, methodologies for measuring poverty differ wildly both within and across countries, so such comparisons and their interpretation demand extreme care.

This brief is organized into two parts. In the first part, we examine the welfare of America’s poorest people using a variety of different data sources and definitions. These generate estimates of the number of Americans living under $2 a day that range from 12 million all the way down to zero. This wide spectrum reflects not only a lack of agreement on how poverty can most reliably be measured, but the particular ways in which poverty is, and isn’t, manifested in the U.S.. In the second part, we reexamine America’s $2 a day poverty in the context of global poverty. We begin by identifying the source and definition of poverty that most faithfully replicates the World Bank’s official poverty measure for the developing world to allow a fairer comparison between the U.S. and developing nations. We then compare the characteristics of poverty in the U.S. and the developing world to provide a more complete picture of the nature of poverty in these different settings. Finally, we explain why comparisons of poverty in the U.S. and the developing world, despite their limitations and pitfalls, are likely to become more common.

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The Girls’ Education Imperative

In 1948, the world’s nations came together and agreed that “everyone has a right to education,” boys and girls and rich and poor alike. This vision set forth in the Universal Declaration of Human Rights has been reinforced over the decades and today the girls who still fight to be educated are not cases for charity but actively pursuing what is rightfully theirs. In recent years, girls’ education has also received attention because, in the words of the United Nations, “education is not only a right but a passport to human development.” Evidence has been mounting on the pivotal role that educating a girl or a woman plays in improving health, social, and economic outcomes, not only for herself but her children, family, and community. Educating girls helps improve health: one study published in The Lancet, the world’s leading medical journal, found that increasing girls’ education was responsible for more than half of the reduction in child mortality between 1970 and 2009. The economic benefits are clear: former chief economist at the World Bank and United States Secretary of the Treasury Lawrence Summers concluded that girls’ education “may well be the highest-return investment available in the developing world” due to the benefits women, their families and societies reap. And because women make up a large share of the world’s farmers, improvements in girls’ education also lead to increased agricultural output and productivity.

Progress in Girls’ Education

Given the importance of girls’ education, for girls’ own dignity and rights and for a broad sweep of development outcomes, it is no surprise that global agendas have focused heavily on it. For more than two decades, girls’ education has been recognized as a global priority and incorporated into development targets, which has rallied governments, nongovernmental organizations (NGOs), foundations and international organizations. From the 1990 Education for All (EFA) Goals to the 1995 Fourth World Conference on Women in Beijing and to the 2000 Millennium Development Goals (MDGs), girls’ education has been a priority, particularly in international development communities. Perhaps the most influential of these has been the MDGs, which reinforce parts of the EFA goals by focusing two of their eight goals on education, namely on achieving universal primary education and achieving gender parity in both primary and secondary school.

Progress in enrolling children, especially girls, into primary school is seen by many as a development success story. Indeed there is much to celebrate. Since 1990, the number of girls in low-income countries enrolling in primary school has increased two-and-a-half times, from 23.6 million to nearly 63 million in 2012. This has translated into a large increase in the girl-boy ratio in low-income countries, from 82 to 95 girls per 100 boys in primary school. For low- and lower-middle-income countries combined, the number of girls enrolled reached over 200 million girls in 2012, an almost 80 percent increase, and globally two-thirds of countries have near-equal numbers of boys and girls enrolled at the primary level. 

In 1990, in South and West Asia, there were only 74 girls enrolled in primary school for every 100 boys, but by 2012 the region had achieved equal numbers of boys and girls in school.

This progress was largely made by the leadership of developing country governments that prioritized expansion of primary schooling opportunities and by the global community’s support of governments focused on reaching the MDGs. Some of the biggest gains have been in regions struggling the most. In 1990, in South and West Asia, there were only 74 girls enrolled in primary school for every 100 boys, but by 2012 the region had achieved equal numbers of boys and girls in school. Similarly, sub-Saharan Africa, which had the lowest levels of girls in school in 1990, has experienced marked improvement, with the girl-boy ratio increasing from 83 to 92 girls per 100 boys in primary school.

The focus on getting girls into school has helped close gender gaps in relation to other factors too, such as wealth and location of residence. The fact that family income and urban or rural locality are now the most likely indicators of school enrollment is a big victory for girls’ education. The World Inequality Database on Education (WIDE) shows that in India, for example, 38 percent of girls and 25 percent of boys of primary school age were not in school in 1992. By 2005, that gap had narrowed to 24 percent of girls and 22 percent of boys. However, today the gap between the richest and poorest children’s attendance is much starker—37 percent of children from the poorest 20 percent of families versus just 11 percent of the richest 20 percent are out of school. And in many areas, girls actually outpace boys, especially at higher levels of education. In one third of countries, there are now more girls than boys enrolled in secondary school. Also, girls often do better once in school, with boys making up 75 percent of grade-repeaters in primary school.

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

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

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

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

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China’s economic rise is one of the factors creating strains in the international financial order. China is already the largest trading nation and the second largest economy. It is likely to emerge in the next few years as the world’s largest net creditor. It is already #2 behind Japan. Until recently, China’s main foreign asset has been central bank reserves, mostly invested in U.S. Treasury bonds and similar instruments.

In the last couple of years, however, this pattern has started to change. China’s reserves peaked at about $4 trillion at the end of 2014. Since then, the People’s Bank of China has sold some reserves, but the country as a whole is still accumulating net foreign assets as evidenced by the large current account surplus. What is new is that the overseas asset purchases are coming from the private sector and state enterprises, not from the official sector. The Institute for International Finance estimated that the net private capital outflow from China was $676 billion in 2015. (That estimate includes outward investments by China’s state enterprises, which strictly speaking are not “private”; the point is to distinguish between official holding of foreign assets at the central bank and more commercial transactions.) As investment opportunities diminish in China owing to excess capacity and declining profitability, this commercial outflow of capital from China is likely to continue at a high level.

Tilted playing field

Most of the major investing countries in the world are developed economies; in addition to making direct investments elsewhere, they tend to be very open to inward investment. China is unusual in that it is a developing country that has emerged as a major investor. China itself is an important destination for foreign direct investment (FDI), and opening to the outside world has been an important part of its reform program since 1978. However, China’s policy is to steer FDI to particular sectors. In general, it has welcomed FDI into most but not all of manufacturing. However, other sectors of the economy are relatively closed to FDI, including mining, construction, and most modern services. It is not surprising that China is less open to FDI than developed economies such as the United States. But it is also the case that China is relatively closed among developing countries.

The OECD calculates an index of FDI restrictiveness for OECD countries and major emerging markets. The index is for overall FDI restrictiveness, and also for restrictiveness by sector. China in 2014 was more restrictive than the other BRICS countries (Brazil, Russia, India, and South Africa). Brazil and South Africa are highly open, similar to advanced economies with measures around 0.1 (on a scale of 0=open and 1=closed). India and Russia are less open with overall measures around 0.2. China is the most closed with an index above 0.4. Some of the key sectors in which China is investing abroad, such as mining, infrastructure, and finance, are relatively closed at home.

This lack of reciprocity creates problems for China’s partners. China has the second largest market in the world. In these protected sectors, Chinese firms can grow unfettered by competition, and then use their domestic financial strength to develop overseas operations. In finance, for example, China’s four state-owned commercial banks operate in a domestic market in which foreign investors have been restricted to about 1 percent of the market. The four banks are now among the largest in the world and are expanding overseas. China’s monopoly credit card company, Union Pay, is similarly a world leader based on its protected domestic market. A similar strategy applies in mining and telecommunications.

China is unusual in that it is a developing country that has emerged as a major investor.

This lack of reciprocity creates an unlevel playing field. A concrete example is the acquisition of the U.S. firm Smithfield by the Chinese firm Shuanghui. In a truly open market, Smithfield, with its superior technology and food-safety procedures, may well have taken over Shuanghui and expanded into the rapidly growing Chinese pork market. However, investment restrictions prevented such an option, so the best way for Smithfield to expand into China was to be acquired by the Chinese firm. Smithfield CEO Larry Pope stated the deal would preserve "the same old Smithfield, only with more opportunities and new markets and new frontiers." No Chinese pork would be imported to the United States, he stated, but rather Shuanghui desired to export American pork to take advantage of growing demand for foreign food products in China due to recent food scandals. Smithfield's existing management team is expected to remain intact, as is its U.S. workforce. 

The United States does not have much leverage to level the playing field. It does have a review process for acquisitions of U.S. firms by foreign ones. The Committee on Foreign Investment in the United States (CFIUS) is chaired by Treasury and includes economic agencies (Commerce, Trade Representative) as well as the Departments of Defense and Homeland Security. By statute, CFIUS can only examine national security issues involved in an acquisition. It reviewed the Smithfield deal and let it proceed because there was no obvious national security issue. CFIUS only reviews about 100 transactions per year and the vast majority of them proceed. This system reflects the U.S. philosophy of being very open to foreign investment.

A thorn in the relationship

Chinese policies create a dilemma for its partners. Taking those policies as given, it would be irrational for economies such as the United States to limit Chinese investments. In the Shuanghui-Smithfield example, the access to the Chinese market gained through the takeover makes the assets of the U.S. firm more valuable and benefits its shareholders. Assuming that the firm really does expand into China, the deal will benefit the workers of the firm as well. It would be even better, however, if China opened up its protected markets so that such expansions could take place in the most efficient way possible. In some cases, that will be Chinese firms acquiring U.S. ones, but in many other cases it would involve U.S. firms expanding into China. 

This issue of getting China to open up its protected markets is high on the policy agenda of the United States and other major economies. The United States has been negotiating with China over a Bilateral Investment Treaty (BIT) that would be based on a small negative list; that is, there would be a small number of agreed sectors that remain closed on each side, but otherwise investment would be open in both directions. So far, however, negotiations on the BIT have been slow. It is difficult for China to come up with an offer that includes only a small number of protected sectors. And there are questions as to whether the U.S. Congress would approve an investment treaty with China in the current political environment, even if a good one were negotiated.

The issue of lack of reciprocity between China’s investment openness and the U.S. system is one of the thorniest issues in the bilateral relationship.

The issue of lack of reciprocity between China’s investment openness and the U.S. system is one of the thorniest issues in the bilateral relationship. A new president will have to take a serious look at the CFIUS process and the enabling legislation and consider what combination of carrots and sticks would accelerate the opening of China’s markets. In terms of sticks, the United States could consider an amendment to the CFIUS legislation that would limit acquisitions by state enterprises from countries with which the United States does not have a bilateral investment treaty. In terms of carrots, the best move for the United States is to approve the Trans-Pacific Partnership and implement it well so that there is deeper integration among like-minded countries in Asia-Pacific. Success in this will encourage China to open up further and eventually meet the high standards set by TPP. Greater investment openness is part of China’s own reform plan but it clearly needs incentives to make real progress. 

For more on this and related topics, please see David Dollar's new paper, "China as a global investor."

Chinese President Xi Jinping is paying a US visit to attend the 4th Nuclear Security Summit. A US-based scholar noted that the trip not only shows China’s will to beef up cooperation with the rest of the world, but also signals that China, which has kept a low-profile, is ready to play a bigger role in global governance.

During the two-day summit starting from Thursday, President Xi will also meet with his US counterpart Barack Obama.

Li Cheng, director of the John L. Thornton China Center of the Brookings Institute, said that Xi’s second visit to Washington DC in six months highlights that the two major powers are seeking cooperation rather than confrontation.

The new type of major-power ties between the two nations, with win-win cooperation and mutual respect at its core, advocates collaboration rather than conflict, saidLi, explaining that such a relationship emphasizes a desire for cooperation.

He also pointed out that Xi’s attendance at the summit shows China's willingness to further collaborate with the international community. "His attendance will be greatly welcomed," Li stressed, adding that China now plays a crucial role in climate change, cyber security, nuclear security and global economic governance.

"As a major power, China's voice should be heard, and views should be delivered," said Li. He also noted that the international community will continue to respect China's growing role in international affairs.

Though China has previously maintained a low-profile in global governance, its role has since increased, the scholar commented.

Along with its rising international status, China also shoulders more responsibilities and obligations in narrowing the rich-poor gap, promoting South-South Cooperation and other global affairs, he added.

