Even before the COVID-19 pandemic, it was clear that the world is undergoing a transition away from fossil fuels and carbon-intensive sectors, towards renewable energy and clean growth. The collapse of oil demand and prices have simply compounded the challenges that oil and gas producers already faced.

What happens next will have significant implications for Norway, as one of the world’s largest exporters of both energy and capital, and for the UK, as it plans its recovery and looks ahead to its hosting of the next major climate change summit in 2021 - COP26.

While the speed and scale of the transition has always been uncertain and contested, an accelerated transition with deep implications for future oil and gas demand looks plausible.

There has long been a debate over when global demand will peak, but what happens after demand has peaked is perhaps the more critical question. Now there is the additional uncertainty of how this post-peak demand might be affected by an oncoming global recession and potentially by the greening of recovery measures implemented in response to it. Will there be an extended plateau, a gentle decline or a sudden collapse?

The post-peak trend will impact oil producers and exporters to varying degrees, in terms of their vulnerability to reduced volumes and lower prices, and their ability to compete in a shrinking market. There is also growing scepticism over whether natural gas can act as a bridge between coal-fired power and renewables, as increasingly, renewables directly replace coal.  There is also significant uncertainty over extent to which hydrogen, either produced from fossil fuels or renewable energy, will play a significant role in a decarbonizing energy sector.

Even before the pandemic, there was growing public and political pressure in most EU member states for more ambitious action on climate change. More challenging climate targets now look certain as a growing number of governments and companies commit to becoming carbon-neutral by ever-earlier dates.

While market developments, such as the rate of change and the costs of technologies such as renewable energy and electric vehicles will heavily influence their deployment rates, policy interventions and large-scale investment in core infrastructure are still crucial to their scaling up. We are now seeing the EU refocus its Green Deal in support of post-COVID recovery, and scale its support for transition in coal-dependent and carbon-intensive regions with its €100bn Just Transition Mechanism.  

These developments have significant implications for fossil fuel producers and energy consumers both inside and outside the EU. It will particularly affect Norway, not only as a significant supplier of energy to the EU, but as a member of the European Economic Area, with likely pressure to adopt similarly binding domestic carbon reduction legislation. Similarly, as the UK forges new post-Brexit trading and regulatory relationships, it will need to align with European policies for efficiency.

As the host of the critical COP26 UN Climate Change Summit in Glasgow next year, the UK will also need to at least match the EU in terms of its ambition on national emissions reductions, and in placing decarbonization and sustainability at the heart of COVID-19 recovery measures. However, unfortunately, the early indications are that 'Project Speed' will focus on traditional infrastructure projects are less than promising.    

The UK and Norway face similar challenges, as oil and gas producers that recognize the importance of climate change, and will rightly face scrutiny where they reinvest in their oil and gas sectors. They are both outside, yet highly dependent on developments within the EU. However, they are also both, somewhat surprisingly, world leaders in different aspects of decarbonization, such as off-shore wind or electric vehicle deployment, in part due their offshore capabilities and advanced manufacturing capabilities. This presents an opportunity for both countries and their industries to place an accelerated energy transition at the heart of their economic recovery and their relationship with the EU.

There will of course be different opinions on how to do this. A new Chatham House paper – Expert Perspectives on Norway’s Energy Future – explores these issues in the Norwegian context, and draws upon the views of 15 international experts on energy transition and climate change, each interviewed in depth. While unsurprisingly there is little consensus, these views provide valuable background from which to consider the future of future of energy for Norway, and for its partners including the UK and the EU.

Many people are aware that the scourge of malnutrition affects a vast number of individuals and communities around the world. However, most tend to view it as a problem to be addressed by governments, charities or donors, rather than the corporate sector.

Certainly, when considered at a societal scale, malnutrition makes the complexities of delivering inclusive growth all the harder. It ratchets up the public health burden while restricting the potential for at-risk populations to take part in productive employment.  Economies are hindered, lives are blighted and the potential for people to reach their full potential can be severely limited.

A number of upcoming summits represent a window of opportunity to address nutrition in the context of resilience, particularly in the wake of COVID-19 and the much-referenced ambition for governments to ‘build back better’. The opportunity is there to foster a true partnership between governments, third sector organizations and businesses of all sizes, sectors and geographies to work for the betterment of society and deliver benefits to all participants in such a partnership. 

So what is the role of business in relation to nutrition - where does it sit on their list of priorities and why should it matter to them? A new Chatham House report represents an important contribution to the discussion about the role of business in addressing malnutrition. Through thorough research and direct engagement with businesses, it seeks to find out if malnutrition is on the corporate radar and the extent to which it is considered a material issue.

Surprisingly, whilst many large corporates recognize malnutrition as a matter for concern, this is typically defined only in the context of CSR programmes or related ambitions. These types of commitments have their limitations though; most notably the fact that the communities more severely affected by malnutrition typically sit outside of the sphere of influence of the multi-national companies with the greatest ability to mobilize resources and make an impact. Where populations are marginalized, operating within the informal economy and living in settings that are too fragile for large-scale business investment, corporate CSR programmes are unlikely to have a meaningful impact.

The report also asked businesses whether they considered malnutrition to have a material impact on their ability to create value, protect value and manage risk. In the majority of instances the answer was no. This may be surprising, particularly given the evidence provided by new modelling – done for this report using a purpose-built model by Vivid Economics – that illustrates the costs posed to business by malnutrition within a population. On an immediate and direct level, the impacts can be considerable due to lost or reduced productivity from the employee base. However, if even that immediate impact is addressed, the externalities associated with malnutrition can come back and have a negative effect on businesses and investors alike.

When reflecting on externalities and the landscape of risk within which business operates, it is worth considering climate change by way of comparison. Climate change is well embedded in the risk profiling of most progressive and well-managed corporates – although in some instances meaningful action may be well overdue. That said, it is recognized that the direct and indirect impacts have the potential to conspire and permanently reduce shareholder, stakeholder and societal value. 

Similarly, if left unchecked, the externalities associated with malnutrition will undoubtedly contribute to an increased level of risk in terms of both operating and investment environments. This is both an issue of social equity and enlightened self-interest given that good nutrition is key to the success of many of the Sustainable Development Goals (SDGs), and is essential to driving sustainable economic growth. One of the lessons of the COVID-19 pandemic is the manner in which widespread malnutrition can significantly reduce the resilience of populations to external risks, including the outbreaks of infectious disease. We need only to look at the impact of climate stress and related events to understand how closely linked malnutrition is – or may become – to the incidence of social unrest and armed conflict in low-income countries.

Progressive companies and investors have already identified the ability to drive inclusive and sustainable growth as a compelling imperative for investment. In this context, the potential for improved nutrition – both in the workforce and amongst the communities upon which the firms depend – should be a true priority. As fund managers seek increasingly meaningful insight into the way that companies within their portfolio(s) create value, protect value and manage risk, the scope of environmental and social governance is expanding. Many recognize the link between delivering on the SDG agenda and protecting or enhancing shareholder value into the longer term. This is a powerful lever for change, particularly when considering that good nutrition is integral to the success of the ambitions laid out by the various SDGs. Successfully delivering against nutrition-focused targets could unlock growth in developing markets and create an enabling environment for achieving the broader SDG agenda. This may in turn help companies to deliver enduring shareholder value in a way that does not undermine their corporate sustainability commitments.

So, given the insights provided by this report, what can businesses do that have the potential to make a practical and effective impact? There are three main action points around which the private sector can galvanize its efforts and work in partnership to deliver a meaningful impact. 

The first action point is a basic requirement to be proactive and make supportive interventions with existing and future workforces, ensuring that staff are well fed and have appropriate facilities for breastfeeding and childcare. Beyond that foundational commitment, the second action point is to work to build impactful and well-governed partnerships to work within local communities and deliver outcomes at an appropriate scale. The third and final action point sets out the importance of reporting. Businesses should thoroughly assess the impacts of their operations, investments and influence. They should be transparent about those impacts and report both on the current situation and the commitments made to deliver on measurable targets.

Malnutrition is a scourge; it negatively impacts individuals, families, societies and economies. Now is the time to align corporate, government and third sector efforts to consign it to the past. We just need leaders to be bold enough to seize the opportunity.

When the resolution was passed by World Health Organization (WHO) member states at the World Health Assembly (WHA) in May requesting an evaluation ‘at the earliest appropriate moment’ of lessons learned from the WHO-coordinated international health response to COVID-19, it was generally thought the appropriate moment would be when the pandemic was on the wane.

Yet the Independent Panel for Pandemic Preparedness and Response has actually been established at a time when - as noted by WHO director-general Dr Tedros Adhanom Ghebreyesus in his announcement of the panel - the pandemic is still accelerating.

In most of the world the virus is not under control, and cases have actually doubled in the last six weeks. So why now?

Emphasis on global solidarity

Throughout the pandemic so far, Dr Tedros has emphasised two main points – the need for urgent action by countries, and the imperative need for global solidarity. In announcing the panel, he said this is the ‘defining crisis of our age’ and that ‘we cannot defeat this pandemic as a divided world … the COVID-19 pandemic is a test of global solidarity and global leadership’.

He may well see establishing the panel now - when the pandemic still has a long way to run - as an opportunity to reinforce messages which have hitherto seemed to fall on deaf ears, notably saying ‘we are in the midst of the battle of our lives, and we have to do better’. And he has also said that we should learn lessons now that will be useful in the continuing fight against the pandemic.

Establishing both the membership of the panel and its terms of reference has been left largely in the hands of the co-chairs – distinguished ex-politicians Helen Clark of New Zealand and Ellen Johnson Sirleaf of Liberia. But they will have to construct the panel in close consultation with member states on the basis of their proposals for membership – a process that will likely be fraught by the divisive politics which have already so upset Dr Tedros.

In addition, embedded in the mandate from the WHA resolution is the phrase ‘WHO-coordinated international health response’ – negotiated language which is intentionally ambiguous and reveals an unresolved tension.

Does it mean the panel should principally focus on WHO’s performance, which is what several countries – including the US – want to see? Or should it give at least equal weight to the way countries have responded individually and collectively, as Dr Tedros and the WHO may want to see?

These different interpretations mean both the construction of the panel and its terms of reference could be highly contentious. Most countries, including China and the US but also others, will not want their responses to be subjected to independent investigation. Nor will they want to include panel members likely to be critical of their responses. This suggests the possibility that there will be political pressure to focus the enquiry principally on the performance of WHO rather than that of countries – an outcome Dr Tedros would not welcome.

It remains to be seen how the co-chairs will manage these highly political issues, and avoid the panel becoming an extension of ‘pandemic politics’ by other means. Can it come to definitive conclusions in the midst of a pandemic and, if so, how likely are they to be heeded?

It is also highly likely that several other reviews will be launched, wholly independently of oversight by WHO and its member states, as happened following the 2014 Ebola outbreak. This provides opportunities for a variety of perspectives on both the performance of WHO, and of individual countries.

Already, The Lancet has announced its own Commission on COVID-19 with a broad mandate covering both the health and economic responses to the pandemic. Both this and the Independent Panel for Pandemic Preparedness and Response are likely to be only the first of many COVID-19 reviews.

The World Bank estimates that the magnitude of internal migration is about two‐and‐a‐half times that of international migration. Within India, an estimated 40 million internal migrant workers, largely in the informal economy, were severely impacted by the government’s COVID-19 lockdown.

With transportation systems initially shut down, many had no recourse to travel options back to homes and villages, resulting in harrowing journeys home. Those who were able to make it home found, in some instances, villages refusing entry because of fears of transmission.

The shocking images of migrants forced to walk in desperation showed the enormity of the crisis as well as some of the challenges posed by an extended lockdown in India where so many people live hand to mouth and cannot afford not to work.

