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

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

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

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

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Editor’s Note: The National Perspectives on Global Leadership (NPGL) project reports on public perceptions of national leaders’ performance at important international events. This fifth installation of the NPGL Soundings provides insight on the issues facing leaders at the Seoul G-20 Summit and the coverage they received in their respective national media. Read the other commentary »

The week before the Seoul G-20 Summit was one in which the main newspapers read in Washington (The New York Times, The Washington Post and Financial Times) all focused their primary attention on the “currency war,” global imbalances, the debate on quantitative easing (QE 2), the struggle over whether there would be numerate current account targets or only words, and the US-China relationship. As early as Wednesday, November 10, The Washington Post front-page headline read: “Fed move at home trails U.S. to Seoul; Backlash from Europe; Obstacles emerge for key goals at G-20 economic summit.” By Thursday, November 11, things had gotten worse. “Deep fractures hit hopes of breakthrough; governments are unlikely to agree on a strategy to tackle economic imbalances” read the Financial Times headline on Alan Beattie’s article from Seoul. Friday, November 12, The New York Times front-page headline declared: “Obama’s Economic View is Rejected on World Stage; China, Britain and Germany Challenge U.S.; Trade Talks with Seoul Fail, Too.” By Saturday, the Financial Times concluded in its lead editorial: “G-20 show how not to run the world.”

From these reports, headlines and editorials it is clear that conflicts over policy once again dwarfed the progress on other issues and the geopolitical jockeying over the currency and imbalances issues took centre stage, weakening G-20 summits rather than strengthening them. Obama was painted as losing ground, supposedly reflecting lessening U.S. influence and failing to deliver concrete results. China, Germany and Brazil were seen to beat back the U.S. initiative to quantify targets on external imbalances. Given the effort that Korean leaders had put into achieving positive results and “consolidating” G-20 summits, it was, from this optical vantage point, disappointing, to say the least.

How was the Rebalancing Issue Dealt With?

At lower levels of visibility and intensity, however, things looked a bit different and more positive. Howard Schneider and Scott Wilson in Saturday’s edition of The Washington Post (November 13) gave a more balanced view of the outcomes. Their headline read: “G-20 nations agree to agree; Pledge to heed common rules; but economic standards have yet to be set.” They discerned progress toward new terrain that went beyond the agreement among G-20 finance ministers in October at Gyeongju, which other writers missed.

“By agreeing to set economic standards, the G-20 leaders moved into uncharted waters,” they wrote. “The deal rests on the premise that countries will take steps, possibly against their own short-term interests, if their economic policies are at odds with the wider well-being of the world economy. And leaders are committing to take such steps even before there’s an agreement on what criteria would be used to evaluate their policies.”

They continued: “In most general of terms, the statement adopted by the G-20 countries says that if the eventual guidelines identify a problem, this would ‘warrant an assessment of their nature and the root causes’ and should push countries to ‘preventive and corrective actions.’”

The Schneider-Wilson rendering went beyond the words of the communiqué to an understanding of what was going on in official channels over time to push this agenda forward in real policy, rather than declarative terms. As the Saturday, November 13, Financial Times’ editorial put it, “below the headline issues, however, the G-20 grouping is not completely impotent,” listing a number of other issues on which progress was made including International Monetary Fund (IMF) reform which the Financial Times thought might actually feed back into a stronger capacity to deal with “managing the global macroeconomy.”

The Role of President Barack Obama

Without doubt, the easy, simple, big-picture message coming out of Seoul was that Obama and the United States took a drubbing. And this did not help the G-20 either. The seeming inability of the U.S. to lead the other G-20 leaders toward an agreement in Seoul on global imbalances, the criticism of U.S. monetary easing and then, on top of it all, the inability to consummate a US-Korea trade deal, made it seem as if Obama went down swinging.

But again, below the surface of the simple, one got a different picture. Obama himself did not seem shaken or isolated at the Seoul summit by the swirl of forces around him. At his press conference, he spoke clearly and convincingly of the complexity of the task of policy coordination and the time it would take to work out the policies and the politics of adjustment.