Li also applauded the momentum of Sino-US ties, saying that the leaders of both nations are making far-sighted choices based on an expandedworld view and their fundamental interests.

Though some disputes emerged, they are far outweighed by bilateral cooperation, he noted, especially praising their collaboration in global issues.

"I believe their worldwide cooperation will generate a spillover effect, so that the two will better understand each other and advance cooperation," said Li. 

This piece originally appeared in People's Daily.

As the G-20 Summit concluded in Brisbane, Australia on November 16th, it set a target to achieve an incremental jump in global GDP growth of 2 percent by 2018 and made commitments to creating a Global Infrastructure Investment Initiative (GIII) to address an estimated $5 trillion per year in infrastructure needs around the world. 

It is a valid policy idea to expose the gap between current and potential rates of economic growth to the public. That the Australians put the spotlight on this growth gap was the central achievement of their G-20 Summit in Brisbane. It is a contribution to the global effort to energize the global economy and generate both greater and smarter growth. The question is, will it work? 

The gap between potential and actual growth has more to do with the patterns and sources of growth than the rates of growth. It is certainly necessary to continue to use monetary and fiscal policy to stimulate aggregate, demand-driven growth, but it will not be not sufficient.  

The people-problem in global growth has to do with structural obstacles: market dynamics of globalization tend to increase income inequality; technologies can be labor displacing rather than labor absorbing; and the knowledge-economy requires technical skills that are more sophisticated than investment-driven industrialization.  

As a result, the focus is now on structural policies and reforms, an issue on which the OECD has been an international leader. OECD Secretary General Angel Gurria jointly released an OECD report with Australia Minister of Finance Joseph Hockey in February of this year. At the G-20 Summit in Brisbane, Gurria said that it was possible that the global growth effort by the G-20, which the OECD and IMF are monitoring, could “overshoot” the 2 percent target.  

Discussing structural reforms tends to “get in the weeds” quickly, since the details vary by each country’s circumstances—as made clear by Brisbane’s G-20 Action Plan. Going from the Brisbane G-20 Summit to regional, ministerial, and national agendas and actions becomes the next phase in this effort to boost global growth by shifting the patterns and sources of growth. 

A key component in closing the growth gap will be the aforementioned Global Infrastructure Investment Initiative. The GIII is the culmination of a long discussion involving the G-20, the World Bank, the regional development banks, the private sector and others on how to accelerate much-needed investment in infrastructure—globally, and on a scale that can make a difference, especially in an era of fiscal policy constraints.  

The relationship between private and public investment in global infrastructure and other global growth projects is tricky. Just because many governments face reduced flexibility with fiscal policy at the moment does not mean that the responsibility for infrastructure investment can or will or should be picked up by private investors, much less private financial institutions and markets. The public and private sector each have a vital role. One will not work without the other.

Yet rules and norms do have to be worked out to incentivize private investment in infrastructure. This work is well underway and embodied in the Brisbane GIII. Incremental investment in global infrastructure adds up over time, and prudent direction of financing toward the most impactful projects can be a big boost to global growth and directly have an impact on peoples' lives. This is the kind of people-oriented action G-20 leaders were looking for in Brisbane.

Setting incremental “reach goals” is not just a word game or publicity play. It has proven to be a means of mobilizing resources, policies and efforts by diverse actors to stimulate higher-order results than might otherwise have happened. Just engaging in projecting likely growth outcomes can set the bar too low. In fact, all global goal setting is meant to motivate and mobilize momentum for just such incremental efforts. 

Taken together, a combination of structural reforms, infrastructure investment and continued growth-oriented monetary and fiscal policies can make a real difference in boosting global growth. This combination makes the Brisbane target of an additional 2 percent of global GDP growth by 2018 a feasible, even if ambitious, goal.

“Although we are seeing a strengthening recovery in the United States, the overall performance of the global economy continues to fall short of aspirations,” said Treasury Undersecretary for International Affairs Nathan Sheets to a Brookings audience yesterday. In the event, hosted by the Global Economy and Development program and the Economic Studies program at Brookings, Undersecretary Sheets described six “pillars” that form his offices “core policy agenda for the years ahead” to support “a growing and vibrant U.S. economy.”

1. Strengthening and rebalancing global growth. Undersecretary Sheets noted the “persistent and deeper asymmetry in the international economic landscape,” and called for policymakers to “work together toward mutually beneficial growth strategies” such as boosting demand.
2. Deepening engagement with emerging-market giants, such as China, India, Mexico, and Brazil. On India, for example, the undersecretary noted that “faster growth, deeper financial markets, and greater openness to trade and foreign investment promise to raise incomes, reduce poverty, and bring many more Indians into the global middle class.”
3. Framing a resilient global financial system. “To be sustained,” he said, “growth must be built on a resilient financial foundation.” (See also Federal Reserve Governor Lael Brainard’s remarks yesterday on the Fed’s role in financial stability.)
4. Enhancing access to capital in developing countries. “Expanding access to financial services for the over 2 billion unbanked people in the world promises to open new possibilities as the financial wherewithal in these populations grows,” he said.
5. Promoting open trade and investment. Undersecretary Sheets explained that “Increased U.S. access to foreign markets, and the consequent rise in exports of our goods and services, is an important source of job creation in the United States.” He described current trade priorities, including the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), the Information Technology Agreement (ITA) concerning China, and the Trade Facilitation Agreement (TFA) concerning India.
6. Enhancing U.S. leadership in the IMF. Undersecretary Sheets said that Treasury and the Obama administration “are firmly committed to securing approval for the 2010 IMF quota and governance reforms.” Citing the widespread support already in place for these policies, Sheets argued that “without these reforms, emerging economies may well look outside the IMF and the international economic system we helped design, potentially undermining the Fund’s ability to serve as a first responder for financial crises around the world, and also our national security and economic well-being.” He also called on the Senate to confirm six administration nominees as executive directors or alternate executive directors at the IMF and multilateral development banks.

Watch the video here:

Get a transcript of Undersecretary Sheets’ prepared remarks here.

Brookings expert Donald Kohn, the Robert S. Kerr Senior Fellow, moderated the discussion. The speaker was introduced by Senior Fellow Amar Bhattacharya.

We will likely look back on 2015 as a consequential year in China’s evolving global strategy. The September crash of the stock market in Shanghai marks the first contemporary occasion when China’s internal difficulties have had global consequences. In November, China will take over the leadership of the G-20 and have an opportunity to put its stamp on the evolving tools of global governance. And on September 28, President Xi Jinping will address the world during the 70th anniversary of the only global body in which China already has full powers—the United Nations.

A rising power, cut from different cloth

But with greater consequence comes greater responsibility. President Xi’s job at the U.N. in 2015 will be harder than in recent years. For the past several years the international community has been transfixed by the narrative of the rising powers, and of American, or at least Western, decline. Now, America’s economic recovery, its energy revolution, its leadership on Ebola, and its re-engagement around the Islamic State (or ISIS)—however partial—has gutted the “American decline” narrative. 

And Xi’s putative allies in the forging of a post-American order—Russia, Brazil, and India—won’t be nearly the help to China they have often been presumed to be. President Vladimir Putin will speak against the backdrop of Russia’s aggressive strategy in Ukraine and now Syria; Brazil’s President Dilma Roussef against the backdrop of a deep recession and a huge corruption scandal; and while President Narendra Modi is still riding relatively high internationally, he’s hardly riding in a pro-China direction. 

China is more consequential than any of these other three, of course. But it faces its own challenge to its narrative as it doubles down on its assertive posture in the South China Sea and as its handling of the stock market collapse shows serious cracks in the narrative of the “Beijing model.” As Chinese growth has slowed, especially in the manufacturing sector, so has its consumption of global commodities—and the knock-on effect has been slower growth in dozens of developing countries that had ridden China’s boom. China isn’t quite the alternative “pole” to the West it has been hyped to be. 

Still, China is now clearly the number two economy in the world; the number two defense spender; the dominant force in politics and economic integration in East Asia; and an increasingly important voice on global issues. So hype and narrative aside, the world will be listening closely to what President Xi has to say at the U.N.—as they will when he takes the reigns of the G-20. 

In what direction is Chinese leadership heading?

At a 700-person-strong gala dinner in Seattle on Tuesday, President Xi rehearsed the arguments. China is committed to a peaceful rise. China has learned the lesson of the Second World War, and recognizes that military hegemony is not an option. China is committed to the multilateral order, and the U.N. Charter. He even teased the international relations scholarly community: “There is no Thucydides trap,” he said, referring to the idea that the growth of Chinese power will cause fear in the United States and lead to war. He stressed his theme about forging a “new kind of great power relations” that eschewed military competition for more creative approaches to cooperation on win/win issues. 

All these would be welcome messages at the U.N., and if he means it, they are profoundly important messages. But if Xi wants these messages to be believed, if he wants to gain credibility at the global level, he’s going to have to do more than just talk a good game. 

First, China is going to have to start acknowledging that leadership is less about abusing the privileges of power and more about absorbing costs. The world may be hungry for leadership, but it’s not hungry for leadership of the abusive kind. It’s hungry for actors capable and willing to set a direction and bear the lion’s share of the costs of action—because that’s the only thing that’s ever overcome the collective action challenges that otherwise bedevil cooperation at the international level. 

China is going to have to start acknowledging that leadership is less about abusing the privileges of power and more about absorbing costs.

Second, he has to put his strategy where his principles are. He could start with the U.N. Charter. It’s an essential document of the international order, but only if the great powers abide by its essential principles (not by every detail.) The most essential of these are the prohibition against the acquisition of territory by force and the assertion of non-interference in sovereign affairs (except with the backing of the Security Council). The United States has violated these principles, notably in Iraq—its violation was of a temporary nature, of course, but had huge consequences. Russia has violated these principles—its violation in Crimea is modest in scale but notionally permanent and a fundamental violation of the foundational principles of the U.N.

China’s actions in the South China Sea have been more subtle than these, but no less invidious or injurious to the notion of a stable international order. If China wants others to believe that it still intends for its rise to be peaceful, it needs urgently to shift strategy in the South China Sea—and it would be in a strong position, then, to call on the other great powers to recommit themselves to the principle of the non-use of force and respect for sovereignty. 

[Xi] has to put his strategy where his principles are. He could start with the U.N. Charter.

I’m reasonably optimistic about the first idea. China was among the most neuralgic of countries when it came to the global response to SARS a decade ago; it’s learned its lesson and was far more forward leaning on Ebola. It chipped in, albeit not to scale, on the eurocrisis. It’s made financial contributions to the counter-ISIS campaign. And it’s made commitments that, if kept, will make a vital difference on the climate. These efforts represent a serious start, and if President Xi expands China’s role in this kind of leadership it could position him well on global issues—especially during his G-20 presidency. 

I’m not so optimistic about the second. China shows every sign of being locked in an assertive-tilting-to-aggressive strategy in the South China Sea, consequences be damned. And with Russia also seemingly locked into a “wrong-foot the West” strategy, the United States and its allies will increasingly be pulled into an escalatory response—creating exactly the kind of Thucydidean trap President Xi ostensibly wants to avoid. (The United States bears responsibility here too, and it can also take steps to lower tensions in Asia.) 

The problem is, the further out we go along the pathway of security tensions in Asia, the more we undermine the prospects for win-win cooperation on global challenges like terrorism and climate. For now, these twin strands of strategy are in roughly equal balance—both rivalry and restraint are leitmotifs of Xi’s worldview, and of America’s. But 2015 is going to be an important testing time for the viability of this dual-strand approach. If Xi wants to start tilting the balance to win/win approaches, his speech at the U.N. is a good place to start. But even that would only be a beginning.

Event Information

As China presides over the G-20 for the first time, the country has the significant opportunity to impact a system of global governance under increasing stress. At the same time, while enduring the costs and realizing the benefits of its leadership role, China can address critical issues including innovation, global security, infrastructure development, and climate change. Even as China recently has made its own forays into regional institution-building with the launch of the Asia Infrastructure Investment Bank and the “One Belt, One Road” initiative, its G-20 presidency presents a new platform from which the country can advance its own agenda as part of a broader global agenda. As the first and second largest economies in the world, the United States and China can benefit enormously by understanding each other’s perspective.