Migrant workers and the informal economy

The complete failure of the government to anticipate the needs of this group, and the subsequent distress caused, has made visible a large workforce who experience precarity of work and often live hand to mouth.

One key challenge is the lack of robust data on the scale of internal migration. While estimates abound, there is no proper data collection system in place to accurately record temporary, seasonal and circular migration patterns. However, it is estimated that more than 90% of working people in India are engaged in the informal economy, with states such as Uttar Pradesh and Bihar accounting for more than 80% of workers in this sector.

A recent government labour force survey estimated that more than 71% of people with a regular salary working in non-agricultural industries had no written job contract. Nearly half of workers are not eligible for social security benefits.

Daily-wage workers are particularly vulnerable, with limited or no access to social security and most living in poverty. Living hand to mouth, their loss of livelihoods has led to a lack of money to pay rents or pay for food. Women are impacted whether because of their gender, responsibilities as caregivers, or as members of disadvantaged castes and communities.

COVID-19 has massively impacted this group of workers. Stranded Workers Action Network found that 50% of workers had rations left for less than one day; 74% had less than half their daily wages remaining to survive for the rest of the lockdown period; and 89% had not been paid by their employers at all during the lockdown.

According to Supreme Court proceedings, relief camps are housing some 660,000 workers; some 2.2 million people also rely on emergency food supplies. Job losses, and home and food insecurity have left this group highly vulnerable.

In March 2020, in response to COVID-19, the Indian government instituted the Pradhan Mantri Garib Kalyan Package (PMGKB), a $22.6 billion relief package. The World Bank announced $1 billion funding to accelerate social protection support, in part through the PMGKB.

This support would work alongside pre-existing initiatives such as the Public Distribution System (PDS), which covers 800 million people, and Direct Benefit Transfers (DBT). This cash injection could help address one of the key challenges facing India’s piecemeal and uneven social protection programmes – inadequate funding. India’s spending on public social protection excluding health is just 1.3% of the GDP.

However, there are still other challenges to overcome. One is how to ensure coordination and coverage within, and across, differing states. The second is how to transition multiple schemes into one integrated system that can be accessed anywhere within the country, particularly important when many workers are on the move. There is an urgent need for a comprehensive system, which is adaptive and flexible to needs and provides adequate social and income support.

Another coverage issue relates to the use of direct cash transfers (DCTs) to support people impacted by the loss of livelihoods, where funds are deposited within bank accounts. Such measures fail to consider the significant numbers of people who do not have access to banks and will not be able to access this support.

Wider impact on livelihoods and remittances

​There is a risk, with extended lockdown and risks of further waves of infection, that labour shortages could negatively impact the economy. There is a wider need to support re-entry back into the workforce and support livelihoods. National Survey Sample data shows that between 2007 and 2008, internal remittances amounted to US$10 billion. These domestic transfers financed over 30% of all household consumption in remittance-receiving households.

But future migration for work is likely to be severely impacted. As restrictions begin to ease, employers and businesses cannot necessarily rely on cheap available labour. Having faced destitution and hardship, many may wish to stay closer to families and local support networks.

As Irudaya Rajan notes in The New Humanitarian, it is likely ‘there will be a reduction in long-distance migration in India after this’, as many migrants will be wary of being stranded again. This would be hugely detrimental to stimulating the economy as reverse migration could push down wages and subsequently demand.

Another issue may be returning migrant workers, who have been working overseas, over half of whom work in the Gulf. It is unclear if, or when, migrants will be able to return to work, with the World Bank estimating that remittances from this group could fall by about 23%.

However, what is striking has been India’s support for this group - the Vande Bharat Mission has deployed flights and naval ships to help return migrant workers, especially vulnerable groups - in marked contrast to the lack of preparation and care for internal migrants.

One factor for this may be the volume of remittances these migrant workers bring to the Indian economy, but it overlooks the contribution of internal remittances, on which there is far less robust data.

But the current challenges can also be an opportunity. The scale of the migrant crisis has made visible an often-overlooked population of workers. With political will, and investment at federal and state levels, this could be an opportunity to transform livelihoods.

As thoughts will turn to how to stimulate economies and get people back to work, it is imperative that those in authority turn their minds to how to create a more just society, that invests in healthcare, and has a social protection system that supports the most vulnerable in society.

Migrants are not just objects of charity that need support. Internal migrants are key income generators that play a vital role in Indian society and should never be overlooked again.

This article was originally published in Routed Magazine.

Flaring is a significant source of economic and environmental waste. Except when safety-related, flared gas can often be captured and monetised using low-cost proven solutions.

In doing so, governments can improve health and safety, reduce emissions (of carbon dioxide, methane, and particulates) and add value by driving up revenue, increasing reserves and production, creating jobs and improving the industry’s ‘social license to operate’.

Flare capture also helps countries to deliver on the Paris Agreement and the UN’s Sustainable Development Goal #13 while, for example, providing affordable alternatives for heating and cooking.

The Middle East and North Africa (MENA) region accounts for 40% of the world’s flaring. In the region, flaring has increased year-on-year - apart from 2018 - to almost six billion cubic feet of gas per day, generating up to 300-500 million tonnes of CO2-equivalent emissions per year.

These emissions result not only from the combustion of gas, but also from the venting, from inefficient flares, of un-combusted methane, a more potent greenhouse gas. Yet much of this is avoidable.

There are many commercially attractive options to reduce flaring in MENA. The key is to use the right proven technology and to be agile in commercial structuring. And the prize could be a boost to MENA’s annual revenues by up to $200 per second (up to $6.4 billion per year) by delivering wasted gas to market by pipeline, as power or in liquid form.

The chart highlights the abundance of flaring across the MENA region, and in many cases, their proximity to population centres. While Iran, Iraq, and Algeria generate 75% of MENA’s flaring, Saudi Arabia, Kuwait, UAE and Qatar are notable for their relatively low ‘flaring intensity’ i.e. flaring normalized to oil production.

In today’s world of lower energy prices, it makes sense to monetise every molecule. Even more so for national oil companies, which are responsible for most of the flaring, since they are not only the custodians of their countries’ natural resources, but they also generate a dominant source of government revenue.

Most oil producers in MENA have already made commitments to the World Bank’s flaring-reduction initiatives (e.g. ‘Zero Routine Flaring by 2030’), but to date, delivery is mostly lacking. Three main issues have hindered progress.

Firstly, operators, regulators, and governments highlight that flaring is often not ‘sufficiently on the radar’. Flaring is often underreported if not ignored or denied - although satellite detection gives unavoidable transparency. In MENA alone, more than 1,700 flare clusters are visible every day from space.

Secondly, flare capture is sometimes not perceived to be economically viable due to costs, taxes, or inappropriate technology. Thirdly, there are often issues around resources, especially concerning management bandwidth, delivery capabilities or financing.

Yet these issues can be solved if the right proven technologies are combined with the right commercial structures. To accelerate flare capture projects, stakeholders in the MENA hydrocarbons sector must consider several complementary, action-oriented initiatives.

In particular, they should:

• Promote transparency and disclosure to drive greater awareness of flaring. Governments, regulators and operators must understand the real scale of their gas flaring opportunity and be capable of acting, as a recent report for the EBRD on Egypt highlighted. Compliance with clear standards for measuring, monitoring and verification is critical.
• Advance policies and incentives which encourage action. Better commercial terms will incentivise and accelerate flare investments. Stronger penalties will help, but independent and capable regulators must actually enforce these penalties. Through the use of such clear anti-flaring policies, Norway’s flaring intensity is almost 20 times lower than the MENA region.
• Improve the investment climate, beyond economics and open access to a broader range of players. Local market failures can be avoided by reducing the complexity and cost of in-country operations and by removing excessive, rigid, or redundant regulations. By enabling greater ‘third-party’ access to gas and power projects and infrastructure, new players can accelerate change by deploying new technologies and new operating models. Better third-party access will also unlock ideas, capital, skills and project-specific financing options. Algeria is making steps towards such liberalisation through its new 2019 Hydrocarbon Law.
• Reduce subsidies and improve energy efficiency and reduce demand, increase gas exports and boost national revenues. Countries with large subsidies on transport fuels and power, such as Algeria and Iraq, stand to gain the most.
• Encourage collaboration between stakeholders in industry and government by creating working groups to radiate best practices, build capacity, deploy technology and local content, such as the flare minimization programme in Saudi Arabia or Iraq’s major flare-to-power project operated by the Basrah Gas Company.

The industry needs to prepare for a greener world after COVID-19 and investors and consumers are demanding cleaner fuels. Since gas is widely viewed as a transition fuel, MENA governments and stakeholders must work to eliminate its wastage and seize the revenue, production and environmental opportunities that flare capture projects offer.

There is much new leadership in the region in government and critical institutions with new mandates for change. The time to act is now.

For a leader who had not travelled abroad since his inauguration – skipping G20 and APEC summits and the UN General Assembly – and who is probably one of the most intellectually incurious and disinterested Mexican presidents of the modern era when it comes to global issues, President Andres Manuel Lopez Obrador could have certainly waited until after the US elections in November to travel to Washington and personally engage with President Donald Trump .

Instead, Lopez Obrador – who has sought at all cost to avoid conflict with his US counterpart, having decided that bending the knee was a better option than standing his ground with Trump – waded straight into electoral politics in the US, despite his repeated assurances to the contrary.

The decision to travel now to Washington was fraught with political and diplomatic challenges, not least the fact that President Trump will use President Lopez Obrador as an electoral prop.

To American audiences, at a time when the US is riven by social and political convulsion unseen in 50 years since the Vietnam War and the civil rights movement, meeting with Trump in Washington just before the general campaign starts was seen by many as a pat on the back for a polarizing and unpopular president.

In Mexico, most discussion has been about the merits and timing of the visit, with one El Financiero newspaper poll conducted a week before showing public support (59%) for the trip, while a post-visit Reforma newspaper survey showed that a substantial majority of those polled (69%) believe a Biden victory in November is a better outcome for Mexico.

While it’s true that Lopez Obrador returned to Mexico unscathed, his visit – and his baffling Rose Garden remarks stating that Trump (the most anti-Mexican US president in modern history) has shown respect to Mexico and Mexicans – is certainly a slap in the face to migrants in the US, 11 million of whom are Mexicans, to American NGOs and activists that defend the rights of migrants and enlightened immigration and asylum policies, and a boon to Trump’s dog-whistle xenophobia and chauvinism.

Lopez Obrador’s words added insult to injury by asserting the US president has never imposed anything on Mexico, blithely ignoring Trump’s March 2019 threat to impose punitive tariffs on Mexico unless the country deterred and stopped Central American transmigration flows through Mexico on their way to the US.

Certainly if the purpose of the visit was to celebrate the July 1 entry into force of the USMCA – a spin made even more hollow by the fact that Canadian Prime minister Justin Trudeau decided to skip the event – then Lopez Obrador should have been reaching out to the Speaker Nancy Pelosi and the Democratic leadership to meet and thank them too, given the important role they played in supporting the revamping of NAFTA and the ratification of the USMCA.

The best-case scenario is that the meeting between the presidents will be leveraged by both governments to address looming hurdles with the entry into force of the USMCA.

But Trump still seems intent on wielding punitive tariffs and mercantilist measures to extract concessions from either Canada or Mexico. And across the border, the Lopez Obrador government – and his party in Congress – continue enacting abrupt policy shifts and changes to the rules across different sectors of the economy that bode ill for the level playing field required under the USMCA.