“Naturally there’s an instinct to focus on the disagreements, otherwise these summits might not be very exciting,” he said. “In each of these successive summits we’ve made real progress,” he concluded. Tom Gjeltin, from NPR news, on the Gwen Ifyl Weekly News Roundup commented Saturday evening that the G-20 summits are different and that there is a “new pattern of leadership” emerging that is not quite there yet. Obama seems more aware of that and the time it takes for new leadership and new patterns of mutual adjustment to emerge. He may have taken a short-run hit, but he seems to have the vision it takes to connect this moment to the long-run trajectory.

Reflections on the Role of South Korea

From a U.S. vantage point, Seoul was one more stop in Asia as the president moved from India to Indonesia to Korea to Japan. It stood out, perhaps, in higher profile more as the locus of the most downbeat moments in the Asia tour, because of the combination of the apparent lack of decisive progress at the G-20 along with the needless circumstance of two presidents failing to find a path forward on something they both wanted.

From a Korean vantage point, the summit itself was an event of immense importance for Korea’s emergence on the world stage as an industrial democracy that had engineered a massive social and economic transformation in the last 50 years, culminating in being the first non-G8 country to chair the G-20 summit. No one can fault Korea’s efforts to reach significant results. However, the fact is that the Seoul Summit’s achievements, which even in the rebalancing arena were more significant than they appeared to most (see Schneider and Wilson), but included substantial progress on financial regulatory reform, international institutional reform (specifically on the IMF), on development and on global financial safety nets, were seen to be less than hoped for. This was not the legacy the Koreans were looking for, unfortunately.

Conflicts among the major players on what came to be seen as the major issue all but wiped out the serious workmanlike progress in policy channels. The leaders level interactions at G-20 summits has yet to catch up to the highly significant degree of systemic institutionalization of the policy process of the G-20 among ministers of finance, presidents of central banks, G-20 deputies and Sherpas, where the policy work really goes on. On its watch, Korea moved the agenda in the policy track forward in a myriad of significant ways. It will be left to the French and French President Nicolas Sarkozy to see if they can bring the leaders into the positive-sum game arrangements that are going on in the policy channels and raise the game level of leaders to that of G-20 senior officials.

Since it was created in 1935, Social Security has grown from covering about half of the work force to covering nearly all workers.  The largest remaining exempted group is a subset of state and local government workers (SLGWs).  As of 2008, Social Security did not cover about 27 percent of the 23.8 million SLGWs (Congressional Research Service 2011).  Non-coverage of SLGWs is concentrated in certain states scattered around the country and includes workers in a diverse set of jobs, ranging from administrators to custodial staff.  Some police and fire department employees are not covered.  About 40 percent of public school teachers are not covered by Social Security (Kan and Alderman 2014).    

Under current law, state and local governments that do not offer their own retirement plan must enroll their employees in Social Security.  But if it does offer a retirement plan, the state or local government can choose whether to enroll its workers in Social Security.  

This paper reviews and extends discussion on whether state and local government workers should face mandatory coverage in Social Security.^[1]  Relative to earlier work, we focus on links between this issue and recent developments in state and local pensions.  Although some of the issues apply equally to both existing and newly hired SLGWs, it is most natural to focus on whether newly hired employees should be brought into Social Security.^[2]  

The first thing to note about this topic is that it is purely a transitional issue.  If all SLGWs were already currently enrolled in Social Security, there would not be a serious discussion about whether they should be removed.  For example, there is no discussion of whether the existing three quarters of all SLGWs that are enrolled in Social Security should be removed from coverage.

Bringing state and local government workers into the system would allow Social Security to reach the goal of providing retirement security for all workers.  The effects on Social Security finances are mixed.  Bringing SLGWs into the system would also help shore up Social Security finances over the next few decades and, under common scoring methods, push the date of trust fund insolvency back by one year, but after that, the cost of increased benefit payments would offset those improvements. 