Think tanks like the Brookings-Tsinghua Center have been playing an important role in this bilateral and multilateral exchange of views. On March 22, in celebration of the 10th anniversaries of the Brookings-Tsinghua Center and the John L. Thornton China Center at Brookings, Tsinghua University hosted a conference to examine how China can realize the 2016 G-20 theme of “an innovative, invigorated, interconnected, and inclusive world economy.” The event began with introductory keynote remarks on the substantive advancements China and the United States have made in think tank development and people-to-people diplomacy, followed by an additional set of keynote remarks and panel discussions presenting Chinese and American perspectives on the G-20 agenda and the state of global governance.

Event Materials

• Chinas G20 Presidency Transcript

For the past several years, international affairs have been analyzed through two lenses. One lens has focused on geopolitics: in particular, the question of how great power relations are evolving at a time of redistribution in the world’s economic and now also political power. The second lens considers the framework of global governance, especially the question of whether or not the existing formal and informal institutions have the tools and the ability to manage complex global challenges.

China's presidency of the G-20 bridges the issues of global governance and great power relations. At a basic level, the G-20 will set a tone for how major powers attempt to tackle the challenges that confront us all.

China’s assumption of the G-20 chairmanship in 2016 marks an important symbolic threshold. It is the first time a major non-Western power will chair the world’s premier body for international economic cooperation—not to mention one of the world’s most important geopolitical bodies, as well. China’s presidency comes at an important time in the substance of the G-20’s agenda, too, as a slowing Chinese economy is integral to the dynamics of an overall slowing global economy. As such, this event offers an opportunity to reflect on geopolitics and global governance—and the way forward. In short, what is the state of international order? 

Heading down a bumpy road?

There is little doubt that we are at an important inflection point in international order. For the past 25 years, the international system—with its win-win economic structures—has been relatively stable. But this order is under challenge and threat, and it is eroding. We risk the rise of a lose-lose international system, encompassing a deterioration of the security relations between great powers, and a breakdown of the basic structures of international cooperation. 

That may be the worst-case scenario, but it is a plausible one. Countries must be vigilant about preventing this outcome. Even though the established powers and the so-called emerging powers (clearly China is an emerged power) may not hold the same views about the content of international order, all sides have a stake in pursuing intense negotiations and engaging in debate and dialogue. It is imperative that parties find a middle ground that preserves key elements of the existing order while introducing some degree of adaptation, such that this order does not collapse.

For the past 25 years, the international system—with its win-win economic structures—has been relatively stable. But this order is under challenge and threat, and it is eroding.

A version of this kind of negotiation may occur later this year. Japan’s presidency of the G-7 will begin just ahead of China's presidency of the G-20, putting important issues into sharp relief. As the older, Western-oriented tool for managing global issues, the G-7 still focuses on global economics but increasingly tackles cross-cutting and security issues. The G-20 is the newer, multipolar tool through which both emerged and emerging powers collaborate—but, so far, members have limited their deliberations to economic issues. The two processes together will reveal the tensions and opportunities for improvement in great power relations and in geopolitics. 

Of particular note is where political and security issues fall on the dockets of these two bodies. Although the G-20 did tackle the Syria crisis at its St. Petersburg meeting in 2013, political and security issues have otherwise not been part of the group’s agenda. But these topics form an important part of the landscape of great power politics and global governance, and they are issues for which we find ourselves in very difficult waters. Tensions between the West—particularly Europe—and Russia are running high, just as disputes are mounting in Northeast Asia. The question of America’s naval role in the Western Pacific and China’s claims of a nine-dash line are serious flash points in the U.S.-China relationship, and we should not pretend that they are not increasingly difficult to manage, because they clearly are.

I believe it is shortsighted for the G-20 not to take up some of these tense security issues.

These are not part of the formal agenda of the G-20, but they should be. Although many economists may disagree with me, I believe it is shortsighted for the G-20 not to take up some of these tense security issues. The group’s argument has been to focus on economic issues, for which there are shared interests and progress can be made, which is a fair point. But history tells us that having difficult, tense issues involving a number of stakeholders leads to one of two scenarios: either these issues are managed in a credible forum, or tensions escalate and grow into conflict. There is no third option. Moreover, these are not issues that can be resolved bilaterally. They have to be settled in a multilateral forum.

In 2016, Japan will take up the issue of the South China Sea in the G-7—a scenario that is far from ideal, since key stakeholders will not be present. Even so, the G-20 refuses to take up security issues, leaving countries without an inclusive forum to deal with these tense security concerns. Of course, they could be raised in the U.N. Security Council, but that is a crisis management tool. We should be building political relations and involving leaders in preventing great power conflict, all of which, by and large, does not happen at the U.N. But it could happen at the G-20. 

With great power comes great responsibility

A better dynamic is at work with respect to the issues of climate change and global energy policy. The Paris climate accords are counted as a major breakthrough in global governance. To understand how the outcome in Paris was achieved, we have to look again at great power relations. What really broke the logjam of stale and unproductive negotiations was the agreement struck between President Xi and President Obama. Their compact on short-lived climate pollutants transformed the global diplomacy around climate change, yielding the broader agreement in Paris.

[G]reat power status primarily entails a responsibility to act first in resolving tough global challenges and absorbing costs.

Why did the U.S.-China agreement on climate change facilitate the Paris climate accords? The United States and China did not impose a framework, nor did they insist on a particular process or stipulate a set of rules. What they did was lead. They acted first and they absorbed costs. This is the essence of the relationship between great power politics and global governance.

Great power status confers a certain set of privileges, not least of which is a certain degree of autonomy. To that end, the United States has avoided multilateral rules more than other countries, and other countries may aspire to that status. But the larger point is that great power status primarily entails a responsibility to act first in resolving tough global challenges and absorbing costs. That is how great powers lead through a framework of global governance. In today’s world, where global governance will necessarily be more multipolar than in the past, we have to find new approaches to sharing the burdens of moving first and absorbing costs. That is, far and away, the most likely way to maintain a relatively stable but continuously adapting international order—one that is empowered to tackle global challenges and soothe geopolitical tensions.

Event Information

On July 30-31, 2004, more than 40 preeminent international leaders from the public, private, and non-profit sectors came together at the Aspen Institute to discuss "America's Role in the Fight Against Global Poverty" and to set out a forward-looking strategy for the United States.

Co-hosted by Richard C. Blum of Blum Capital Partners LP, the Brookings Institution's Poverty and Global Economy Initiative, the Aspen Institute, and Realizing Rights: The Ethical Globalization Initiative, the group's aim was to explore the dilemma of global poverty from different perspectives, to disaggregate the seemingly intractable problem into more manageable challenges, and to identify key elements of an effective U.S. policy agenda.

With roundtable participants hailing from around the world and representing diverse experiences and approaches, the dialogue was as multifaceted as the challenge of poverty itself. Rather than simply summarize conference proceedings, this essay attempts to weave together the thoughtful exchanges, impassioned calls to action, fresh insights, and innovative ideas that characterized the discussion, and to set the stage for ongoing collaboration in the struggle for human dignity.

Helping to define the issues, share and encourage what works, and build the intellectual framework for such an enterprise will be the guiding mission of the Richard C. Blum Roundtable in the years ahead.


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Event Information

From August 3 to 6, 2005, fifty preeminent international leaders from the public, private, and nonprofit sectors came together at the Aspen Institute for a roundtable, "The Private Sector in the Fight against Global Poverty."

The roundtable was hosted by Richard C. Blum of Blum Capital Partners and Strobe Talbott and Lael Brainard of the Brookings Institution, with the active support of honorary cochairs Walter Isaacson of the Aspen Institute and Mary Robinson of Realizing Rights: The Ethical Globalization Initiative. By highlighting the power of the market to help achieve social and economic progress in the world's poorest nations, the roundtable's organizers hoped to galvanize the private, public, and nonprofit sectors to move beyond argument and analysis to action. Put simply, as Brookings president Strobe Talbott explained, the roundtable's work was "brainstorming with a purpose."

With experts hailing from around the world and representing diverse sectors and approaches, the dialogue was as multilayered as the challenge of poverty itself. Rather than summarize the conference proceedings, this essay weaves together the thoughtful observations, fresh insights, and innovative ideas that characterized the discussion. A companion volume, Transforming the Development Landscape: The Role of the Private Sector, contains papers by conference participants, providing in-depth analysis of each conference topic.

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Event Information

The context for aid is changing. Globalization has spurred economic convergence, upending the twentieth century economic balance and creating a smaller world where both problems and solutions spill across national borders more readily. This has given rise to a legion of new development actors, including emerging economies, NGOs, private businesses, and coordinating networks, who have brought fresh energy and resources to the field while rendering the prospect of genuine donor coordination ever more difficult. Global integration and competition for resources has raised the prominence of global public goods, whose equitable and sustainable provision requires international collective action. Meanwhile, poor countries are demanding a new form of partnership with the international community, built upon the principles of country ownership and mutual accountability.

From G-20 meetings and the upcoming High Level Forum on Aid Effectiveness in Korea to unfolding events in the Middle East and North Africa, leadership from the United States is crucial, placing pressure on the Obama administration to deliver on its promise of far-reaching reforms to U.S. global development efforts. And amidst this shifting global landscape is the issue of effectively communicating the importance of global development cooperation to both a national and global public, at a time when budget pressures are being felt across many of the world’s major economies

At the eighth annual Brookings Blum Roundtable, co-chaired by Kemal Derviş and Richard C. Blum, 50 thought-leaders in international development came together to discuss a new role for global development cooperation, one that employs inclusive and innovative approaches for tackling contemporary development problems and that leverages the resources of a large field of actors.

Roundtable Agenda

Wednesday, August 3, 2011

Welcome: 8:40 a.m. – 9:00 a.m.
Open Remarks
• Richard C. Blum, Blum Capital Partners, LP and Founder of the Blum Center for 
Developing Economies at Berkeley
• Mark Suzman, Global Development Program, Bill & Melinda Gates Foundation
• Kemal Derviş, Global Economy and Development, Brookings

Statement of Purpose, Scene Setter, Comments on the Agenda
• Homi Kharas, Brookings

Session I: 9:00AM - 10:30AM
Reframing Development Cooperation
In almost any discussion of international development, foreign aid takes center stage. But while 
aid can certainly be a catalyst for development, it does not work in isolation. Participants will 
discuss the key objectives of development cooperation, consider what measures of development 
cooperation are most valuable for recipients, and explore an effective balance of roles and 
responsibilities - including both public and private players - in today’s evolving development 
landscape.

Moderator
• Walter Isaacson, Aspen Institute

Introductory Remarks
• Owen Barder, Center for Global Development
• Donald Kaberuka, African Development Bank Group
• Ananya Roy, University of California, Berkeley
• Elizabeth Littlefield, Overseas Private Investment Corporation

Session II: 10:50AM - 12:20PM
The G-20's Development Agenda
Last year’s G-20 meeting in Seoul marked the first time the group formally took up the issue of development. There they announced the Seoul Development Consensus for Shared Growth and the Multi-Year Action Plan for Development: two far-reaching policies which are expected to guide the G20’s future agenda. What is the G-20’s comparative advantage vis-à-vis development, and how can the group’s development efforts be strengthened and supported?

Moderator
• Mark Suzman, Bill and Melinda Gates Foundation

Introductory Remarks
• Alan Hirsch, The Presidency, South Africa
• Suman Bery, International Growth Centre
• Homi Kharas, Brookings

Dinner Program: 6:00PM - 9:00PM
A Conversation with Al Gore and Mary Robinson
Topic: "Energy Security and Climate Justice"

Moderator
• Kemal Derviş, Global Economy and Development, Brookings

Thursday, August 4, 2012 

Session III: 9:00AM - 10:30AM 
The Road to Buscan
In November, participants from over 150 countries, including ministers of developing and developed countries, heads of bilateral and multilateral development institutions, and civil society representatives, will take part in the fourth High Level Forum on Aid Effectiveness in Busan, South Korea. The forum is intended to take account of the development community’s progress in achieving greater impact through aid and to redefine the aid effectiveness agenda to adjust to a changing global landscape. What would constitute success or failure at Busan?