What could have easily been achieved via a virtual event has now morphed into a second successive Mexican government jumping on the Trump electoral bandwagon, after Enrique Peña Nieto’s ill-advised invitation to then-candidate Trump to travel to Mexico, and a new opportunity for the US president to ‘pimp’ Mexico for his campaign purposes. Perceptions have certainly deepened among Democrats that Lopez Obrador prefers to see Trump re-elected.

Although Lopez Obrador’s aim was to buy Mexico time between now and January of next year by hoping this visit will contain Trump’s anti-Mexican tirades on the campaign trail, whether or not Trump stops using Mexico as a political-electoral piñata is yet to be seen. I would not hold my breath.

Moreover, for a leader whose default position is ‘the best foreign policy is domestic policy’, the trip lays bare a paradox in Lopez Obrador’s mantra. It is precisely Mexico’s domestic weaknesses and failings that create foreign policy vulnerabilities, particularly vis-à-vis the Trump administration. And it is likely these will be used in the coming weeks and months to once again to pressure Mexico in what has become Trump’s ‘Sinatra Policy’ towards his southern neighbour: 'My Way'.

Perception is indeed reality, and Lopez Obrador – and more importantly Mexico – can ill-afford to be perceived as Trump’s patsies at this juncture of American history. As many expected, it only took four hours after President Lopez Obrador’s White House remarks for Trump-supporting Hispanic-outreach social media accounts to start piggybacking on them. Campaign officials have also specifically said they will likely use his quotes in TV ads aimed at Hispanic voters later this year.

In addition, there is a potentially bumpy road ahead for Mexico’s relationship with the Democratic Party. The statements and tweets issued by former vice-president Joe Biden, Biden campaign surrogates and officials, prominent Hispanic Democrats in Congress, and the Democratic National Chair signal as such, as does a letter sent the same day of the visit by Democratic representatives regarding outstanding labour issues in Mexico related to USMCA compliance and enforcement.

This trip could have a long-standing impact for Mexico’s relationship with the US – and US society – and the voters that will determine the future of this country in the decades to come. Lopez Obrador’s meeting with Trump could well become a ‘travel now, pay later’ moment in Mexico-US relations.

Back in April, nervousness about external debts reached its peak when highly-respected economists Carmen Reinhart and Kenneth Rogoff suggested emerging economies with less than a AAA credit rating be offered a moratorium on all their external debt service payments.

Although such a proposal might make sense if emerging economies were actually facing any serious shortage of access to foreign exchange, it is a difficult case to make. What we should worry about is not the external debt of emerging economies, but rather the large increases in government debts denominated in their own currencies.

In the first six months of 2020, borrowers from emerging economies issued more than $400 billion of Eurobonds to international investors, up by one-fifth over the same period in 2019. Most of these bonds were sold by borrowers with relatively high credit ratings, but many of the poorest countries do not fear for their access to international capital markets - largely because the US Federal Reserve increased global supply of dollars to a point where their availability is beyond question.

Much of the panic about emerging economies’ external debt comes from ‘sticker shock’ - the bald fact that developing countries’ external debt rose by $4.1 trillion in the decade to 2018 generates much hand-wringing.

But the increase in gross external debt of developing countries looks a lot scarier than the net increase in debt, which sets off a country’s foreign assets - mostly foreign exchange reserves - against its liabilities. And it is net that counts.

At the end of 2018, foreign exchange reserves covered 70% of the external debt of low and middle income developing countries - much lower than a decade ago, when that coverage was above 100%. But in the 1980s and 1990s – two decades of financial instability largely because of excessive foreign debt – the coverage was 15%. By that measure, we are far from crisis territory.

Complacency about the external debt burden of developing countries is quite wrong. But, if complacency is misplaced, so is panic.

The debt growing most worryingly is the domestic debt of governments. There are large, systemically important emerging economies who will suffer eye-watering increases in public debt this year thanks to a combination of collapsing GDP and the fiscal effort needed to save lives.

In Brazil, public debt is rising from 75% GDP last year to a level that could top 100% in 2020. South African public debt is rising from just over 60% last year to something close to 80% GDP. These are truly unprecedented levels of debt.

So why worry about a government’s domestic debt? These are debts which are denominated in these countries’ own currency. So surely the central bank can just print the currency needed to repay their obligations if more conventional solutions – such as tax increases – will not work.

But it is one thing for the US Federal Reserve to increase supply of dollars on a massive scale, since the world is hungry for them - it is quite another thing if emerging economies do the same with their currencies which almost entirely lack the many attractions of the dollar. That remains the currency of the pre-eminent global superpower whose capital markets offer legal certainty and depth of liquidity. And other highly developed economies have a similar privilege.

And yet printing money – in effect, asking the central bank to finance budget deficits – does seem as though it could become a more attractive option for many emerging countries. Importantly, international fund managers have lost interest in buying bonds issued by emerging economy governments in their local currencies. Just a few years ago, foreign investors owned more than 40% of South Africa’s public debt. That has fallen sharply to 30% and is unlikely to rise.

Monetising budget deficits was once anathema, since it was routinely associated with uncontrolled rates of inflation - bad news not only for firms trying to decide whether to invest but also for the poor, who suffer disproportionately when inflation accelerates.

Right now there are emerging economies – such as Indonesia – whose central banks lend directly to the government, and the sky has not fallen in. The rupiah has been remarkably stable this year. However, there are other examples – Argentina, Turkey – where central bank financing of government deficits has been associated with uncomfortably high inflation rates.

This needs careful watching. The biggest risk is the accumulation of public debt threatening longer-term growth. If firms stop investing because they worry about the risks to the value of their currency as domestic public debt explodes, emerging economies will have a tough time growing their way out of these debts.

It could be this, rather than the external debt of emerging economies, that is the biggest risk to the post-coronavirus economic environment in the developing world.

Russia is one of the few countries in the region to have no legal definition of domestic violence and, as a result, there are no protective measures specific to domestic violence such as restraining orders or compulsory anger management training for abusers. In fact, the government has taken steps in recent years to remove any legal distinction between assault happening in one’s home, and elsewhere, with battery among family or household members for first-time offences decriminalized in 2017.

The Russian Ministry of Justice explicitly defended this position in its response to an enquiry into Russian domestic violence cases by the European Court of Human Rights (ECtHR) in November 2019. The ministry claimed existing legislation adequately protects citizens from domestic violence, ‘even though it has never been considered a separate offence’, reiterating that there is ‘no need’ for adopting specific legislation.

However, the four cases that led to the ECtHR’s enquiry demonstrate that current legislation is not sufficient. The most prominent case is that of Margarita Gracheva whose ex-husband severed her hands in 2017 despite her having made multiple complaints to the police ahead of the act being committed. If Russian legislation had mechanisms in place to isolate victims from their abusers, then Gracheva could have been protected by the law.

Instead, systemic impunity for abusers is supported by statements from people in power excusing domestic violence. The most recent of such statements came from the head of the Chechen Republic, Ramzan Kadyrov, in June 2020. When meeting with the family of a young woman allegedly murdered by her husband, Chechnya’s leader said, husbands beating their wives ‘happens’ and that the young woman should have tried harder to hold on to her marriage. These statements send clear signals to abusers that their actions are justified, and to the victims, that they won’t be protected if they were to come forward.

Similarly, to other parts of the world, civil society organizations in Russia have reported an increase in the number of cases of domestic violence during the COVID-19 pandemic. On a personal level, the pandemic has often exacerbated many of the factors that can lead to domestic violence such as stress, economic anxiety or social isolation.

On a systemic level, many of the provisions intended to protect victims of violence, which were already ineffective in Russia, have been worsened during the lockdown. Where police may not have rapidly responded to reports of domestic violence previously, under lockdown, they have become focused on  other priorities and, where shelters and support networks for the victims may have been scarce in the past, they have been further constrained.

Unsurprisingly, the strategy of the Russian state so far has been to deny that there is a problem of domestic violence, with the Ministry of Interior reporting that, according to their statistics, the number of domestic violence cases have gone down during the lockdown. Indeed, Chairwoman of the Federation Council, Valentina Matvienko, has said she does not believe lockdown has increased domestic violence because, on the contrary, families have been  ‘brought together’, reflecting wishful thinking at best and negligence at worst.

The pandemic has also been used as an excuse to postpone discussion of a federal law on domestic violence, drafted by civil society, that was submitted for review by the Duma last year. This bill would have introduced different types of domestic violence such as psychological and economic violence and transferred domestic violence offences from private to public prosecutions to make it easier for victims to seek justice.

The government’s disregard for domestic violence reflects, in part, the patriarchal mindsets of those in power but perhaps, more significantly, the Kremlin’s belief that conservative social groups constitute its main support base. This has been made evident by the politicization of Russia’s ‘traditional’ values in recent years which was vigorously deployed throughout the constitutional amendments campaign. While it is clear that the true purpose of amending the constitution has always been to allow Vladimir Putin to stay in power beyond 2024, amendments relating to this were absent from the government’s campaign. Instead, Russians were encouraged to vote by populist socially-conservative messages, hence why respect for traditional values has been added to the constitution.

Despite this, attitudes in Russian society are changing. A February 2020 survey by the Levada Centre showed that 61 per cent of Russians – and 74 per cent of Russian women – think domestic violence is a serious problem.

Moreover, the survey shows that women are much more aware of domestic violence than men – with every third woman in Russia admits being aware of domestic violence in their social circles while only every fifth man admits the same. This could be a sign that Russian men and women, on average, have a different understanding of what constitutes domestic violence. If so, adopting a law that defines domestic violence and holding a public awareness campaign is of paramount importance to eliminate any misunderstanding.

The difference could also be a sign that victims of domestic violence are more likely to confide in women hence making domestic violence less visible to men. This awareness gap perhaps explains the difference between men’s and women’s assessments of how serious the issue in Russia is.

The pandemic has provoked a new wave of discussions of domestic violence among Russia’s population with stories and statistics widely shared in the media and on the internet. As domestic violence becomes more visible, public perceptions are likely to shift further towards recognizing, and hopefully condemning, it. But, while legislation is crucial, the experience of other countries in the region, such as Armenia or Kazakhstan, shows that adopting laws on domestic violence is not enough. Measures are needed to ensure implementation of the law including training police officers and state officials and instituting disciplinary action for negligence of victims’ complaints.

Nevertheless, admitting there is a problem with domestic violence in Russia, and introducing laws, are an essential first step. The Russian government seems to have placed its bet on the support of conservative social groups but changing public opinion may prove this strategy unsustainable.

The UK’s decision to ban its mobile providers from buying new Huawei 5G equipment after December 2020 and removing all the company’s 5G kit from their networks by 2027 is a blow to Huawei and China, but it is one battle in a long war that the West is currently losing.

5G’s significance for the next generation of technology is indisputable and so is its critical role in helping countries achieve digital transformation and economic success. Not only does it offer faster and better connection speeds and greater capacity, it also transforms the way people interact with online services. And it will allow industry to automate and optimize processes that are not possible today.

Due to its transformative importance, what is in essence a technological issue has turned into a contest over global technological leadership that extends beyond the US-China rivalry and has created tensions between the US and its long-time allies. Yet 5G is just one key technology in a more expansive landscape that will underpin the future of the world’s critical infrastructure, including in areas such as quantum computing, biotechnology, artificial intelligence, the internet of things and big data.

To achieve technological leadership in these domains requires governments to invest in a long-term, strategic and agile vision that is able to encompass the interdependencies between these areas and then leverage the resulting technological advances for economic progress. It also requires governments working with each other and with the private sector to support research and development and to create companies with leading-edge technologies that can compete globally.

China understands this and has a national and international vision to establish itself as a technological superpower. Re-balancing from a hub of labour-intensive manufacturing to a global innovation powerhouse is the absolute priority of the ruling Chinese Communist Party.