Mandatory coverage would also be fairer.  Other workers pay, via payroll taxes, the “legacy” costs associated with the creation of Social Security as a pay-as-you-go system.   Early generations of Social Security beneficiaries received far more in payouts than they contributed to the system and those net costs are now being paid by current and future generations.  There appears to be no convincing reason why certain state and local workers should be exempt from this societal obligation.  As a result of this fact and the short-term benefit to the program’s finances, most major proposals and commissions to reform Social Security and all commissions to shore up the long-term federal budget have included the idea of mandatory coverage of newly hired SLGWs.

While these issues are long-standing, recent developments concerning state and local pensions have raised the issue of mandatory coverage in a new light. Linking the funding status of state and local pension plans and the potential risk faced by those employees with the mandatory coverage question is a principal goal of this paper.  One factor is that many state and local government pension plans are facing significant underfunding of promised pension benefits.  In a few municipal bankruptcy cases, the reduction of promised benefits for both current employees and those who have already retired has been discussed.  The potential vulnerability of these benefits emphasizes the importance of Social Security coverage, and naturally invites a rethinking of whether newly hired SLGWs should be required to join the program.  On the other hand, the same pension funding problems imply that any policy that adds newly-hired workers to Social Security, and thus requires the state to pay its share of those contributions, would create added overall costs for state and local governments at a time when pension promises are already hard to meet.  The change might also divert a portion of existing employee or employer contributions to Social Security and away from the state pension program. 

We provide two key results linking state government pension funding status and SLGW coverage. First, we show that states with governmental pension plans that have greater levels of underfunding tend also to have a smaller proportion of SLGW workers that are covered by Social Security.  This tends to raise the retirement security risks faced by those workers and provides further fuel for mandatory coverage.  While one can debate whether future public pension commitments or future Social Security promises are more risky, a solution resulting in less of both is the worst possible outcome for the workers in question.  Second, we show that state pension benefit levels for career workers are somewhat compensatory, in that states with lower rates of Social Security coverage for SLGWs tend to have somewhat higher pension benefit levels.  The extent to which promised but underfunded benefits actually compensate for the higher risk to individual workers of non-Social Security coverage is an open question, though.  

Mandatory coverage of newly hired SLGWs could improve the security of their retirement benefits (by diversifying the sources of their retirement income), raise average benefit levels in many cases (even assuming significant changes in state and local government pensions in response to mandatory coverage), and would improve the quality of benefits received, including provisions for full inflation indexation, and dependent, survivor and disability benefits in Social Security that are superior to those in most state pension plans.  The ability to accrue and receive Social Security benefits would be particularly valuable for the many SLGWs who leave public service either without ever having been vested in a government pension or having been vested but not reaching the steep part of the benefit accrual path.  

Just as there is strong support for mandatory coverage in the Social Security community and literature, there is strong opposition to such a change in elements of the state and local government pension world.  The two groups that are most consistently and strongly opposed to mandatory coverage of newly hired SLGWs are the two parties most directly affected – state and local governments that do not already provide such coverage and their uncovered employees.  Opponents cite the higher cost to both employees and the state and local government for providing that coverage and the potential for losing currently promised pension benefits. They note that public pensions – unlike Social Security – can invest in risky assets and thus can provide better benefits at lower cost.  This, of course, is a best-case alternative as losses among those risky assets could also increase pressure on pension finances.

There is nothing inconsistent about the two sides of these arguments; one set tends to focus on benefits, the other on costs.  They can be, and probably are, all true simultaneously.  There is also a constitutional issue that used to hang over the whole debate – whether the federal government has the right to tax the states and local government units in their roles as employers – but that seems resolved at this point.

Section II of this paper discusses the history and current status of Social Security coverage for SLGWs.   Section III discusses mandatory coverage in the context of Social Security funding and the federal budget.  Section IV discusses the issues in the context of state and local budgets, existing pension plans, and the risks and benefits to employees of those governments.  Section V concludes.

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