Moderator
• Raymond Offenheiser, Oxfam America

Introductory Remarks
• J. Brian Atwood, Organisation of Economic Co-operation and Development, 
Development Assistance Committee 
• Wonhyuk Lim, Korean Development Institute
• Ngozi Okonjo-Iweala, World Bank 
• Steven Radelet, U.S. Agency for International Development 

Session IV: 10:50AM - 12:20PM 
Lessons from the Middle East on Governance and Aid
Popular protests across the Middle East against authoritarian regimes have prompted reflection 
on the role of aid to non-democratic and poorly governed countries. Some critics believe that aid 
should only be given to relatively well-governed countries where it is more likely to be effective, 
but for others, this amounts to collective punishment for the people who suffer under such 
governments. Do aid allocation models need to change and what role can the development 
community now play in supporting peaceful, democratic reform in the Middle East?

Moderator
• Madeleine K. Albright, Albright Stonebridge Group

Introductory Remarks
• Ragui Assaad, University of Minnesota
• Sheila Herrling, Millennium Challenge Corporation
• Tarik Yousef, Silatech

Lunch Program: 12:30PM - 2:00PM
A Conversation with Thomas R. Nides, U.S. Deputy Secretary of State for Management and Resources

Moderator
• Richard C. Blum, Blum Capital Partners, LP and Founder of the Blum Center for Developing Economies at Berkeley

Session V: 9:00AM - 10:30AM
Implementing U.S. Development Reforms 
The end of 2010 saw the completion of two major policy reviews in Washington concerned with 
international development: the Presidential Policy Directive on Global Development and the 
Quadrennial Diplomacy and Development Review. Progress on implementation has been 
significant in many respects and meager in others. Additionally, despite directives to deliver on 
many valuable priorities for improvement, essential components of fundamental reform are still 
in need of address. Casting a shadow across the exercise, or alternatively serving as a spur to 
focus, the budget environment has soured.

Moderator
• Jim Kolbe, German Marshall Fund of the United States

Introductory Remarks
• Rajiv Shah, U.S. Agency for International Development
• Samina Ahmed, International Crisis Group
• Robert Mosbacher, Jr., Mosbacher Energy Company

Session VI: 10:50AM - 12:20PM
Communicating Development Cooperation
Public interest in and support for aid matter. Yet in many aid giving countries, there is 
widespread cynicism as to what end aid programs serve and ignorance as to what activities they 
actually involve. What are the best examples of development efforts which have been 
communicated successfully and what can we learn from this to shore up support for 
development cooperation now and in the future?

Moderator 
• Liz Schrayer, U.S. Global Leadership Coalition

Introductory Remarks 
• Steven Kull, Program on International Policy Attitudes
• Joshua Bolten, ONE
• S. Shankar Sastry, University of California, Berkeley
• Jack Leslie, Weber Shandwick

Closing Remarks: 12:20PM- 12:30PM
• Richard C. Blum, Blum Capital Partners, LP and Founder of the Blum Center for 
Developing Economies at Berkeley
• Kemal Derviş, Global Economy and Development, Brookings

Public Event: 4:00PM - 5:30PM
Brookings and the Aspen Institute present “Development as National Security?”: A Conversation with Rajiv Shah, U.S. Agency for International Development; Sylvia Mathews Burwell, Bill & Melinda Gates Foundation; Richard J. Danzig, Center for a New American Security; and Susan C. Schwab, University of Maryland.

Moderator
• Jessica Tuchman Mathews, Carnegie Endowment for International Peace

Welcome and Introductions
• Kemal Derviş, Brookings

Hosts
• Richard C. Blum and Senator Dianne Feinstein

Event Information

Lifting an estimated 1.2 billion people from extreme poverty over the next generation will require robust and broadly-shared economic growth throughout the developing world that is sufficient to generate decent jobs for an ever-expanding global labor force. Innovative but affordable solutions must also be found to meet people’s demand for basic needs like food, housing, a quality education and access to energy resources. And major investments will still be required to effectively address global development challenges, such as climate change and child and maternal health.  On all these fronts, the private sector, from small- and medium-sized enterprises to major global corporations, must play a significant and expanded role.

On August 4-6, 2013, Brookings Global Economy and Development is hosting the tenth annual Brookings Blum Roundtable on Global Poverty in Aspen, Colorado. This year’s roundtable theme, “The Private Sector in the New Global Development Agenda,” brings together global leaders, entrepreneurs, practitioners and public intellectuals to discuss how the contribution of the private sector be enhanced in the push to end poverty over the next generation and how government work more effectively with the private sector to leverage its investments in developing countries. 

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Roundtable Agenda

Sunday, August 4, 2013

Welcome: 8:40AM - 9:00AM MST
Brookings Welcome
• Strobe Talbott, Brookings

Opening Remarks
• Richard C. Blum, Blum Capital Partners, LP and Founder of 
the Blum Center for Developing Economies at UC Berkeley
• Julie Sunderland, Bill and Melinda Gates Foundation
• Kemal Derviş, Global Economy and Development, Brookings

Session I: 9:00AM - 10:30AM MST
Framing Session: Reimagining the Role of the Private Sector
In this opening discussion, participants will explore the overarching questions for the roundtable: How can the contribution of the private sector be enhanced in the push to end poverty over the next generation? What are the most effective mechanisms for strengthening private sector accountability? How can business practices and norms be encouraged that support sustainable development and job creation? How can business build trust in its contributions to sustainable development?

Moderator
• Nancy Birdsall, Center for Global Development

Introductory Remarks
• Homi Kharas, Brookings Institution
• Viswanathan Shankar, Standard Chartered Bank
• Shannon May, Bridge International Academies


Session II: 10:50AM - 12:20PM MST
Private Equity
Participants will explore the following questions for the roundtable: What are the constraints to higher levels of private equity in the developing world, including in non-traditional sectors? How can early-stage investments be promoted to improve deal flow? How can transaction costs and technical assistance costs be lowered?

Moderator
• Laura Tyson, University of California, Berkeley

Introductory Remarks
• Robert van Zwieten, Emerging Markets Private Equity Association
• Runa Alam, Development Partners International
• Vineet Rai, Aavishkaar

Dinner Program: 6:45PM - 9:15PM MST
Aspen Institute Madeleine K. Albright Global Development Lecture

Featuring
• Dr. Paul Farmer, Chief Strategist and Co-Founder, Partners in Health

Monday, August 5, 2013

Session III: 9:00AM - 10:30AM MST
Goods, Services and Jobs for the Poor
Participants will explore the following questions for the roundtable: In what areas are the most promising emerging business models that serve the poor arising? What are the major obstacles in creating and selling profitable, quality, and beneficial products to the poor and how can they be overcome? What common features distinguish successful and replicable solutions?

Moderator
• Mary Robinson, Mary Robinson Foundation

Introductory Remarks
• Ashish Karamchandani, Monitor Deloitte
• Chris Locke, GSMA
• Ajaita Shah, Frontier Markets
• Hubertus van der Vaart, SEAF

Tuesday, August 6, 2013 

Session V: 9:00AM - 10:30AM MST
Unlocking Female Entrepreneurship
Participants will explore the following questions for the roundtable: How is the global landscape for female entrepreneurship changing? What types of interventions have the greatest ability to overturn barriers to female entrepreneurship in the developing world? Who, or what institutions, should lead efforts to advance this agenda? Can progress be made without a broader effort to end economic discrimination against women?

Moderator
• Smita Singh, Independent

Introductory Remarks
• Dina Powell, Goldman Sachs
• Carmen Niethammer, IFC
• Randall Kempner, ANDE

Session VI: 10:50AM - 12:20PM MST
U.S. Leadership and Resources to Engage The Private Sector
Participants will explore the following questions for the roundtable: How can U.S. foreign assistance be strengthened to more effectively promote the role of the private sector? How can U.S. diplomacy support private sector development in the emerging economies and multinational enterprises investing in the developing world? What can the US do to promote open innovation platforms?

Moderator
• George Ingram, Brookings

Introductory Remarks
• Sam Worthington, InterAction
• John Podesta, Center for American Progress
• Rajiv Shah, USAID

Closing Remarks
• Richard C. Blum, Blum Capital Partners, LP and Founder of the Blum Center for Developing Economies at Berkeley
• Kemal Derviş, Global Economy and Development, Brookings

Public Event: 4:30PM - 6:00PM MST
Brookings and the Aspen Institute Present: "America's Fiscal Health and its Implications for International Engagement"
Global Economy and Development at Brookings and the Aspen Institute will host the 66th U.S. Secretary of State Condoleezza Rice and Administrator of the U.S. Agency for International Development Rajiv Shah for a discussion on the current state of the U.S.'s fiscal health and its impact on American diplomatic and development priorities. Moderated by Ambassador Nicholas Burns, Director, Aspen Strategy Group.

Moderator
• Nicholas Burns, Director, Aspen Strategy Group

Panelists
• Condoleezza Rice, 66th United States Secretary of State
• Rajiv Shah, Administrator of the United States Agency for International Development

Event Materials

• BBR Participant List 2013_FINAL

Event Information

The crisis over Iraq was the latest in a series of international security crises that demonstrated that the European Union has not yet emerged as unified actor on difficult global security issues. Yet since the Iraq crisis, the member states of Europe have shown a renewed interest in creating EU institutions capable of coherent action on controversial foreign policy issues, in articulating a distinct European strategy for promoting security and stability, and in establishing a European role in issues well beyond the European continent.

The Center on the United States and Europe's annual conference brought together renowned experts and policymakers from both sides of the Atlantic to examine Europe's Global Role. The first panel looked at the ongoing efforts by the United Kingdom to steer a course between and "Atlanticist" and "European" foreign policy; the second panel examined the European Union's efforts to manage its relationships with a proliferating number of candidates to the east—at the same time that it sorts out its own political future; and the last panel looked at the integration of a rising China into the international system, an extra-European issue on which the European Union and the United States have already shown signs of discord.

Welcome and Introduction:
Philip H. Gordon, Director, Center on the United States and Europe

Britain Between America and the European Union:
Philip H. Gordon

Panelists:
Anatol Lieven, Carnegie Endowment
Gerard Baker, The London Times
Charles Grant, Centre for European Reform

Where Does Europe End?
Strobe Talbott, President, The Brookings Institution

Panelists:
John Bruton, EU Ambassador to the U.S.
Sylvie Goulard, Institut d'Etudes Politiques, Paris
Andrew Moravcsik, Princeton University
Vladimir Ryzhkov, Russian Duma

The Global Agenda:
James B. Steinberg, Vice President and Director, Foreign Policy Studies, The Brookings Institution

Panelists:
R. Nicholas Burns , Undersecretary of State for Political Affairs
Jean-David Levitte, French Ambassador to the U.S.

Transcript

• Transcript (.pdf)

Event Materials

• annualconf20050511

Event Information

With a number elections now underway in Europe and the United States, populist politicians are gaining support by tapping into frustration with the lingering effects of the global financial crisis and the eurocrisis, mounting fears of terrorism, concerns surrounding record levels of migration, and growing doubt over political elites’ abilities to address these and other crises. The global economic order is already beginning to be impacted by the mounting political pressure against it. Trade deals such as the Trans-Pacific Partnership that form the cornerstone of the global economic order have met with significant resistance. Brexit’s reverberations have already been felt in international markets. Fissures within the European Union and American anxiety towards a U.S. global role could have a pronounced impact on the international economic system.

On July 14, the Brookings Project on International Order and Strategy (IOS) hosted an event tied to the recent publication of Nonresident Senior Fellow Daniel Drezner’s new paper, “Five Known Unknowns about the Next Generation Global Political Economy.” The event was an opportunity to discuss the future of the global economic order given rising populism and discontent with globalization. Panelists included Nonresident Senior Fellow Daniel Drezner, professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University; Caroline Atkinson, head of Google’s global public policy team and former White House deputy national security advisor for international economics; and David Wessel, director of the Brookings Hutchins Center on Fiscal and Monetary Policy.

Thomas Wright, director of IOS, provided brief opening remarks and moderated the discussion.