China’s state-led approach

In the earlier part of this journey, commercial espionage and IP theft of western R&D were at the heart of the Chinese way of competing. Now, Beijing is cultivating national champions that can drive China’s technological innovation, with the goal of using domestic suppliers to reduce reliance on foreign technology at home as well as extending its international outreach. 

In the 5G area, Beijing has introduced domestically the so-called ‘New Infrastructure Investments Fund’, which earmarks special loans to boost 5G technology applications in medical devices, electric vehicles and communication platforms. This Fund constitutes a major part of the stimulus package for China’s post-COVID economic recovery.

Apart from 5G, China's recent launch of a second state-funded semiconductor development fund valued at $29 billion, following an earlier $20 billion fund for the same purpose, shows the extent to which state financial resources are being utilized in China’s quest to become technologically self-sufficient.

It is too early to know if the Chinese government’s industrial policies will eventually achieve the technological self-sufficiency Beijing has long desired. But its growing national capabilities have stoked serious concerns across the West and led to the current US administration’s determined effort to dismantle Chinese high-tech companies.

China’s approach to macroeconomic management diverges significantly from that of the US and other market economies, particularly in its policy towards driving innovation.  Due to the legacy of a state-planned economy, China is certain that simply relying on market forces is insufficient.

While Beijing financially supports government-controlled technological enterprises, Washington takes  a laissez-faire, light-touch approach by the state to the business sector. The US believes that a politicized process of distributing public money is inherently susceptible to rent-seeking and corruption, and gets in the way of competitive innovation. In line with most liberal economists, many Western governments believe the government should refrain from market intervention. For its part, Beijing stresses a state-dominated economy as a necessary precondition both to the future growth of the Chinese economy and to the legitimization of one-party rule. 

If the pro-market economists’ view is correct, the US should have little to fear from Chinese industrial innovation policy in the long-term. Let Beijing waste money and distort resource allocation, while Washington follows its private sector-led principles, confident that this approach will produce a more competitive economy in the long run.

Using the leverage of technical standards

But one area that should concern the US and that illustrates the Chinese vision for global technological dominance is technical standard setting. Technical standards determine how technologies work with each other, enabling their interoperability around the world, meaning they can function irrespective of where they are being used.

The Chinese leadership has long understood the relationship between technical standards and economic power. Standards help to monetize technological innovation and research and can help shape new technologies. China has therefore been playing an increasingly active role in international standards organizations to legitimize Chinese technologies, whereas the US, which historically has been highly influential in this area, has not been participating as much or as effectively.

China has also been using its Belt and Road Initiative (BRI) as an opportunity to internationalize the distribution of its standards to countries signed up to the BRI. The so-called Digital Silk Road, which has been described as China’s most important global governance initiative, acts as a route to accelerate this process. Later this year, China is expected to launch its new ‘China Standards 2035’ plan, which aims to shape how the next generation of technologies will work together.

China’s preferred model and its recent actions have given Western leaders much to worry about.  But standing up to China’s growing global influence in high technology and re-establishing the West’s desired technological edge will take much more than achieving a common front on excluding China from their 5G networks. It requires a long-term vision built on the power of competitive markets, backed by solid investment in the next generation of technology. This will require, in turn, much greater cooperation between Western governments and between them and their private sectors.

And, whilst recent protective steps taken in Washington and other Western capitals may slow down China’s trailblazing in the technology sphere, it will only hasten China's determination to become tech self-sufficient in the long term. This will increase the probability of a splintered internet, which will have negative repercussions for all.

The UK has been redeploying diplomatic, defence and development capabilities towards the Sahel since 2018 – a strategic pivot intended to deliver development impact, address long term security threats to UK interests and support alliances with international partners.

The Sahel is one of Africa’s poorest and most fragile regions and has witnessed an escalation in jihadist activity, illegal migration and trafficking since a security crisis erupted in Mali in 2012.

The crisis spread to Niger and Burkina Faso and may now spill over into Côte d’Ivoire, Ghana and Senegal. With Nigeria also facing insurgency in the Lake Chad basin, all major regional security and economic anchors in the region are under threat including key UK partners. 

Reviewing the Sahel pivot

This pivot has already resulted in the expanding of UK embassies in Senegal, Mauritania and Mali and public commitments to opening new ones in Chad and Niger.

Back in London, there has also been a large uplift of staff including the setting up of a cross-Whitehall Joint Sahel Department in late 2018 and plans for more UK civil servants to have placements with the French government on the Sahel.

Yet in light of looming economic shocks from Brexit and Covid-19, there has been a lively debate in Whitehall on whether this is stretching UK resources too thin in an area of Africa that does not have close ties with the UK.

UK ministers are this week reviewing the Sahel pivot and will decide if it continues or grinds to a standstill including whether full embassies are opened in Niger and Chad.

This debate is not new. The UK has opened and closed its diplomatic missions in the Sahel in fits and starts since the early 1960s. More recently, MI6 pushed the re-opening of the embassy in Bamako in 2010 foreseeing Mali’s fragility before the current crisis started.

Partnering with the French

But though the Sahel is likely to dominate the Africa peace and security agenda for decades to come, the UK’s serious engagement in the region is not just about strategic foresight.

It also fulfils two other objectives: of partnership with two key bilateral allies, particularly France, and authority and leverage in multilateral fora such as the United Nations, African Union and the EU.

Partnering with the French in the Sahel has become even more important due to Brexit and the need to reinforce relationships with key European partners.

In 2012, David Cameron concluded that the rapid French response to stop a jihadist advance on the Malian capital Bamako was 'in our interests' and authorized the deployment of 330 UK military personnel, two cargo aircraft and a surveillance plane.

In July 2018, the UK announced further support to French led Opération Barkhane sending three Royal Air Force Chinook helicopters – supported by almost 100 personnel – which remain in theatre to this day.

UN commitment

Demonstrating the UK’s commitment to UN peacekeeping has also resulted in the deployment of 250 troops to join a UN peacekeeping mission to Mali later this year.

Based in Gao, these troops will form a long-range reconnaissance capability providing threat awareness, contributing to the protection of civilians and helping to prevent conflict from spilling over to neighbouring states.

This represents one of the biggest British peacekeeping deployments since Bosnia and it will be the most dangerous mission for British forces since Afghanistan.

The UK is also one of the largest humanitarian donors to the region and has contributed over £500 million in bilateral development and humanitarian assistance since 2015.

With COVID-19 now an additional challenge in the Sahel, a significant part of the UK’s £764 million contribution to the global COVID-19 effort will be channelled to the region.

New embassies are 'global Britain' strategy pillars

Keeping an eye on the impact of these initiatives requires a meaningful UK diplomatic network on the ground.

New embassies in the Sahel cost a fraction of maintaining three Chinook helicopters in the region providing the government real time insight in the post-Brexit absence of a regular supply of country analysis from the European External Action Service and support for the UK’s international relationships.

It also underlines the UK’s commitment to UN peacekeeping and standing as a permanent member of the UN Security Council in light of regular discussions of the Sahel.

The tripartite ministerial review of the Sahel pivot by the secretaries of state for foreign affairs, international development and defence that is underway should not penny pinch by reversing the opening of small embassies in Niger and Chad nor threaten the overall strategic focus on the Sahel – most recently welcomed by the House of Lord’s Select Committee on International Relations and Defence in its July report on UK Africa policy.

Instead, UK ministers should focus on better defining what the UK’s specific objectives are in the Sahel and particularly what the UK plans to do about Burkina Faso whose rapidly deteriorating security threatens to over-spill into key UK partner Ghana.

This article was first published in the Daily Telegraph.

While we must wait for the final reckoning of most successful national coronavirus responses, it does still appear those countries with memories of MERS and SARS - such as Singapore, Taiwan, Hong-Kong, and South Korea – led the way in being best prepared for COVID-19, with strong contract tracing and isolation measures.

Experience of previous outbreaks informed the containment strategies adopted by countries in East Asia in response to COVID-19. Vietnam reported its first case of COVID-19 in January but, over the following four months with rapid targeted testing, contact tracing and successful containment, only around 300 additional cases with no deaths were confirmed.

These countries learned to be flexible fast when new transmissions occurred, establishing quick lockdown measures targeted at key groups such as Singapore’s schools or South Korea’s night clubs and religious centres. In stark contrast, most European countries were overwhelmed by the pandemic despite enjoying world-class health systems, predictive models, scientific expertise, wealth, and resources.

Asia may have suffered first from coronavirus, but there is no ‘first mover advantage’ in dealing with a pandemic. The more resilient a society, the better placed it is to cope with a variety of risks and challenges. But to become resilient, a society needs to have faced setbacks and learned from them. And to remain resilient, it needs to stay aware of its own vulnerabilities and avoid complacency.

Prior experience of crises and disturbances, coupled with a ‘trial and error’ process of learning to deal with them, makes a society more resilient, whereas high levels of economic welfare and relative lack of recent crises leave some societies less prepared to face shocks. This is known as the ‘vulnerability paradox’.

Within Europe, it has actually been the Greek handling of COVID-19 that so far appears more successful than others. Greece is a country which has suffered a decade of austerity leading to a weakened healthcare system. And with one of Europe’s oldest populations, the Greek government was keenly aware of its own vulnerabilities. This prompted an early lockdown and a rapid increase in intensive care beds.

Although better state capacity and health system capability are clearly positives for mitigating disasters, citizens do tend to be less familiar with risk preparedness. This lack of experience can then breed complacency which threatens societies where risks are often complex, numerous, transboundary and inter-related.

Conversely, the absence of systemic resilience at a national level often puts the onus on family units or local communities – creating resilience as a necessary response to weak government capacity. There is little choice but to learn to look after yourself and your community.

However, although the vulnerability paradox helps explain why prior experience makes a system more resilient, societies need to stay aware of their own vulnerabilities and avoid complacency if they are to continually remain resilient.

Complacency coupled with a belief in the virtues of the free market has left some countries hit harder than others by the pandemic. In normal times, ‘just in time’ business models can be highly efficient compared to holding vast stocks. But it does not require hindsight to know that a global health crisis will see demand for protective equipment soar and these business models severely challenged.

Several societies have also witnessed a decline in trust towards institutions, especially politicians or the media. The deployment of science as justification for political decisions around coronavirus was presumably intended to help garner trust in those decisions. But when the science itself is inexact because of inadequate or emerging knowledge, this strategy is hardly fail-safe.

COVID-19 does provide an opportunity to rebuild trust by rethinking the relationship between the state and its citizens, to engage people more directly in a discussion about societal resilience with empowered citizens, and to rebuild a social contract between state and society in the context of recent significant changes and further potential threats.

It should also provide a salutary wake-up call to a range of ‘strongmen’ leaders prone to portraying issues rather simplistically. Although COVID-19 may be one of the few complex problems to which simplistic measures do apply - such as wearing a mask and using social distancing – these do not provide the whole solution.

Generally, declining trust in politicians reflects the ongoing inability of current politics to deal with a range of societal challenges. COVID-19 is certainly the most sudden and presents the biggest immediate economic shock of recent times, but it is just the latest in a long line of examples of political failure, such as conflict in the Middle East, climate change, terrorism, and cyber-attacks.

Along with the growth of automation and digitization which provide opportunities at the macro-level but threats at a more micro-level, what most of these issues have in common is that national responses are likely to fail. Restoring trust requires re-energized global governance, and this means compromise and humility – qualities which appear in short supply to many current politicians.

But, regardless of political will, building resilience to tackle ongoing or rapidly forthcoming challenges also rubs up against free market beliefs, because building resilience is a long-term investment and comes at a price. But by acknowledging vulnerabilities, avoiding complacency, implementing lessons from past experiences, and learning from others, policymakers will be better prepared for the next crisis.