Video

• The future of the global economic order in an era of rising populism

Audio

• The future of the global economic order in an era of rising populism

Transcript

• Uncorrected Transcript (.pdf)

Event Materials

• 20160714_global_economic_order_transcript

Executive Summary

At the invitation of President George W. Bush, the G20 leaders met on November 15, 2008, in Washington, DC, in response to the worldwide financial and economic crisis. With this summit meeting the reality of global governance shifted surprisingly quickly. Previously, major global economic, social and environmental issues were debated in the small, increasingly unrepresentative and often times ineffectual circle of G8 leaders. Now, there is a larger, much more legitimate summit group which can speak for over two-thirds of the world’s population and controls 90% of the world’s economy.

The successful first G20 Summit provides a platform on which President-elect Obama can build in forging an inclusive and cooperative approach for resolving the current financial and economic crisis. Rather than get embroiled in a debate about which country is in and which country is out of the summit, the new U.S. administration should take a lead in accepting the new summit framework for now and focus on the substantive issues. Aside from tackling the current crisis, future G20 summits should also drive the reform of the international financial institutions and address other major global concerns—climate change, poverty and health, and energy among others. With its diverse and representative membership of key countries and with a well-managed process of summit preparation and follow-up the new G20 governance structure would allow for a more inclusive deliberation and more effective response to today’s complex global challenges and opportunities.

Policy Brief #168

A Successful G20 Summit—A Giant Step Forward

Once announced, there was speculation that the G20 Summit would be at best a distraction and at worst a costly failure, with a lame duck U.S. president hobbled by a crisis-wracked economy and a president-elect impotently waiting at the sidelines, with European leaders bickering over seemingly arcane matters, and with the leaders of the emerging economies sitting on the fence, unwilling or unprepared to take responsibility for fixing problems not of their making.

As it turned out, the first G20 Summit was by most standards a success. It served as a platform for heads of state to address the current financial turmoil and the threats of the emerging economic crisis facing not only the U.S. and Europeans, but increasingly also the rest of the world. The communiqué unmistakably attributes blame for the crisis where it belongs—to the advanced countries. It lays out a set of principles and priorities for crisis management and an action plan for the next four months and beyond, and it promises to address the longer-term agenda of reform of the global financial system. Very importantly, it also commits the leaders to meet again in April 2009 under the G20 umbrella. This assures that the November G20 Summit was not a one-off event, but signified the beginning of a new way of managing the world economy. The U.S. Treasury, which apparently drove the decision to hold the G20 rather than a G8 summit and which led the brief preparation process, deserves credit for this outcome.

A Long Debate over Global Governance Reform Short-circuited

With this successful summit a number of unresolved issues in global governance were pushed aside virtually overnight:

• The embarrassing efforts of past G8 summits to reach out to the leaders of emerging market economies with ad hoc invitations to join as part-time guests or through the well-meaning expedient of the “Heiligendamm Process”—under which a G8+5 process was to be institutionalized—were overtaken by the fact of the G20 summit.
• A seemingly endless debate among experts about what is the optimal size and composition for an expanded summit—G13, G14, G16, G20, etc. —was pragmatically resolved by accepting the format of the already existing G20 of finance ministers and central bank presidents, which has functioned well since 1999. With this, the Pandora’s Box of country selection remained mercifully closed. This is a major accomplishment, which is vitally important to preserve at this time.
• The idea of a “League of Democracies” as an alternative to the G8 and G20 summits, which had been debated in the U.S. election, was pushed aside by the hard reality of a financial crisis that made it clear that all the key economic players had to sit at the table, irrespective of political regime.
• Finally, the debate about whether the leaders of the industrial world would ever be willing to sit down with their peers from the emerging market economies as equals was short circuited by the picture of the U.S. president at lunch during the G20 Summit, flanked by the presidents of two of the major emerging economies, Brazil and China. This photograph perhaps best defines the new reality of global governance in the 21st Century.

Is the G20 Summit Here to Stay?

The communiqué of the November 15, 2008 Summit locked in the next G20 summit and hence ordained a sequel that appears to have enshrined the G20 as the new format to address the current global financial and economic crisis over the coming months and perhaps years. Much, of course, depends on the views of the new U.S. administration, but the November 2008 Summit has paved the way for President Obama and his team to move swiftly beyond the traditional G8 and to continue the G20 format.

In principle there is nothing wrong with exploring options for further change. However at this juncture, we strongly believe that it is best for the new U.S. administration to focus its attention on making the G20 summit format work, in terms of its ability to address the immediate crisis, and in terms of subsequently dealing with other pressing problems, such as global warming and global poverty. There may be a need to fine-tune size and composition, but more fundamental changes, in our view, can and should wait for later since arguments about composition and size—who is in and who is out—could quickly overwhelm a serious discussion of pressing substantive issues. Instead, the next G20 Summit in the United Kingdom on April 2, 2009 should stay with the standard G20 membership and get on with the important business of solving the world’s huge financial and economic problems.

One change, however, would be desirable: At the Washington Summit in November 2008 two representatives for each country were seated at the table, usually the country’s leader and finance minister. There may have been good reasons for this practice under the current circumstances, since leaders may have felt more comfortable with having the experts at their side during intense discussions of how to respond to the financial and economic crisis. In general, however, a table of 40 chairs undoubtedly is less conducive to an open and informal discussion than a table half that size. From our experience, a table of 20 can support a solid debate as long as the format is one of open give and take, rather than a delivery of scripted speeches. This is not the case for a table with 40 participants. The G8 format of leaders only at the table, with prior preparation by ministers who do not then participate in the leaders level summits, should definitely be preserved. To do otherwise would dilute the opportunity for informal discussion among leaders, which is the vital core of summit dynamics.

What Will Happen to the G8 Summit and to the G7 and G20 Meetings of Finance Ministers?

As the world’s financial storm gathered speed and intensity in recent months, the inadequacy of the traditional forums of industrial countries—the G8 group of leaders and the G7 group of finance ministers—became obvious. Does this mean that the G8 and G7 are a matter of the past? Most likely not. We would expect these forums to continue to meet for some time to come, playing a role as caucus for industrial countries. In any event, the G20 finance ministers will take on an enhanced role, since it will be the forum at which minister-level experts will lay the ground on key issues of global financial and economic management to ensure that they are effectively addressed at summit level by their leaders. The G20 Summit of November 15 was prepared by a meeting of G20 finance ministers in this fashion.

It may well be that the dynamics of interactions within the G20 will cause coalitions to be formed, shifting over time as issues and interests change. This could at times and on some issues involve a coalition of traditional G7 members. However, with increasing frequency, we would expect that some industrial countries would temporarily team-up with emerging market country members, for example on agricultural trade policies, where a coalition of Argentina, Australia, Brazil and Canada might align itself to challenge the agricultural protection policies of Europe, Japan and the United States. Or in the area of energy, a coalition among producer states, such as Indonesia, Mexico, Russia and Saudi Arabia might debate the merits of a stable energy supply and demand regime with an alliance among energy users, such as China, Europe, Japan, South Africa and the United States. It is this potential for multiple, overlapping and shifting alliances, which creates the opportunities for building trust, forcing trade-offs and forging cross-issue compromises that makes the G20 summit such an exciting opportunity.

What Should Be the Agenda of Future G20 Summits?

The communiqué of the November 2008 G20 Summit identified three main agenda items for the April 2009 follow-up summit: (1) A list of key issues for the containment of the current global financial and economic crisis; (2) a set of issues for the prevention of future global financial crises, including the reform of the international financial institutions, especially the IMF and World Bank; and (3) a push toward the successful conclusion of the Doha Round of WTO trade negotiations.

The first item is obviously a critical one if the G20 is to demonstrate its ability to help address the current crisis in a meaningful way. The second item is also important and timely. The experience with reform of the global financial institutions in the last few years has demonstrated that serious governance changes in these institutions will have to be driven by a summit-level group that is as inclusive as the G20. We would hope that Prime Minister Gordon Brown, as chair—with his exceptional economic expertise and experience in the international institutions, especially the IMF—will be able to forge a consensus at the April 2 summit in regard to reform of the international financial institutions. The third agenda item is also important, since the Doha Round is at a critical stage and its successful conclusion would send a powerful signal that the world community recognizes the importance of open trade relations in a time of crisis, when the natural tendency may be to revert to a protectionist stance.

However, we believe three additional topics should be added to the agenda for the April 2009 G20 Summit:

• First, there should be an explicit commitment to make the G20 forum a long-term feature of global governance, even as the group may wish to note that its size and composition is not written in stone, but subject to change as circumstances change.
• Second, the communiqué of the November summit stated that the G20 countries are “committed to addressing other critical challenges such as energy security and climate change, food security, the rule of law, and the fight against terrorism, poverty and disease”. This needs to be acted upon. These issues cannot be left off the table, even as the global financial and economic crisis rages. If anything, the crisis reinforces some of the key challenges which arise in these other areas and offers opportunities for a timely response. The U.K.-hosted summit should launch a G20 initiative to develop framework ideas for the post-Kyoto climate change agreement at Copenhagen.
• Third, assuming the April 2009 summit commits itself—as it should—to a continuation of the G20 summit format into the future, it must begin to address the question of how the summit process should be managed. We explore some of the possible options next.

How Should the G20 Summit Process Be Managed?

So far the G7, G8 and G20 forums have been supported by a loose organizational infrastructure. For each group the country holding the rotating year-long presidency of the forum takes over the secretariat function while a team of senior officials (the so-called “sherpas”) from each country meets during the course of the year to prepare the agenda and the communiqué for leaders and ministers. This organization has the advantage of avoiding a costly and rigid bureaucracy. It also fosters a growing level of trust and mutual understanding among the sherpas.

The problem with this approach has been two-fold: First, it led to discontinuities in focus and organization and in the monitoring of implementation. For the G20 of finance ministers, this problem was addressed in part by the introduction of a “troika” system, under with the immediate past and future G20 presidencies would work systematically with the current G20 presidency to shape the agenda and manage the preparation process. Second, particularly for the countries in the G20 with lesser administrative capacity, the responsibility for running the secretariat for a year during their country’s presidency imposed a heavy burden.

For the G20 summit, these problems will be amplified, not least because these summits will require first-rate preparation for very visible and high-level events. In addition, as the agenda of the G20 summit broadens over time, the burden of preparing a consistent multi-year agenda based on strong technical work will be such that it cannot be effectively handled when passed on year to year from one secretariat in one country to another secretariat in another country, especially when multiple ministries have to be engaged in each country. It is for this reason that the time may have come to explore setting up a very small permanent secretariat in support of the G20 summit.

The secretariat should only provide technical and logistical support for the political leadership of the troika of presidencies and for the sherpa process, but should not run the summit. That is the job of the host member governments. They must continue to run the summits, lead the preparations and drive the follow-up. The troika process will help strengthen the capacity of national governments to shoulder these burdens. Summits are the creatures of national government authorities where they have primacy, and this must remain so, even as the new summits become larger, more complex and more important.

Implications for the Obama Administration

The November 2008 G20 Summit opened a welcome and long-overdue opportunity for a dramatic and lasting change in global governance. It will be critical that the leaders of the G20 countries make the most of this opportunity at the next G20 Summit on April 2. The presence of U.S. President Obama will be a powerful signal that the United States is ready to push and where necessary lead the movement for global change. President-elect Obama’s vision of inclusion and openness and his approach to governing, which favors innovative and far-reaching pragmatic responses to key national and global challenges, make him a great candidate for this role.

We would hope that President Obama would make clear early on that:

• He supports the G20 summit as the appropriate apex institution of global governance for now;
• He may wish to discuss how to fine-tune the summit’s composition for enhanced credibility and effectiveness but without fundamentally questioning the G20 framework;
• He supports cooperative solutions to the current financial crisis along with a serious restructuring of the global financial institutions;
• He will look to the G20 summit as the right forum to address other pressing global issues, such as climate change, energy, poverty and health; and
• He is ready to explore an innovative approach to effectively manage the G20 summit process.

These steps would help ensure that the great promise of the November 2008 G20 Summit is translated into a deep and essential change in global governance. This change will allow the world to move from a governance system that continues to be dominated by the transatlantic powers of the 20th century to one which reflects the fundamentally different global economic and political realities of the 21st century. It would usher in a framework of deliberation, consultation and decision making that would make it possible to address the great global challenges and opportunities that we face today in a more effective and legitimate manner.

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Executive Summary
In order to realize the world’s commitment to ensuring education for all by 2015, important innovations and reforms will be needed in the governance and financing of global education. In 2008, Presidential Candidate Barack Obama committed to making sure that every child has the chance to learn by creating a Global Fund for Education. Secretary of State Hillary Clinton has recently called for a new architecture of global cooperation that requires institutions to “combine the efficiency and capacity for action with inclusiveness.” A new Global Fund for Education should be an independent and inclusive multi-stakeholder institution that builds upon existing institutions and supports country-driven solutions. It must be capable of mobilizing the approximately $7 billion annually still needed to achieve education for all, while holding all stakeholders accountable for achieving results with these resources.

None of these objectives will be achieved without a major rethinking of the global education architecture and an evolution of current mechanisms for financing education. More than 75 million children remain out of primary school, and only 53 of the 171 countries with available data have achieved gender parity in primary and secondary education. Achieving these two Millennium Development Goals, and the broader Education for All Goals set out by 164 countries, will require more capable international institutions. A Global Fund for Education that links funding to performance, that ensures a greater share of resources reach schools and that coordinates the efforts of diverse stakeholders is essential to putting these goals within reach.

In order to realize President Obama’s vision for creating a Global Fund for Education, significant leadership by the United States on global education will be needed in the coming year. A clear commitment by the United States to leverage the contributions of other nations and work together to support country-driven strategies through a Global Fund for Education could catalyze unprecedented international energy around achieving education for all.

Policy Brief #169

Learning from Existing and Innovative Mechanisms

The Global Fund for Education should reflect an evolution of the successful elements of existing multilateral mechanisms. Seven years ago, the Fast Track Initiative (FTI) was launched as the primary financing vehicle for achieving education for all. Working with key donors and international institutions, the FTI was supposed to mobilize the resources needed to close the massive education-financing gap. Housed within the World Bank, the FTI has not yet been able to build a strong public brand, engage the support of a number of leading donors or mobilize adequate resources from major donor countries.

The FTI has not been capable of generating resources on a scale consistent with its founding vision of achieving universal education for all. Although the FTI initially focused on expanding bilateral investments in education, in 2003 it created a multilateral Catalytic Fund to mobilize additional resources with an early focus on countries without major bilateral donors. In 2006, the FTI’s multilateral Catalytic Fund represented approximately 2% of aid commitments to basic education. Although the number of countries contributing to the Catalytic Fund has increased in recent years, many of the biggest donors are still not participating, and just three countries accounted for over 70% of total pledges in 2008. As a result, the FTI faces a shortfall of $1.2 billion for the coming year, which is more than all the money it has received from donors in the last six years. Although many countries endorsed by the FTI have experienced increases in bilateral basic education funding, their share of overall assistance focused on basic education has not increased, a fact that makes it hard to rule out the possibility that overall aid trends were largely responsible for that growth.

The FTI has recently undertaken a set of internal governance reforms designed to improve its performance, but these changes alone are unlikely to overcome some of the structural challenges it still faces. Without independent capacity for action, more inclusive governance, greater attention to conflict-affected countries and stronger accountability for results the FTI will not be able to mobilize sufficient resources or deliver the results that it was set up to achieve. At the same time, the FTI’s model of requiring and supporting the development of comprehensive national education strategies and seeking to align donor funding around these strategies should be incorporated in any evolution to a Global Fund for Education. Similarly, the FTI’s ambition of aligning bilateral flows along with multilateral funding remains an important objective to ensure that all types of donor funding are being fully leveraged.

A Global Fund for Education should also draw on the successful experience of other innovative global development financing mechanisms. Among the most successful of these new institutions is the Global Fund to Fight AIDS, Tuberculosis, and Malaria (GFATM). Since its inception, the GFATM has generated commitments of over $20 billion and is now the leading source of external financing for tuberculosis and malaria. One of the keys to the GFATM’s success in resource mobilization has been the strong engagement of both civil society and developing countries as full partners with donors in its governance. Civil society representatives and developing countries have equal standing in decision-making at the global level within the GFATM. As a result, civil society stakeholders have been at the center of the largely successful drive for resource mobilization for the Fund and partner countries are more invested in its success.

Toward a Global Fund for Education

The core mission of the Global Fund for Education should be to mobilize the financing needed to achieve universal quality education. Linking successful early learning with meaningful opportunities for secondary education, the Global Fund for Education should maintain a focus on achieving universal quality basic education for all while also supporting early childhood learning and secondary schooling as part of a comprehensive approach to education. The GFE should be guided by a set of core principles, focused on key objectives, and reflect an evolution of existing mechanisms:

1. Independent Capacity for Action

Independence from any other international institution will be essential to establish the public profile necessary to succeed in this resource mobilization challenge. The independence of the Global Fund to Fight AIDS, Tuberculosis and Malaria has been a key to its success, while the lack of independence of the FTI has been a primary obstacle to its ability to mobilize sufficient resources. An independent Global Fund for Education should still leverage the expertise and commitment of other international institutions, such as UNESCO, UNICEF and the World Bank. Technical experts from these institutions can play an important role in supporting countries both in the development of national strategies and in the effective implementation of these strategies.

2. Inclusive Governance

Inclusive governance will be critical to building a multi-stakeholder constituency that is committed to mobilizing resources. Developing countries, civil society and donor countries should be equal partners in a system in which there is equal representation and the support of each constituency is necessary for major decisions. Such a requirement in the governance structure of the GFE will not only strengthen the internal decision-making process by subjecting it to the scrutiny of diverse perspectives but will also provide external legitimacy and increase the effectiveness of its implementation efforts. Without such inclusiveness, the Global Fund for Education will not be able to succeed in either mobilizing donors to make education a top priority nor in ensuring that these resources are being well-spent in partner countries.

3. Country-Driven Solutions

Developing countries should set the agenda for the best approach for themselves through the development of comprehensive national education strategies. The Global Fund for Education should build on the FTI’s ambition of aligning donor investments around comprehensive national education plans that reflect country-driven solutions. In order to ensure that strategies are truly national—not simply government plans—the Global Fund for Education should mandate that civil society and other non-governmental stakeholders are full partners in the development of these strategies at the national level. Just as inclusive participation at the global level supports effective resource mobilization, ensuring full participation at the national-level supports effective implementation by diverse stakeholders.

4. Accountability for Results

Accountability must be central to the design of the Global Fund for Education. Systems to ensure financial accountability and that money actually reaches the school level and helps students learn are essential to the effectiveness of the Fund. Performance-based disbursement, which connects continued funding with demonstrated results, is the best way to create incentives for recipient countries to deliver on promised results. In addition, key indicators including gains in enrollment, gender equity and student learning outcomes should be included among performance measures. Utilizing improved measures for assessing student learning will be critical to improving completion rates and maximizing the development gains from education. In order to ensure some reasonable predictability of financing, countries that show strong performance should be eligible for extensions of funding over significant periods.

5. Focus on Low-Income and Conflict-Affected States

Given the inevitable limits on the resources of the Global Fund for Education, it is important to establish an allocation principle for distributing funding. First, the eligibility for funding should be limited to low-income countries, or those countries that are eligible for funding under the World Bank’s IDA window. Second, there should be special attention to the challenges of states currently experiencing or emerging from conflict and mechanisms to ensure support for education in these states. Third, the GFE should prioritize those countries categorized as least-developed and that have the most limited national resources. Finally, funding should generally be linked to the level of effort by national governments in supporting education.

6. Leverage and Align Donor Resources

The Global Fund for Education holds enormous promise for mobilizing funding from a diverse array of donors. Just as the Global Fund to Fight AIDS, Tuberculosis, and Malaria has leveraged a two-to-one match of U.S. resources from the rest of the world, the Global Fund for Education could similarly leverage global resources for education. In order to ensure adequate incentives for countries to contribute their fair share, donor board seats should be allocated and adjusted with reference to donor contributions. In addition, there should be a regularized replenishment process built into the initial design that is linked to the overall resource needs for universal education and that encourages long-term commitments by donors. The GFE should also be committed to providing multiple channels for donor assistance, both bilateral and multilateral, as long as these funds are truly aligned with national strategies. While there is a clear need to expand multilateral financing for education far beyond what has been possible to date, it is also important that ongoing bilateral commitments are much better integrated with the objectives of national education strategies.

A Global Fund for Education holds the key to delivering on the world’s commitment to education for all by 2015. Evolving current mechanisms into a more independent, inclusive, and accountable institution can catalyze the resources and performance needed to achieve universal education. Since education is one of the most leveraged of all development investments, establishing a Global Fund for Education would make a major contribution to reducing global poverty, empowering women, and promoting economic growth in low-income countries around the world.

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EXECUTIVE SUMMARY

In November 2008, President George W. Bush convened the first G-20 summit in Washington to address the worst global financial economic crisis since the Great Depression. This summit provided a long-overdue opportunity for a dramatic and lasting change in global governance. This was followed by the election of Barack Obama, who had campaigned on a distinctly different foreign policy platform compared with his Republican rival, Senator John McCain. These two events were no mere coincidence.

The global crisis has moved the United States, along with the rest of the world, toward a new global economic order, with the G-20 summit as one of the principal manifestations of the new global governance system. Of course, movement toward this new economic arrangement and progress toward reformed global governance are not inevitable. It will take a clear and sustained commitment to a new set of values and strong leadership, especially from President Obama and the United States, to ensure that the G-20 summit is not a short-lived exception to what had been a long-standing stalemate in global governance reform. The effectiveness of the G-20 in addressing the global economic crisis could lay the foundation for a new global order and provide the impetus for the many other necessary global governance reforms. Whether or not this happens will depend to a significant extent on the direction chosen by President Obama.

The president’s vision of inclusion and openness and his approach to governing, which favors innovative and far-reaching pragmatic responses to key national and global challenges, make him a great candidate for this role. In due course the G-20 summit can also serve as a platform for addressing other pressing global issues, including trade, climate change, energy and food security and reform of global institutions. To achieve such an outcome, President Obama and other world leaders need to demonstrate a clear vision and strong leadership starting at the G-20 Summit in Pittsburgh and beyond.

“Old Economic Order” versus “New Economic Order”

From recent debates on foreign policy and global governance, we have identified two different perspectives or sets of principles underlying the approaches toward U.S. and global foreign policy. Table 1 summarizes the key elements of what we call the “Old Economic Order” in juxtaposition to the “New Economic Order.”

Table 1: Old versus New Economic Order

(Note: This table is adapted from one first presented by the authors in a seminar at the IMF in June 2007. See www.imf.org/external/np/seminars/eng/2007/glb/bl030607.pdf )

In the Old Order, the nation state is the point of departure, stressing the importance of sovereignty and national interest as the key principles driving a unilateral and assertive foreign policy. In contrast, the New Order’s starting point considers that we live in a global society, where interdependency and recognition of common interests are the key principles to be pursued in reciprocal relations and with mutual respect across borders. Under the Old Order the rules of national power politics prevail, as competing blocs and fixed alliances strive for predominance, with “hard power” if necessary. Instead, the New Order operates on the basis of a new multilateralism, which builds on the prevalence of global networks in all spheres of life and multiple coalitions across borders, where bargaining for compromise and the tools of “soft power” prevail. Finally, the Old Order promotes the notion that a single economic and political model should prevail, while the New Order accepts that different economic and political models coexist and compete side by side.

In the most simple terms, the Old Order broadly reflects the principles underlying the foreign policy agenda of the Bush administration and Senator John McCain’s presidential platform, while the New Order approximates those underpinning the platform of Senator Barack Obama’s presidential campaign and of his administration’s foreign policy stance. Key elements of the Old Order (except the last one) have also been attributed to the current foreign policy approach of Russia, while New Order principles can be ascribed to the European Union.

In fact, what is reflected in these two approaches is the difference between twentieth-century principles of foreign policy versus principles appropriate to today’s realities. We believe there are three interrelated sets of drivers of change that necessitate moving from the Old Order to the New Order. These drivers include the changing global demographic and economic balance, emerging global threats and the need for a more effective global governance system.