Reconstructing societies through the prism of resilience creates fundamentally different outcomes to global challenges, and can build trust between elected representatives and the wider population. Accepting the vulnerability paradox and acknowledging that those generally less prone to disasters are actually less able to cope when change happens creates a powerful argument for this new approach.

Belarusian president Aliaksandr Lukashenka deserves sanctions. This election campaign in Belarus, which culminated in a vote on Sunday is the most brutal and dirty in its history. But, so far, the EU, the UK and the US have only issued familiar-sounding and futile appeals to the Belarusian authorities condemning their actions. Not imposing sanctions is a de facto licence to continue with repression.

Despite all this, the West is unlikely to impose significant sanctions afterwards. There are several questionable reasons for this. First, Western policymakers fear sanctions against Lukashenko will make him more likely to genuflect to Russia. However, relations with Russia have already deteriorated as Belarus accuses Russia of trying to interfere with its domestic affairs.

Sanctions serve as a wake-up call. The Belarusian authorities then might seek - once again - to repair relations with the West and reduce repression for greater assistance in any direct confrontation with Russia.

Second, the West is reluctant to implement sanctions because it has already invested somewhat in warming relations with Belarusian authorities. Punishing Lukashenko could mean burying the - admittedly modest - achievements of a Belarus-West dialogue that started in 2014 after the conflict in Ukraine began.

Even US secretary of state Mike Pompeo met with Lukashenko in Minsk this year, after which Belarus replaced a small but symbolic amount of Russian oil for American. All the same, the West has its conscience to answer to if dialogue is won but repressions continue.

The third reason why the West may not resort to targeted economic sanctions and visa restrictions is a latent concern whether such measures have any effect on democratization processes at all. They may be appropriate punishment, but there is little evidence they ever change the nature of a regime.

According to this logic, if the West imposes sanctions, the Belarusian authorities will continue to crack down with repression because they will have nothing to lose. That said, in previous years, the Belarusian authorities have released political prisoners in response to sticks and carrots brandished by the West. If Belarusian political prisoners did not have a price tag, the authorities would most likely keep everyone in jail.

To be fair, there are reasonable arguments in favour of and against sanctions. But if the West fails to impose them - be it through lack of political will or out of genuine concern about their effectiveness - at least it should focus on helping ordinary Belarusians withstand Lukashenko’s repressions. After the vote, arrested and jailed Belarusian citizens might lack money for lawyers and arbitrarily imposed fines.

If repression spreads further, independent media and human rights organizations will need funds to keep their structures running in the heat of the crackdown. Many entrepreneurs might lose their companies for openly supporting free elections. Thus, if the West will not sanction Lukashenko, it should at least show solidarity with these Belarusians in peril.

This article was originally published in The Telegraph.

Despite being such a historic selection, in certain aspects, Kamala Harris does not actually signal change. She is a moderate in the Democratic Party, an insider more than an outsider, and a highly experienced leader with national, state level and city level credentials. She worked as a district attorney in San Francisco for several years before being elected attorney general for the state of California, and then to the US Senate in 2016. Harris also stood as a candidate against Biden in the contest to become the Democratic Party's presidential candidate.

Like Joe Biden, she is a highly experienced leader with strong credentials. But California is solidly blue, so she cannot deliver a new state for him. In many ways she is a safe choice and — at a time when Biden is far ahead of Donald Trump in the polls and America faces a lot of uncertainty — many leading political analysts say safe is exactly what the Democratic candidate needs.

But certainly as a signal to the American people, and the rest of the world, of what America is and what it stands for, the choice of Kamala Harris is truly historic. The senator from California is the first African-American woman, and the first Asian-American woman, on the presidential ticket. If Biden wins in November, Harris becomes the first female vice-president.

The historic aspects do not end there. Harris also represents a rapidly growing segment of the US population, but one that gets far less mention — multi-racial Americans. The exact size of America’s multi-racial population has been notoriously hard to measure, especially as it has only been 15 years since the US Census Bureau allowed Americans to choose more than one race when completing their census form. But America has long seen itself as a melting pot, so Harris’s place on the ballot underscores a national narrative with a deep resonance across the country, not least among America’s schoolchildren.

In recent weeks, it came to feel inevitable Biden would choose an African-American running mate. His selection comes at a time when more Americans than ever before have taken to the streets to protest the brutal killing of George Floyd and racial injustice. And the demand for racial equality has been accelerated by the COVID-19 pandemic which has disproportionately affected African-Americans who are dying from the virus at around double the rate of their white American counterparts, while twice the number of black businesses are closing relative to their white counterparts.

The choice of Harris also speaks to another fundamental aspect of the ‘American dream’. She is the daughter of two immigrant parents, her father being from Jamaica and her mother from India. Immigration has become one of the toughest issues in US politics, and immigrants have suffered repeated rhetorical attacks from Trump. One of Harris’s first stands in the US Senate was against President Trump’s entry ban to the US on several countries with majority Muslim populations.

When it comes to questions of identity, the choices that the US electorate now face in November could not be more stark. President Trump used the opportunity of the July 4 weekend to deliver a speech at Mount Rushmore which appeared to actively seek division and to ignite America’s cultural wars.

By choosing Kamala Harris, Biden also continues to signal that he will lead from the moderate wing of the Democratic Party.

Harris may be left of Biden, but she is far to the right of other well-known progressive candidates, especially Elizabeth Warren. She has not, for example, supported more far-reaching measures to redistribute wealth, especially the proposal for a wealth tax. And she has a track record of being tough on crime during her years as a prosecutor. Although she played an active role in recent protests and signalled her commitment to police reform and anti-lynching laws, not all young or progressive protesters will be easily persuaded by her credentials.

However, for voters who hoped for a more progressive candidate, two factors play to the advantage of the Biden-Harris ticket. This election still looks set to be a referendum on President Trump and — especially now — his ability to manage the public health and economic crises at home. And Biden has continued to include the progressive side of the Democratic Party in his plans, giving Bernie Sanders and Alexandria Ocasio-Cortez key roles in developing climate proposals, and establishing a series of Unity task forces to bring the party together.

There are also other more conventional factors at play. Biden has relied on the support of African-American and also female voters. While Harris may not broaden this support, it should help ensure these voters turn out — if primarily via their postal box — to vote for Biden. His choice of Kamala Harris answers the one big outstanding question facing his candidacy and signals the true beginning of the race to the White House.

Healthy forests have always been a vital resource for the communities living in, and around, them. Offering food, clothing, fuel and medicine, forests also stabilize the water table and guard against soil erosion. Timber from forests also serves local, national and international markets, generates jobs and is an important revenue stream for many governments around the world.

Forests have also increasingly been tasked with combatting the double threats of climate change and biodiversity loss. Furthermore, the COVID-19 pandemic has put a spotlight on the role of forests in preventing diseases which has further added to the need to preserve the world’s forest area.

However, at the same time, pressure on forest lands is increasing, particularly for agriculture and also for mining, infrastructure and urbanization. But, with myriad demands placed on forests, and impacts that transcend political boundaries, achieving a balance requires a reckoning of local and global priorities.

International forest initiatives until now have, quite rationally, prioritized a globalized conceptualization of forests – privileging their place in global supply chains and global crises. International regulations around timber, for instance, are primarily aimed at securing a long-term source of timber by reducing illegality in the system while national plans under the Paris Agreement focus on forests primarily as a global carbon sink.

Within these initiatives, local impacts are often dealt with as flanking measures. Community benefit-sharing agreements, compensation schemes and incentive programmes are aimed at mitigating impacts and modifying behaviour at the local level so that these align with international goals.

Meanwhile, and despite intense international attention, it has been found that globally natural forest cover declined in the six years since the New York Declaration of Forests set a goal to halve deforestation. Greenhouse gas emissions have continued to rise and, although there have been successes, illegal timber continues to be traded internationally.

To halt these trends, it is important to reflect on the demands being placed on forests and to achieve a better balance between them. But this will require radical change. That’s why, in July, Chatham House convened an online Global Forum on Forest Governance at which these issues were explored.

One issue that was discussed is why it remains vital to listen to, and learn from, a wide range of voices. Single perspectives fail to acknowledge or respond to the full range of pressures exerted on forests therefore it is important to have a range of perspectives including those from the global north and south, economists and agronomists, social scientists and climate scientists.

But beyond the research community, all those who have a stake in forests must be included in the discussion too: women and men, young and old people, those living in urban and rural areas as well as people from the government and private sectors.

This lesson has often been repeated but rarely enacted perhaps because it is not easy to do and takes time. Nevertheless, broadening participation can help deliver the deep-rooted changes that are needed to the way forests are governed and managed.

Considerable evidence exists to show that improvements to governance can facilitate a more equitable approach to forests that better balances the needs and priorities of these different groups. Legal and institutional reforms, for example, that are sensitive to the needs of local populations have precipitated change. Successes in improving transparency have also been a key factor in holding both the private sector and governments to account.

Thus, creating radical change may not mean brand new ideas. Lessons can be learnt from the successes and failures of the past. It will be important that, as new and increasing demands are placed on already overburdened forests, these lessons are not forgotten and previous mistakes are not repeated.

What will matter over the next few years will be which ideas are acted upon and who gets to decide. As more than 100 countries announce plans to increase the ambition of their nationally determined contributions on emission reductions, and as the EU and the US move forward with plans to legislate deforestation out of commodity supply chains, a clear message that has emerged is that local actors need to be in the driving seat. This needs to go beyond listening and consultation to meaningful engagement that gives due weight to local priorities, perspectives and experience.

The coup in Mali is not a putsch by disgruntled soldiers in a distant land. It is an extended European neighbourhood and matters to Britain. The UK already has three Chinook helicopters deployed in country and 250 British troops are scheduled to take up UN peacekeeping duties in December in what could be the ministry of defence’s most dangerous deployment since Afghanistan.

This coup was not unexpected as it followed months of mass protests against alleged corruption, a worsening economy, disputed legislative election results and deteriorating security in this West African country. Mali’s military is struggling to stop the insurgents, some of them now also affiliated with the ISIL (ISIS) armed group, despite UN, EU, French and regional military support.

The departure of Mali's President Ibrahim Boubacar Keita was met with jubilation by anti-government demonstrators in Bamako and the leaders of the military coup say they would enact a political transition and stage elections within a 'reasonable time'.

Coups, followed by transitional arrangements and then new elections, are not rare in this region and have happened before in Mali when Keita’s predecessor Amadou Toumani Toure was overthrown by the military in 2012. The current cycle of insecurity followed despite a significant military intervention by France to restore elected government and stop the spread of Islamic extremist insurgency.

This is a reminder of how fragile the Sahel regon is and the importance of seeking stability and state building in a region of spreading Islamic extremist insurgency and rapidly-eroding state legitimacy.

The regional bloc ECOWAS (Economic Community of West African States) has denounced the coup and ordered the closing of regional borders with Mali as well as the suspension of all financial flows between Mali and its 15 members states. What follows now will be negotiations over the transitional arrangements and the timetable for new elections.

This will not be straightforward. Although the opposition was united in their demand for Keita's resignation there is little consensus on what to do next, while the UN Security Council and ECOWAS are divided on how to respond beyond initial condemnation.

It is urgent that three UK cabinet ministers, led by the first secretary of state Dominic Raab, who are currently reviewing the UK’s Sahel strategy complete this and decide upon its future direction.

The UK government needs crystal clarity on its Mali objectives as the clock ticks down to the deployment of British troops there. Increasingly this UN duty looks to become more peacemaking than peacekeeping.

This article was originally published in The Telegraph.