Drivers of Change

The first driver of change is the shifting global demographic and economic balance. By 2050, the world population is projected to reach 9.1 billion, up from 6.4 billion today, with the increase occurring almost entirely in today’s developing countries. China is widely predicted to be the largest economy in the early 2040s, with the U.S. economy in second place and India’s in third. Other emerging market economies, including Brazil, Indonesia and Russia, will be important economic players, while individual European countries will recede in importance. Continental Eurasia will be the new hub of global integration as China, India, Russia, the European Union and the Middle East’s energy-producing countries knit their economies ever closer together. The United States will remain a superpower, but only one among others. Together, the major world powers will have to confront the fact that people in poorer and weaker states will feel left behind. Simultaneously, cross-border networks—economic and political, public and private, elite and grassroots, legitimate and illegitimate—will continue to grow and will weaken the traditional hold states have over the economic, financial, social and political actions of their citizens. These networks will create bonds that will either reinforce or undermine global stability.

The second driver of change is a set of emerging global threats:

• The current financial and economic crisis—triggered by poor macroeconomic management and lax financial regulation—reflects the realities of long-term financial imbalances among key economies. It proves the difficulties of managing a highly interdependent global financial system in the absence of agreed-upon global financial surveillance, supervision and regulation. It is likely that risks of global financial stress will continue in the coming decades.
• Global disparities will increase as the rich and the rapidly growing economies do well, while many poor and stagnating countries are left behind. There is potential for rising disparities within countries, too. These inequities will reinforce risks of domestic and cross-border conflict and terrorism. At the same time, the United States and other industrialized countries face a progressive loss of traditional industries, jobs and wages. Aging populations and overburdened pension systems will challenge their fiscal stability and may lead to groundswells of anti-globalization sentiments.
• Rising food and energy prices, environmental threats and the risks of global epidemics—reinforced by population pressures—particularly affect the poorest countries.
• Growing global interdependencies across borders and sectoral lines mean that individual countries can no longer address these threats alone and that a global response has to be coordinated across sectors.

The third driver of change is the growing and widespread recognition that the current system of global governance has become increasingly fragmented, ineffective, outdated and resistant to change. This systemic weakness is reflected in the persistent stalemate on many of the pressing global issues—most notably the Doha trade round—but also on global poverty, climate change and the risk of pandemics. Moreover, global institutions have become unrepresentative in the face of the changed global economic and political balances. Hence their legitimacy is suffering badly, and yet there is stalemate in the reform of individual international organizations.

Together, these three factors have made the principles of the Old Order irrelevant and strongly point in the direction of a New Order. They represent the new reality for governments, citizens and international institutions and force them to adopt new principles and reform existing institutions.

While the drivers are strong and the new global reality is seemingly unassailable, change is not inevitable. Old habits die hard. In the United States, traditions of self-reliance and “exceptionalism” continue to shape Americans’ views of the rest of the world. At the same time, the widespread belief in the virtues of unfettered markets and low taxes, the influence of special interests for protection (agriculture, labor, old industry, banking) and the prevailing fractiousness of political decision-making may well undermine President Obama’s efforts to move toward a new global paradigm. Compounding the entrenchment of the Old Order, new nations that are still recovering from centuries of colonialism—facing economic and political instability and wishing to catch up with the successful industrial countries—are lured to a strong sovereign nation state, unfettered control over their borders and their citizens, and a confrontational approach to foreign policy. Even the much admired willingness of the Europeans to give up sovereignty in favor of supranational institutions has its limits, not least when it comes to giving up their prerogatives of dominating the governing boards of the international financial institutions and other global forums.

Leadership, conviction and persistence will be required among many actors on the global stage to ensure there is progress toward effective reform of global institutions. This potential for change is exemplified by the recent emergence of the G-20 summit as a vehicle for global governance.

The G-20 Summit—Origins, Options and Obstacles

Origins. The G-20 summit had its origins in the annual meetings of the G7—the leaders of a group of seven major Western industrial countries who gathered annually starting in the 1970s, initially to enhance economic and financial policy coordination in reaction to a major financial crisis. After the break-up of the Soviet Union, the G8 was formed by the addition of the Russian Federation. The G8 increasingly became preoccupied with global economic and political issues—in effect assuming the role of a global steering group. But widespread criticism began to mount about its role. The G8 summits were seen as ritualistic in process, ineffective in impact and increasingly unrepresentative in the face of global population and economic shifts, and hence lacking in legitimacy as a global steering group. The onset of the global financial crisis in mid-2008 pushed President George W. Bush into convening the G-20 Summit on November 15, 2008.

The ministerial-level G-20 was first created in the aftermath of the 1997-98 East Asia financial crisis. By convening representatives from 10 industrialized economies and 10 emerging market economies, the G-20 presented a much more geographically and culturally diverse group than the G8. With about 90 percent of the world’s economy and two thirds of the world’s population, the G-20 is also much more representative than the G8. Emerging market economies have been fully engaged in managing the proceedings of the meetings of G-20 finance ministers and central bank governors. It is therefore not surprising that there had been persistent calls by some experts and politicians for using the G-20 as a platform to replace the G8. While moving from G8 to G-20 summit might not create an optimal global steering group, it is a pragmatic and effective step, especially in response to crisis.

Options. Will the G-20 be a short-lived experiment or will it prove an effective tool of global governance? Various options are under debate among experts and practitioners. One possibility is to return to the G8 summits like the one Italy hosted in 2009 and Canada plans to host in 2010. There is concern that the G-20 format is too unwieldy for effective exchanges among the key players. Hence, there will be continuing debates about reducing the size of the summit to somewhere between thirteen and sixteen members, as reflected in the recent proposal by the French President, Nicolas Sarkozy, to create a G14. However, there are pressures to expand the number of participants to include more countries and to expand regional representation. Then there are proposals to develop a constituency-based approach to membership, with universal participation as in the case of the international financial institutions. Further, German Chancellor Angela Merkel and a United Nations Commission chaired by Nobel laureate Joseph Stiglitz propose to establish an Economic Security Council at the UN.

None of these options will likely materialize in the foreseeable future. Instead there are two probable outcomes: The first is the continuation of the G-20 summit with a gradually expanding mandate beyond the current crisis. For this to be successful, it is critical that the G-20 format proves its effectiveness in the coming months and years. This outcome has three requirements: that the number of participants does not expand; that participants focus on a limited number of action items; and that a small but effective secretariat is established to support and monitor the G-20 summit with logistics and technical expertise.

The most likely alternative to the G-20 summit is what is frequently referred to as “variable geometry.” Under this scenario, selected world leaders would convene on specific topics in shifting constellations, with participation of the most important actors decided separately for each topic. For example, the G-20 might continue to meet on global financial and economic matters for some time to come, while different groups would convene for action on climate change, nuclear proliferation or other topics. Support for this plan appears to be emerging from the Obama administration. It co-convened the summit on climate change at the tail-end of the 2009 G8 Summit, hosts the September 2009 G-20 economic summit in Pittsburgh and has called for a summit on nuclear non-proliferation in the spring of 2010. The challenge for summits of “variable geometry” is the ever-shifting number and composition of participants, the difficulty of systematic organization and follow-up and continuing debates about who would convene the summits, when, and with what participation.

Obstacles. As we look ahead, we see a number of challenges for the evolution of global summits beyond the G8, whether toward an effective G-20 or some alternative, especially summits of variable geometry. These challenges emanate from the diverging interests of four sets of players: the United States, Europe, the new emerging powers and the rest of the world.

For the foreseeable future, active U.S. leadership is needed to overcome inertia and collective action problems in addressing global challenges and breaking the stalemate in global governance reform. The Obama administration appears to strongly support a paradigm shift toward a new global order, but so far has not announced its position on summit modalities.

Europe is a key player and has proven a major obstacle to global governance reform as it continues to claim far too many chairs at the G-20 (and in other global forums and institutions) for its economic and demographic weight. In effect, Europeans can either retain their over-representation, which gives them a fragmented voice and weakens their influence while also weakening the global institutions; or they can bundle their votes, chairs and voice for greater impact and to ensure more effective international organizations. Unfortunately, the current stalemate on internal EU governance reform blocks any new European approach to global governance reform.

The new emerging powers, especially China, India and Brazil, will face the challenge of moving beyond their traditional role of the “excluded” and “representatives of the South.” They will need to accept co-responsibility for solving global problems and creating effective global governance institutions. They will have to look beyond issue-specific South-South coalitions to North-South coalitions where it is in their and the global interest (e.g., the push for international financial institution reform, for EU for consolidation, for the completion of the Doha Round, etc.). There are hopeful signs that this is beginning to happen. South Korea’s leadership of next year’s G-20 represents a critical test of whether the new powers are ready to participate and conduct a G-20 forum at the leaders’ level, not only ministerial.

Finally, there is the challenge of how to include the “excluded.” The G-20 is much more inclusive than the G8, but it still leaves out a majority of countries with a third of the world’s population. Options for associating the rest of the world with the summit include ad hoc outreach (as the G8 has done), expanding regional representation (as already practiced with the EU), introducing a constituency approach (as for the IFIs) and seeking a closer alignment with the UN (perhaps through an Economic Security Council). With the exception of the first two—which risk further expanding the number of participants at G-20 summits—none of the other options are likely to materialize soon. However, G-20 leaders will have to be sensitive to the needs of the “excluded” and ensure that the interests of the poorest countries are not neglected.

Conclusion

Great changes in the economic and political balance among countries, global threats and an antiquated global governance system confront the world community today. With the economic crisis as an immediate driver and a new U.S. president, the G-20 summit format has the potential to make a real shift in the global economic order in which a new set of values underpin the way countries and people cooperate across borders. To the extent that President Obama has articulated his vision of the global order and America’s role in it, we believe he is headed in the direction that stresses common interests in a global society, the need for multilateral action and understanding for alternative approaches to economic and political development. This is very promising. The effectiveness of the G-20 in addressing the global economic crisis could lay the foundation for a new global order and provide the impetus for the many other necessary global governance reforms.

However, Europe, China and India are also critical for progress. Moreover, if President Obama is believed to fail the test of competence at home or a major shock hits the United States, a reversal is possible in the U.S. In any case, significant changes in global governance will take time to transpire. We may well see a long period of transition with only gradual improvement in current institutions. In the meantime, pressures for increased regionalism, bilateral deals among the big players, geopolitical competition among power blocs and growing instability and threats from the “excluded” will undermine international cooperation and the whole idea of a global order.

The G-20 summit forum represents a great opportunity for world leaders to begin to put into action the principles of a new global order. It will allow them to address the immediate global financial and economic crisis in a collaborative spirit. And in due course the G-20 summit can also serve as a platform for addressing other pressing global issues, including trade, climate change, energy and food security, and reform of global institutions. To achieve such an outcome, President Obama and other world leaders need to demonstrate a clear vision and strong leadership at the G-20 Summit in Pittsburgh and beyond.

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Editor's note: This article is part of a series marking International Women's Day, on March 8, 2016. Read the latest from Global scholars on bridging the gender inequality gap, women’s well-being, and gender-sensitive policies in sub-Saharan Africa. 

This Tuesday, March 8, marks the first International Women’s Day since world leaders agreed last September to launch the Sustainable Development Goals (SDGs) for 2030. A more rounded conception of gender equality marks one of the SDGs’ most important improvements compared to their predecessor Millennium Development Goals (MDGs). Two SDG targets help to illustrate the broadening geopolitical recognition of the challenges. They also help to underscore how much progress is still required.

The inclusion of SDG target 5.3 adds one of the most important new priorities to the global policy agenda: to “eliminate all harmful practices, such as child, early and forced marriage, and female genital mutilation.” Until only a few years ago, the child marriage portion of this target had received only scant international attention. The driving force advancing the issue has been Girls Not Brides, a fast-gelling coalition that now includes more than 550 civil society organizations from over 70 countries. The initiative was first spearheaded by Mabel van Oranje, the dynamic international policy entrepreneur.

At a practical level, ending child marriage faces at least two major challenges. First, it is largescale. Every year, an estimated 15 million girls around the world are married before the age of 18. Second, it is highly complex. There are no simple solutions to addressing cultural practices with deep roots. Impressively, Girls Not Brides has already published a thoughtful theory of change to inform policy conversations, accompanied by a menu of recommended indicators for measuring progress. Regardless of whether this specific theory turns out to be correct, the coalition deserves significant credit for advancing public discussions toward practical action and outcomes. One can only hope that every constituency that lobbied for an SDG target presents similarly considered proposals soon. The advocates for ending child marriage have already registered some early gains. In 2015, four countries raised the age of marriage to 18: Chad, Guatemala, Ireland, and Malawi.

The SDGs are also carrying forward the previous MDG priority of maternal health. Target 3.1 aims as follows: “By 2030, reduce the global maternal mortality ratio to less than 70 per 100,000 live births.” Formally this falls under Goal 3 for health and wellbeing, but it certainly represents a gender equality objective too. Part of that is by definition; mothers are female. Part of it is driven by the need to overcome gender bias; male decision-makers at all levels might overlook key health issues with which they have no direct personal experience.

As of the early 2000s, maternal mortality was too often considered a topic only for specialist discussions. One of the MDG movement’s most important contributions was to elevate the issue to the center stage of global policy. For example, former Canadian Prime Minister Stephen Harper made it a centerpiece among his own foreign policy priorities, including at the G-8 Muskoka summit he hosted in 2010.

Figure 1 shows an initial estimate of the gains across developing countries since 2000, as measured by maternal mortality ratios (MMR). The solid line indicates the actual rate of progress. The dotted lines indicate how things would have looked if previous pre-MDG trends had continued as of 1990-2000 and 1996-2001, respectively. (This is the same basic counterfactual methodology I have previously used for child mortality trends here and here, noting that maternal mortality data remain considerably less precise and subject to ongoing updates in estimation.)

The graph shows that developing countries’ average MMR dropped from approximately 424 deaths per 100,000 live births in 1990, down to 364 in 2000, and further to 233 in 2015. That works out to a 36 percent decline over the past 15 years alone, driven by acceleration in progress during the mid-2000s. Importantly, the value in 2015 was also at least 12 percent lower than it would have been under pre-MDG rates of progress—287 under 1990-2000 trends and 266 under 1996-2001 trends.

Figure 1: Developing country progress on maternal mortality, 1990-2015

Whereas the MDGs focused on developing countries, the SDGs apply universally to all countries. In that spirit, and slightly different from the previous graph, Figure 2 shows an estimate of the current global MMR trajectory for 2030, extrapolating the rates of progress from 2005 to 2015. Drawing from available data for 174 countries with a current population of 200,000 or more, the world’s MMR is on course to drop from approximately 216 in 2015 to 163 in 2030. This would mark a 25 percent improvement, but falls far short of the global MMR target of 70. (These calculations follow a similar methodology to my assessment last year of under-5 mortality trajectories.)

Figure 2: Global maternal mortality - current trajectory to 2030

Although the SDG for maternal mortality is set at a global level (unlike the country-level target 3.2 for child mortality), it is worth assessing how many individual countries are trailing the MMR benchmark of 70. The geographic nature of the global challenge is underscored in Figure 3. It lists the number of countries with MMR above 70 across the respective years 2000, 2015, and—on current trajectory—2030. As of 2000, 90 countries still had MMRs greater than 70. By 2015, this was down to 77 countries. By 2030, on current rates of progress, the relevant figure drops only slightly to 68 countries.

Most notably, the figure for sub-Saharan Africa remains unchanged between 2015 and 2030, at 44 countries, even though most of the region is already experiencing major mortality declines. Rwanda, for example, saw its MMR plummet from 1,020 in 2000 to 290 by 2015. It is on track to reach 106 by 2030. Meanwhile, Sierra Leone saw a decline from 2,650 in 2000 to 1,360 in 2015, on a path toward 768 in 2030. The challenge is not a lack of progress. Instead, it is simply that these countries have huge ground to cover to reach the ambitious goal. On current trajectory, 11 African countries are on course to have MMRs of 500 or greater in 2030.

Figure 3: Scoping progress on SDG 3.1

Number of countries with maternal mortality ratios > 70

Women and girls deserve more

Although these two targets for child marriage and maternal mortality embody only a small portion of the SDGs’ broader gender equality imperatives, they reflect crucial aspects of the overall challenge. On the positive side, they provide inspiration for the ways in which long-overlooked issues can rapidly gain political and policy traction. But they also underscore the scale of the task ahead. The global challenges of gender inequality—ranging from discrimination to violence against women to inequalities of opportunity—all require dramatic accelerations in progress. On this International Women’s Day, we all need to recommit to break from business as usual. Our mothers, sisters, daughters, and partners around the world all deserve nothing less. 

Note: The maternal mortality figures presented above have been updated subsequent to the original post in order to correct for a coding error discovered in the original country-weighting calculations for global trajectories.

Extreme poverty around the world has decreased from around 2 billion people in 1990 living under $2 per day to 700 million today. Further, nine out of 10 children are now enrolled in primary schools, an increase over the last 15 years. Progress in both areas since 2000 has been part of the United Nations Millennium Development Goals, which set targets for reducing extreme poverty in eight areas, and which were the guiding principles for global development from 2000 to 2015. Today, the global community, through the UN, has adopted 17 Sustainable Development Goals to continue these poverty reduction efforts. 

In this new episode of Intersections podcast, host Adrianna Pita engages Brookings scholars Laurence Chandy and Rebecca Winthrop in a discussion of how digital technologies can be harnessed to bring poverty reduction and education to the most marginalized populations.

Listen:

Chandy, a fellow in the Global Economy and Development program at Brookings, says that the trends in getting people digitally connected "are progressing at such speed that they’re starting to reach some of the poorest people in the world. Digital technology is changing what it means to be poor because it’s bringing poor people out of the margins.”

Winthrop, a senior fellow and director of the Center for Universal Education at Brookings, says that "I think [education] access is crucial. And I do think that’s almost the first wave because without it we could work on all the ed tech—fabulous apps, great language translated content—but if you do not have the access it’s not going to reach the most marginalized."

Listen to this episode above; subscribe on iTunes; and find more episodes on our website.

Chandy was a guest on the Brookings Cafeteria Podcast in 2013; Winthrop has been a guest on the Cafeteria a few times to discuss global education topics, including: access plus education; investing in girls' education; and getting millions learning in the developing world.

Despite the undeniable benefits of education to society, the educational needs, particularly in the world’s poorest countries, remain strikingly great. There are more than 67 million children not enrolled in primary school around the world, millions of children who are enrolled in school but not really learning, and too few young people are advancing to secondary school (van der Gaag and Adams 2010). Consider, for instance, the number of children unable to read a single word of connected text at the end of grade two: more than 90 percent in Mali, more than 50 percent in Uganda, and nearly 33 percent in Honduras (USAID n.d.).

With more young people of age 12 to 24 years today than ever before who are passing through the global education system and looking for opportunities for economic and civic participation, the education community is at a crossroads. Of the 1.5 billion young people in this age group, 1.3 billion live in developing countries (World Bank 2007). The global community set the goal of achieving universal primary education by 2015 and has failed to mobilize the resources necessary, as UNESCO estimates that $16.2 billion in external resources will be need to reach this goal.

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Results from this report were presented at an April 6 Center on Universal Education event at the Brookings Institution.

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INTRODUCTION

With fewer than three years until the planned end-date of the United Nations Millennium Development Goals (MDGs), attention is rapidly turning to what will follow. The elaboration of the next global development agenda is a complex, multi-pronged process that is academic, political and practical, involving experts from a myriad of social and economic sectors and representing a cross-section of constituencies. While the formal U.N. process is still in the early stages, the ongoing discourse (predominantly occurring in the global north, but not exclusively) has introduced several potential frameworks for this agenda. This paper describes the leading frameworks proposed for the post-2015 global development agenda and discusses how education and learning fit within each of those frameworks. While many within the education community are working to develop a cohesive movement to advance an “access plus learning” agenda, it remains equally important to engage proactively with the broader development community to ensure that education fits within the agreed upon overarching organizing framework.

The frameworks described below represent a snapshot of current thinking in 2012. On the road to 2015, the education community will need to refine and sharpen its thinking with respect to how learning is incorporated into the prevailing framework. The seven frameworks that will be addressed in this paper are:

1. Ending Absolute Poverty
2. Equity and Inclusion
3. Economic Growth and Jobs
4. Getting to Zero
5. Global Minimum Entitlements
6. Sustainable Development
7. Well-Being and Quality of Life

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American voters are angry. But while the ill effects of globalization top their list of grievances, nobody is well served when complex economic issues are reduced to bumper-sticker slogans – as they have been thus far in the presidential campaign.

It is unfair to dismiss concerns about globalization as unfounded. America deserves to have an honest debate about its effects. In order to yield constructive solutions, however, all sides will need to concede some inconvenient truths – and to recognize that globalization is not the same phenomenon it was 20 years ago.

Protectionists fail to see how the United States’ eroding industrial base is compatible with the principle that globalization boosts growth. But the evidence supporting that principle is too substantial to ignore.

Recent research by the McKinsey Global Institute (MGI) echoes the findings of other academics: global flows of goods, foreign direct investment, and data have increased global GDP by roughly 10% compared to what it would have been had those flows never occurred. The extra value provided by globalization amounted to $7.8 trillion in 2014 alone.

And yet, the shuttered factories dotting America’s Midwestern “Rust Belt” are real. Even as globalization generates aggregate growth, it produces winners and losers. Exposing local industries to international competition spurs efficiency and innovation, but the resulting creative destruction exacts a substantial toll on families and communities.

Economists and policymakers alike are guilty of glossing over these distributional consequences. Countries that engage in free trade will find new channels for growth in the long run, the thinking goes, and workers who lose their jobs in one industry will find employment in another.

In the real world, however, this process is messy and protracted. Workers in a shrinking industry may need entirely new skills to find jobs in other sectors, and they may have to pack up their families and pull up deep roots to pursue these opportunities. It has taken a popular backlash against free trade for policymakers and the media to acknowledge the extent of this disruption.

That backlash should not have come as a surprise. Traditional labor-market policies and training systems have not been equal to the task of dealing with the large-scale changes caused by the twin forces of globalization and automation. The US needs concrete proposals for supporting workers caught up in structural transitions – and a willingness to consider fresh approaches, such as wage insurance.

Contrary to campaign rhetoric, simple protectionism would harm consumers. A recent study by the US President’s Council of Economic Advisers found that middle-class Americans gain more than a quarter of their purchasing power from trade. In any event, imposing tariffs on foreign goods will not bring back lost manufacturing jobs.

It is time to change the parameters of the debate and recognize that globalization has become an entirely different animal: The global goods trade has flattened for a variety of reasons, including plummeting commodity prices, sluggishness in many major economies, and a trend toward producing goods closer to the point of consumption. Cross-border flows of data, by contrast, have grown by a factor of 45 during the past decade, and now generate a greater economic impact than flows of traditional manufactured goods.

Digitization is changing everything: the nature of the goods changing hands, the universe of potential suppliers and customers, the method of delivery, and the capital and scale required to operate globally. It also means that globalization is no longer exclusively the domain of Fortune 500 firms.

Companies interacting with their foreign operations, suppliers, and customers account for a large and growing share of global Internet traffic. Already half of the world’s traded services are digitized, and 12% of the global goods trade is conducted via international e-commerce. E-commerce marketplaces such as Alibaba, Amazon, and eBay are turning millions of small enterprises into exporters. This remains an enormous untapped opportunity for the US, where fewer than 1% of companies export– a far lower share than in any other advanced economy.

Despite all the anti-trade rhetoric, it is crucial that Americans bear in mind that most of the world’s customers are overseas. Fast-growing emerging economies will be the biggest sources of consumption growth in the years ahead.

This would be the worst possible moment to erect barriers. The new digital landscape is still taking shape, and countries have an opportunity to redefine their comparative advantages. The US may have lost out as the world chased low labor costs; but it operates from a position of strength in a world defined by digital globalization.

There is real value in the seamless movement of innovation, information, goods, services, and – yes – people. As the US struggles to jump-start its economy, it cannot afford to seal itself off from an important source of growth.

US policymakers must take a nuanced, clear-eyed view of globalization, one that addresses its downsides more effectively, not only when it comes to lost jobs at home, but also when it comes to its trading partners’ labor and environmental standards. Above all, the US needs to stop retrying the past – and start focusing on how it can compete in the next era of globalization.

Editor's note: this piece first appeared on Project-Syndicate.org.