It’s easy to take a look at the array of economic and diplomatic punitive policies that the sanctions-happy Trump administration has slapped on individuals and countries from Argentina to Iran and conclude that they have failed to achieve their objectives. With US oil sanctions on Venezuela, trade sanctions on select Argentine, Brazilian and Canadian exports and the tightening of the US embargo on Cuba, sanctions have become a go-to tool of the current administration.

Have they worked so far? Some have. Some haven’t. All of this leads to a legitimate question: when do they? The most extreme example, the US embargo on Cuba – first imposed by executive order under the Trading with the Enemy Act in 1961 and then codified into law by the Cuba Democracy Act (1992) and Libertad Act (1996) passed by Congress – has failed miserably, but remains an article of faith among its advocates, the bulk of them in southern Florida. The 1992 Democracy Act and 1996 Libertad Act have failed to produce either democracy or liberty in Cuba… yet their potential efficacy persists in the collective imaginations of their supporters. Why?

Conditions on Cuba

Any policy needs to have an explicit goal and with it an implicit or explicit theory of change. Whether it’s advertising that smoking kills on cigarette packages or trade negotiations, these efforts have behind them an explicit idea of the change they seek to foster and the causal relationships to achieve them. These are testable and, in theory, subject to course correction if they are not meeting their intended goals. Has advertising reduced the incidence of smoking?  Are workers better paid and receiving better health benefits and labour protections under the trade agreement several years on?

None of those has applied on the US’s embargo on Cuba. First, the policy goals have changed. In some cases, it has been stated that the limitations on US commerce and travel to the island is to reduce the regime’s international support for autocratic regimes. But Cuba’s to-the-death support of the Nicolas Maduro government in Venezuela has demonstrated this isn’t working. 

Arguably it has had the opposite effect: by impoverishing the state-centered Cuban economy, the embargo has made the regime more dependent on the decreasing oil that Venezuela supplies the island nation. In other cases, the stated goal has been regime change as the titles of the 1992 and 1996 act titles reveal.

The latter even lays out a set of conditions that must be present in Cuba before the Congress can lift the trade and diplomatic isolation the US has imposed on the island unilaterally. Those include the release of political prisoners, the absence of any Castro family members from decision-making, and credible steps toward free and fair elections. 24 years after the passage of the Libertad Act, Cuba is no closer to achieving not just one but any of those goals despite the putative incentive of a full and complete lifting of the embargo.   

The question here is the implicit theory of change for the embargo. Here, embargo supporters have never been clear about this link. First, there is the implied hope that sanctions will impose such costs and suffering on the general population that the masses will rise up and shake off autocratic rule of their overlords.

There are several problems with this. One is that general sanctions that reduce access to foodstuffs and finances – as has been the case in the US embargo on Cuba and sanctions on Venezuela – lowers the incentives for protest. It concentrates the government’s political and economic control over the population rather than weakening it. More, people who are hungry living under a repressive government simply aren’t that likely to rise up; they are often more concerned with the day-to-day struggles of getting by.

Second, there is a naïve notion that either those in power or those around them will see the light of day and decide to step down. Promoters of sanctions often have a cold-eyed reality of the nature of evil of autocratic governments. So why do they believe in some hidden decency among its inner circles? In truth, the purveyors of this view deny the basic and laudable basis for their hatred of autocrats: their bottomless cruelty and disregard for their own people. 

Do sanctions work? 

There is also a growing body of research on the efficacy of sanctions. Comparative research has revealed a number of conclusions, none of which appear to have been considered by current policymakers in the White House or State Department.  

The first of these is that sanctions work when they are implemented broadly by a wide coalition of governments. Most of the sanctions that have succeeded in their intentions have been along those lines including the UN sanctions on Iran to push the country to a nuclear deal.  

The second is that the goals of sanctions should be narrow and clearly defined. Successful cases, as Daniel Drezner who wrote a book on the topic has detailed, have been tied to specific goals. Regime change is not one of those. It is too broad and amorphous – though as I say above also unrealistic in its logic between intended effect and the targeted individual. 

A third element of successful sanctions is keeping them flexible and credible. As detailed in a Council on Foreign Relations backgrounder ‘the target must believe that sanctions will be increased or reduced based on its behaviour.’ 

That’s never been the case with Cuba sanctions under the Democracy or Libertad acts. Instead, sanctions relief is presented as a binary choice: democracy or nothing. There are no provisions for intermediate steps that could potentially incentivize changes of behaviour toward loosening state control and reducing human rights abuses.  

The recent tightening of the US embargo that included restrictions on US travel to Cuba and financial transactions under the Trump White House has been disconnected from any specific policy changes in the island. In this case, human rights conditions that the changes were linked to or intended to punish had not taken a dramatic turn for the worse. They were instead intended to simply ratchet up pressure for an embargo which advocates felt was too leaky and hope for a collapse that would weaken the Maduro regime.

That is precisely the problem for many of the most strident advocates of the US-Cuba embargo: the policy has become the objective, divorced from on-the-ground realities and incentives to move them forward.  There is the legitimate concern that the sanctions hurt the very people that the policy claims to defend. They also serve as a rallying point for the Castro regime and a way to cover up for its own economic failures.  But the most damning indictment of the embargo is that in its almost 50-year history it has failed to achieve its objectives.

If the matter is the efficacy of sanctions, then the US embargo on Cuba does not meet the test. It’s not limited to Cuba. None of the cases of regime change that many of the embargo advocates love to cite, communist Eastern Europe, the Soviet Union and South Africa had embargos as tight or isolating as those imposed on Cuba for nearly half a century. There’s a reason for that. It’s basic logic.

A version of this article will also appear in Spanish in the journal Foro Cubano in September.  

Among the many unusual features of the pandemic-induced downturn is the disconnect between depressed real economies and buoyant financial markets. This is particularly evident in the US, where output fell 9.5% in the second quarter while the S&P 500 index rose by one-fifth.

This may suggest a huge financial bubble is in the making, or at least a highly optimistic view of a COVID-19 vaccine and treatments. Another possibility is that markets have a better grasp of the economic dynamics of a post-pandemic world than most nervous consumers and governments.

Certainly, markets have been helped by central bank largesse. In March, major central banks reacted forcefully to the possibility of a serious credit crunch with lending guarantees and bond purchases. Such liquidity interventions soothe troubled markets, but they also raise asset prices — potentially into bubble territory. This partly explains the markets’ strength. But it may not be the whole story.

A closer look at market performance suggests they may be on to something more interesting. Compare the US’s broad-based S&P 500 equity index with the tech-focused Nasdaq 100. Since the start of the year, the Nasdaq has risen 24% while the S&P is up just 5%. In the S&P itself, it has been the dramatic rise of the so-called Faang companies — Facebook, Amazon, Apple, Netflix and Google/Alphabet — that offset lesser performances by the other 495 companies. This sharp difference reflects two forces.

First, the COVID-19 crisis has had vastly different effects on different sectors. Lockdown brought a sudden increase in demand for the technology services that enable home learning (with school closures), homeworking (especially by office workers), home entertainment (instead of cinemas and theatres), home shopping (instead of physical shops), and home deliveries of almost everything else, including food. The Faang companies benefited disproportionally from this surge in demand as their production is scalable. Much of it could also be delivered by employees who themselves worked from home. The rise in their share prices reflects this.

Meanwhile, other sectors suffered massively. In the UK, the overall drop in gross domestic product of 20% in the second quarter was led by a fall of 87% in the accommodation and food services sector, which was severely affected by government restrictions. About one-quarter of the UK workforce, according to official figures, was also furloughed or temporarily off work without pay during lockdown. The fall in the share prices of hotels, restaurant franchises and airlines reflects such factors. 

The second driver of rising markets is that they are forward-looking while economic statistics reflect the past. For example, that UK GDP shrank during the second quarter is less interesting to a financial investor than the fact that during two months (May and June) GDP expanded by 2.4% and 8.7% respectively. In other words, output troughed in April but recovery began in May and accelerated in June as lockdown restrictions were eased. 

It is likely that rapid adaptations by companies and consumers to the pandemic-supercharged trends are already under way. In Britain, the share of retail sales (excluding fuel) made by ecommerce rose from around 7% in 2010 to 20% at the beginning of 2020 — it has since jumped to more than 30%. 

One-third of those officially working from home meanwhile say that they would like to do that permanently, according to the Centre for Economics and Business Research, and many large companies have offered their staff this choice.

Even in labour-intensive sectors such as healthcare and government services there has been a replacement of face-to-face delivery with digital booking and screen-based consultations.

Still, while this may help some companies in certain sectors, it does not imply a smooth recovery for the whole economy. Rather, it augurs a period of disruption as new companies, new business models and new job openings emerge. If the pandemic has ignited a Schumpeterian process of creative destruction, that is likely to continue whether or not effective vaccines and treatments ever come. 

Governments should ease the pain of this disruption with supportive fiscal and monetary policies, but they should not try to slow it down. The hopeful market message is that one lasting consequence of COVID-19 may be the rejuvenation of productivity growth that eventually spreads far beyond tech. 

This article was originally published in the Financial Times.

Making the case

The recent election results in Belarus have triggered revolution in yet another post-Soviet country and Aliaksandr Lukashenka’s response has been devastatingly brutal. However, the Belarusian people’s resilience and Western sanctions – adopted on 14 August – have proved effective. As some of the 6,700 jailed protesters were released, accounts of horrific treatment by law enforcement emerged: overcrowded cells, no food, torture, forced confessions, severe beatings , and threats of rape.

With reports of mounting violence, Polish MEP Radosław Sikorski warned Lukashenka to expect not just sanctions but also the possible intervention of the International Criminal Court (ICC), an idea supported by the opposition-led Belarus’ National Salvation. While there are significant impediments to the Court’s involvement, the impact of such an initiative could be ground-breaking.

Legal framework

The ICC considers criminal responsibility of top civilian or military leaders for only the most serious atrocities - war crimes, genocide, crimes against humanity and, in certain cases, the crime of aggression. In the context of Belarus, the Court’s jurisdiction over crimes against humanity might be relevant. According to the Rome Statute, the ICC’s founding treaty, crimes against humanity include widespread or systematic abuses directed against a civilian population. Atrocities relevant to Belarus include arbitrary imprisonment, torture, inhuman treatment, sexual violence, and enforced disappearances.

The ICC is a last resort. It can intervene only if states are unable or unwilling to properly investigate and prosecute serious crimes themselves. Although Belarus’s Criminal Code punishes crimes against humanity, as Lukashenka himself is implicated, impartial trials in the country are impossible while he is still in power. Other countries may investigate specific atrocities in Belarus under the universal jurisdiction principle. Universal jurisdiction greenlights investigations into the most serious crimes regardless of where they are perpetrated. German, Swedish and French proceedings on Syria are illustrative examples of this. Protesters may also file individual complaints of abuse to UN bodies under the protocols of the International Covenant on Civil and Political Rights and the Convention on the Elimination of All Forms of Discrimination against Women. The European Court of Human Rights is not an option for the protesters because Belarus is not a member of the Council of Europe.

As the UN mechanisms are yet to be triggered and there has not yet been any talk of universal jurisdiction proceedings, the question of recourse to the ICC remains. But as Belarus is not party to the Rome Statute, the only way to trigger the Court’s jurisdiction is a referral by the UN Security Council (UNSC). Even though it would be vetoed by Russia –  and, almost certainly, China – it could be worth pursuing.

The importance of symbolism

So far, the UNSC has referred to the ICC two situations in non-party states – Sudan and Libya. But for cases that do not end up being referred to the Court, the UNSC debates are as significant for what they manage to agree upon as they are for what they do not. Regarding Belarus, two impeded UNSC accountability initiatives are relevant: on Syria and MH17.

In 2014, Russia and China vetoed the referral of cases of violence in Syria to the ICC. In 2015, Russia was the only country to block the creation by the UNSC of a special tribunal to investigate Malaysian Airlines flight MH17, downed by a Russian missile over war-affected eastern Ukraine. In both cases, the vetoes delayed justice, but they did not prevent it. For Syria, special independent mechanisms to collect evidence for adjudication were developed. Although justice has yet to be done, except in states like Germany, the evidence is ready for any future court. For MH17, a proceeding at a domestic Dutch court became an alternative. Parallel to that, new evidence of Russia’s role in both Syria and the downing of MH17 emerged - contextualising its UNSC vetoes.

Russia’s stakes in the Belarusian elections are probably even higher: the victory of democracy in Belarus will deprive it of one of its closest and most dependent post-Soviet allies.

Even if Russia destroys any chance of Belarusian citizens using the ICC, the attempted ICC-Belarus discussion will not have been in vain. Russia’s opposition to the respective UNSC resolution would be a self-defeating validation of Lukashenka’s atrocities against his own people, unashamedly restated at one of the world’s top diplomatic negotiation tables. Similar to Syria and MH17, the UNSC would reconfirm its self-imposed impotency to defend basic human rights amid political conjuncture. This would bring more attention to the issue and catalyse action through other platforms, including the discussions across UN bodies and the consideration of Belarusians’ individual complaints of abuse, and could lead to tougher sanctions. It could also further make the case for universal jurisdiction proceedings in other countries.      

AI holds the potential to replace humans for tactical tasks in military operations beyond current applications such as navigation assistance. For example, in the US, the Defense Advanced Research Projects Agency (DARPA) recently held the final round of its AlphaDogfight Trials where an algorithm controlling a simulated F-16 fighter was pitted against an Air Force pilot in virtual aerial combat. The algorithm won by 5-0. So what does this mean for the future of military operations?

The agency’s deputy director remarked that these tools are now ‘ready for weapons systems designers to be in the toolbox’. At first glance, the dogfight shows that an AI-enabled air combat would provide tremendous military advantage including the lack of survival instincts inherent to humans, the ability to consistently operate with high acceleration stress beyond the limitations of the human body and high targeting precision.

The outcome of these trials, however, does not mean that this technology is ready for deployment in the battlefield. In fact, an array of considerations must be taken into account prior to their deployment and use – namely the ability to adapt in real-life combat situations, physical limitations and legal compliance.

Testing environment versus real-life applications

First, as with all technologies, the performance of an algorithm in its testing environment is bound to differ from real-life applications such as in the case of cluster munitions. For instance, Google Health developed an algorithm to help with diabetic retinopathy screening. While the algorithm’s accuracy rate in the lab was over 90 per cent, it did not perform well out of the lab because the algorithm was used to high-quality scans in its training, it rejected more than a fifth of the real-life scans which were deemed as being below the quality threshold required. As a result, the process ended up being as time-consuming and costly – if not more so – than traditional screening.

Similarly, virtual environments akin to the AlphaDogfight Trials do not reflect the extent of risks, hazards and unpredictability of real-life combat. In the dogfight exercise, for example, the algorithm had full situational awareness and was repeatedly trained to the rules, parameters and limitations of its operating environment. But, in a real-life dynamic and battlefield, the list of variables is long and will inevitably fluctuate: visibility may be poor, extreme weather could affect operations and the performance of aircraft and the behaviour and actions of adversaries will be unpredictable.

Every single eventuality would need to be programmed in line with the commander’s intent in an ever-changing situation or it would drastically affect the performance of algorithms including in target identification and firing precision.

Hardware limitations

Another consideration relates to the limitations of the hardware that AI systems depend on. Algorithms depend on hardware to operate equipment such as sensors and computer systems – each of which are constrained by physical limitations. These can be targeted by an adversary, for example, through electronic interference to disrupt the functioning of the computer systems which the algorithms are operating from.

Hardware may also be affected involuntarily. For instance, a ‘pilotless’ aircraft controlled by an algorithm can indeed undergo higher accelerations, and thus, higher g-force than the human body can endure. However, the aircraft in itself is also subject to physical limitations such as acceleration limits beyond which parts of the aircraft, such as its sensors, may be severely damaged which in turn affects the algorithm’s performance and, ultimately, mission success. It is critical that these physical limitations are factored into the equation when deploying these machines especially when they so heavily rely on sensors.

Legal compliance

Another major, and perhaps the greatest, consideration relates to the ability to rely on machines for legal compliance. The DARPA dogfight exclusively focused on the algorithm’s ability to successfully control the aircraft and counter the adversary, however, nothing indicates its ability to ensure that strikes remain within the boundaries of the law.

In an armed conflict, the deployment and use of such systems in the battlefield are not exempt from international humanitarian law (IHL) and most notably its customary principles of distinction, proportionality and precautions in attack. It would need to be able to differentiate between civilians, combatants and military objectives, calculate whether its attacks will be proportionate against the set military objective and live collateral damage estimates and take the necessary precautions to ensure the attacks remain within the boundaries of the law – including the ability to abort if necessary. This would also require the machine to have the ability to stay within the rules of engagement for that particular operation.

It is therefore critical to incorporate IHL considerations from the conception and throughout the development and testing phases of algorithms to ensure the machines are sufficiently reliable for legal compliance purposes.

It is also important that developers address the 'black box' issue whereby the algorithm’s calculations are so complex that it is impossible for humans to understand how it came to its results. It is not only necessary to address the algorithm’s opacity to improve the algorithm’s performance over time, it is also key for accountability and investigation purposes in cases of incidents and suspected violations of applicable laws.

Reliability, testing and experimentation

Algorithms are becoming increasingly powerful and there is no doubt that they will confer tremendous advantages to the military. Over-hype, however, must be avoided at the expense of the machine’s reliability on the technical front as well as for legal compliance purposes.

The testing and experimentation phases are key during which developers will have the ability to fine-tune the algorithms. Developers must, therefore, be held accountable for ensuring the reliability of machines by incorporating considerations pertaining to performance and accuracy, hardware limitations as well as legal compliance. This could help prevent incidents in real life that result from overestimating of the capabilities of AI in military operations. 

One of the features of financial markets since early summer has been a decline in the value of the dollar against many currencies, and with it, an especially interesting acceleration in the price of gold. In addition to the usual professional market analysis about the dollar’s movement, this has led to speculation that it might be the beginning of the end of the dollar’s pre-eminence.

Having spent far too much of my professional life as a supposed currency expert, I reiterate something I learnt early on: the foreign exchange business sometimes grants an analyst their 15 minutes of fame, but no expert is a match for the millions who participate in this huge global market all day long. But I spent over 30 years in the financial markets, the vast majority in the hubbub of the forex market. And along the journey, I think I learnt a few tricks of the trade.

At the core of trying to answer questions about the dollar, I learnt a long time ago that there are two entirely separate questions, one of which has two subsections, about the dollar. Firstly, there is the question about the use of the dollar. Will it continue to dominate the world’s financial system as the most widely accepted medium of exchange?

This is not at all the same issue as the dollar’s day-to-day performance against other currencies. This is the second question, which is almost definitely the most pertinent one to what has happened during the summer. How the dollar’s value moves against other currencies is driven by a structural, or a valuation component, and a cyclical component. Each can be analysed separately, and if you were daft enough to devote the years I did to the process, you can combine the two, to have a dynamically adjusted fair value, persuading yourself at least that such an approach combines all available information at any point in time.

In terms of valuation, the most common approach is so-called purchasing power parity, which holds that a currency, in equilibrium, will ultimately reflect the difference in prices between two countries. If inflation is persistently higher in the US than in the eurozone, then the equilibrium value of the dollar will decline over time. I developed my own version of equilibrium currency rates, as it seemed to me in the real world, that the real inflation adjusted value of a currency was not stable, and that it moved over time. This was a reflection of productivity differentials between two countries. I christened it GSDEER: 'the Goldman Sachs Dynamic Equilibrium Real Exchange Rate' when I joined the firm in 1995.

What I learned is that when a currency is more than two standard deviations away from its fair value, it makes a huge amount of sense to watch closely, and when the momentum changes, it is worth going with this trend reversal. The momentum can change based on a change in the forces that have driven the currency away from its fair value, although it can be often easier to detect simply by watching the change in price.

One of the things that has frustrated currency participants over the past decade, with the exception of the Swiss franc and the pound, is that other major currencies have not been that far away from their fair value against the dollar or each other. Even during the dollar’s rise in recent years, including the period up to the summer, while it had clearly become overvalued, with the possible exception of the pound, it hadn’t become more than two standard deviations above its own fair value. In this regard, I have believed that one might be on the lookout for a chance to buy the pound against the dollar, and perhaps against the yen.

The cyclical component of a currency’s movement around its conceptual equilibrium can perhaps best be captured in the nominal interest rate adjusted for inflation expectations. I persuaded myself that the actual spot exchange rate of the dollar on any one day should be close to the adjusted GSDEER, and if it was not, then it would be useful for traders.

The dollar had become more interesting pre-COVID, as it appeared to have risen notably against many currencies, including the euro. And in this regard, the dollar was highly susceptible, and has turned out to be actually vulnerable, to a change in the state of the US and euro area economies. Now that the Federal Reserve has returned to extremely expansive monetary policy, and with it, lower real interest rates, a dollar decline seemed pretty inevitable.

At current prices, on 26 August, the dollar still seems modestly expensive compared to dynamically adjusted fair value. The dollar decline could persist. In the late 1980s and mid 1990s, the dollar fell to very low levels and became very undervalued — this tended to coincide with widespread talk about the dollar’s preeminence, which turned out to be, at least for that era, wrong. And I do share the views of some people who believe, as a result of US policies, conditions are more conducive to a sustained period of dollar weakness. This requires strong ongoing evidence that Europe, China and much of the rest of Asia continue to manage COVID-19 better than the US, and that their cyclical recoveries from the pandemic continue to surprise relative to the US.

Now as for the first question, about the demise of the dollar’s dominance, let me repeat that this is largely a separate issue, but I encourage any reader to be careful about getting sucked into this belief in making an investment or hedging decision.

It is quite possible that the use of the dollar can decline, and start off a systematic decline even when its value is strong. Indeed, in the past couple of years when its value was largely rising, decisions made by US policymakers to use the dollar’s dominance as a way of penalising other countries has resulted in those countries reducing their share of dollar currency reserves. Russia is a particular example, and there is some modest evidence that China is doing likewise.

And the opposite can also be true.

Ultimately, the dollar’s dominance cannot persistently outweigh the relative decline of the US economy in the world, which has been occurring now for 20 years. At some point, it will start to be replaced by something else. Whether that is, the renminbi, the euro, Bitcoin, the return of gold — all are conceivable, and may happen. It might be starting now. But don’t confuse that with where the dollar’s price is heading against other currencies in coming days, weeks, or in 2021.

This article was originally published in The Article.

Whoever occupies the White House after the election, it is evident the emphasis will be on ‘America First’, and that only characteristics and approaches will differ. If Donald Trump is re-elected, his electoral base will support a continuation of isolationist, protectionist policies. If Joe Biden becomes president, he will enjoy some limited popular backing for international re-engagement, but his voters still clearly want him to prioritize domestic issues.

Implications for the foreign policy of the next US administration are evident. America may have a long history of isolationism, but that should not be confused with ignorance of the growing interconnectedness of today’s world. However, Americans are struggling to find a new equilibrium for their country’s role in the world.

Around seven-in-ten hold the view that the United States should take a leading or major role in international affairs, and the same number acknowledge that international events affect their daily life. But Americans remain reticent about global engagement, and half of registered voters believe other countries take unfair advantage of the United States.

This clear contradiction is mirrored in what can be expected from the election victor, with a Joe Biden administration likely to speak for those who want America to lead, while a second Donald Trump administration is expected to continue complaining about US victimization by an ungrateful world.

A majority (57%) of Americans say foreign policy is 'very important' to them as they decide who to vote for in the 2020 election. This may seem like a high priority, but American polls often show many issues are 'very important' to voters. What matters is relative importance and foreign policy pales in comparison with the significance the public accords to the economy (79%) or healthcare (68%). Immigration (52%) and climate change (42%) are of even less relative importance to voters.

Notably, despite the deep partisanship in American politics today, there is no difference between Republican and Democrat voters on the low priority they accord foreign policy. And barely one-third (35%) of the public give top priority to working with allies and international institutions to confront global challenges such as climate change, poverty and disease — in fact only 31% say improving relations with allies should be a top foreign policy priority over the next five years.

However, despite this apparent lack of support for international relations, a rising majority of Americans believe international trade is good for the economy — running contrary to many international assumptions that Americans are inherently protectionist. But this increased interest may not amount to much in reality. Americans also believe trade destroys jobs and lowers wages. Trump is clearly wedded to a protectionist worldview and may continue to try dismantling the World Trade Organization (WTO). Biden is unlikely to initiate any new trade liberalizing negotiations given what would be, at best, a slim Democratic majority in the Senate and anti-trade views held by many unions and blue-collar voters among his constituency. Any political capital he commits to trade is likely to focus on reforming the WTO, but privately his advisers admit they are not optimistic.

In addition, both Biden and Trump face strong public support for ratcheting up pressure on China, although their lines of attack may differ, with Trump likely to double down on tariffs while Biden would work closely with Europe on both trade and human rights issues. More broadly, almost three-quarters (73%) of Americans now express an unfavourable view of China, up 18 points since the last presidential election. One-quarter of Americans classify Beijing as an ‘enemy’ with almost half saying the US should get tougher with China on economic issues, although attitudes do divide along partisan lines, with Republicans generally more critical of Beijing, but Democrats are tougher on human rights.

On immigration, Trump’s policies are out of step with the public. Six-in-ten Americans oppose expanding the border wall with Mexico, 74% support legal status for immigrants illegally brought to the United States as children — including a majority of Republicans (54%) — and as many Americans favour increasing immigration as support decreasing it. But Trump has already promised to double down on limiting immigration if he wins because it is what his Republican electoral base wants and, as with trade, this is one of his long-expressed personal beliefs. If he wins, expect more mass roundups of undocumented people, completion of his border wall and stricter limitations on legal immigration.

In contrast, Biden is likely to loosen constraints on immigration because he believes immigration has been good for the economy and the Democratic party is increasingly dependent on Hispanic and Asian voters, the two fastest growing portions of the population. However, open borders are not a Biden option. The US foreign-born population is at near-record levels and, every time in American history the portion of foreign born has come close to being 14% of the total population — in the 1880s, the 1920s and now — there has been a populist backlash. Democrats cannot risk that again.

On climate change, there is strong evidence the American public is increasingly worried, and likely to support rejoining the Paris Agreement if Biden is elected and increases US commitments to cut carbon emissions. But the public also appears unlikely to punish Trump if, as promised, he leaves that accord, and he is almost certain to continue denying climate science in the interest of the coal, oil, and gas industries.

The public’s concern about global warming does not necessarily translate into support for taking substantive action. There is a huge partisan divide between the number of Democrats (68%) and Republicans (11%) who say climate change is a very important issue in the 2020 election. When pressed on what action they want on climate change, and who they trust to do it, Americans are less likely than Europeans to accept paying higher prices. A carbon tax stands no chance of passing the Senate, thanks to moderate Democrats from fossil-fuel states, and America’s love affair with large, CO²-emitting vehicles shows no signs of ebbing.

The outcome of the 2020 US election will almost certainly not be determined by foreign concerns, although an international crisis — a terrorist incident, a military confrontation with China or North Korea — could impact voting in an unforeseen way. But given the mood of the American electorate, if Trump is re-elected, there will be scant public pressure for a more activist, collaborative US foreign policy, beyond support for a tough line on China, while a win for Biden will give more room for some international initiatives.

But public opinion data is clear. Voters want the next US president to focus first on domestic issues — overcoming the pandemic, digging the country out of a deep economic hole, calming racial tensions, and reversing inequality. The outcome of the election may end America’s recently antagonistic foreign policy and halt the deterioration of its international role. But dramatic American re-engagement appears unlikely as the public’s priorities lie elsewhere.

1. Acknowledge the new reality

A huge number of Belarusians across all levels of society simply no longer recognize Lukashenka as their legitimate president. The unprecedented size and persistence of protests against his regime and the sheer scale of reports of repressive actions, torture, and even murder, mean Belarus will never be the same again.

However, current paralysis in EU policy and the absence of a comprehensive US policy are both serving as a de facto licence for Lukashenka to deepen the political crisis. The sooner policymakers realize this and act with more responsibility and confidence, the quicker the increasing repression can be reversed.

2. Do not recognize Lukashenka as president

If the international community stops recognizing Lukashenka as president, it makes him more toxic to others, including Russia and China, both of which will be reluctant to waste resources on someone who is seen as the main cause of Belarusian instability. Even if Russia still decides to save Lukashenka and financially support him, ignoring Lukashenka decreases the legitimacy of any agreements he signs with the Kremlin on collaboration or integration.

Demanding a re-run of the presidential election should also remain firmly on the agenda as functionaries within Lukashenka's system should know this international pressure is not going away until a truly transparent vote takes place.

3. Be present on the ground

In order to curb repression and establish ties with actors within Belarus, a monitoring group should be organized under the auspices of the UN, the OSCE or other international organizations to establish a presence on the ground, and to stay in the country as long as it is needed, and is possible. Governments and parliaments can send their own missions, while staff from international media and NGOs should be encouraged to report on what is actually happening inside the country.

The bigger the visible presence of the international community is in Belarus, the less brutal Lukashenka’s agencies can be in persecuting protestors, which in turn would then allow more substantial negotiations to take place between the democratic movement and Lukashenka.

4. Announce a package of economic support for a democratic Belarus

The Belarusian economy was already in bad shape before the election, but the situation is going to get much worse. The only way out is support from the international community with a ‘Marshall Plan for a democratic Belarus’. States and international financial institutions should declare they will provide significant financial assistance through grants or low-interest loans, but only if there is democratic change first.

It is essential to make this economic package conditional on democratic reform, but also that it will have no geopolitical strings attached. If a democratically-elected government decides it wants to improve relations with Russia, it should still be able to count on an assistance package.

This would send a strong signal to economic reformers who remain inside Lukashenka's system, giving them a genuine choice between a functioning Belarusian economy or sticking with Lukashenka, whose leadership is seen by many as to be responsible for ruining the country’s economy.

5. Introduce targeted political and economic sanctions

The Lukashenka regime deserves tough sanctions internationally, but so far only selective visa restrictions or account freezes have been imposed, which have little to no effect on what is actually happening on the ground. Visa sanction lists need to be expanded but, more importantly, there should be increased economic pressure on the regime. Companies which are the most important to Lukashenka's business interests should be identified and targeted with sanctions, all their trading activity halted, and all their accounts abroad frozen.

Governments should also persuade their own country’s large companies to reconsider working with Belarusian producers. It is shameful that international corporations continue to advertise in media controlled by Lukashenka and appear to be ignoring the reports of human rights violations at Belarusian companies they do business with.

Moreover, there should be a deadline set to halt all repression, or broader economic sanctions will be imposed. This would send a strong message to Lukashenka and also his entourage, many of whom would then become more convinced he has to go.

6. Support NGOs to investigate allegations of torture

There are few legal mechanisms to prosecute those thought to be involved in election fraud and acts of brutality. Nevertheless, all reports of torture and falsifications should be properly documented by human rights defenders, including identifying those alleged to have taken part. Gathering evidence now prepares the ground for investigations, targeted sanctions, and leverage on law enforcement officials in the future.

But, given that such an investigation is not possible in Belarus right now, international human rights activists should be enabled to start the process outside the country with support from Belarusian NGOs.

7. Support known victims of the regime

Even with an unprecedented campaign of solidarity among Belarusians, many people need support, especially those alleged to have suffered torture. Some media outlets claim to have lost a significant amount of revenue because advertisers were forced to pull out, and journalists arrested. Human rights defenders need funds to keep organizations running in the heat of this crackdown.

Supporting all these people and organizations will cost tens of millions of euros, but it would significantly ease the huge financial burden facing those who have opposed the regime.

Does the UK have a foreign policy? The failures in Iraq and Afghanistan curbed our Blairite appetite for intervention. Then the Brexit referendum and the advent of Donald Trump as US president upended the European and Atlantic pillars of our strategy. The UK has been outflanked by Russian opportunism, and on China it is confused about the balance of security risk and economic opportunity. Meanwhile, the world is accelerating into a dangerous, bipolar era of geopolitics.

The claim that leaving the EU would open a highway to British global influence was always hollow. Since 2016, the UK’s influence has declined; our forces are barely present in international theatres of conflict and, as recent days have again shown, the Brexit soap opera undermines our diplomacy and soft power. So far, there are only glimmers of a new direction.

On issues such as Iran, climate change and excluding Russia from the G7, the UK has stayed close to EU positions. Elsewhere, it has taken a tougher stance on China and Hong Kong that is aligned more closely with the US and the Five Eyes intelligence community, which includes Australia, Canada and New Zealand. There is also a renewed focus on human rights.

However, this does not add up to a coherent strategy. Getting it to do so is the job of this autumn’s 'integrated review' of security, defence, development and foreign policy. The timing is driven by the government’s comprehensive spending review, which — bizarrely — means they will reach conclusions without knowing what sort of deal, if any, we will strike with the EU, or who will be the next US president.

The challenge is to define a credible and distinctive role for a freestanding medium power with strong traditions of diplomacy, defence, intelligence, trade and aid. Not everything has changed; although unmoored from the EU, the UK remains a significant player in Nato, the UN Security Council and other international organisations. 

The review needs to start by deciding what matters most. A sensible list would include avoiding conflict between the US and China, maintaining global prosperity, preventing nuclear proliferation, addressing environmental damage and climate change, and shoring up a multilateral system of international rules. There will always be urgent problems, and it matters how we respond to them. But a foreign policy should be geared to enduring aims.

On each priority, the review must examine how the UK, outside the EU, can make a difference. Sometimes it may find a specific national role, such as convening next year’s COP26 climate conference. Nine times out of 10, however, the route to our national goals will lie, as before, through leveraging relationships with others.

Three relationships matter most. We need a plan for the US, whoever wins the election. If Boris Johnson is the European leader closest to Donald Trump, how will the British prime minister turn that to his advantage if Trump wins? On the other hand, a Joe Biden victory would better serve our wider interest in a reinvigorated Euro-Atlantic community — although, under this government, that would also weaken our hand in Washington compared with Berlin and Paris. What is the plan to counter that?

Second, we need clear thinking on China. In the new bipolar geopolitics, the UK should stand firmly with the US — although not to the extent of allowing Washington to dictate our policy, or of cutting necessary and useful links with China. We need to decide on a strategic objective. Are we preparing for lasting great-power confrontation or even conflict; or are we working for a more sophisticated global equilibrium? In either case, who will be our best international partners?

Evidently, this requires a constructive relationship with Europe, with which the UK has the most obvious shared interests. Bilateral relationships will be valuable, as will the E3 group of the UK, France and Germany. But our reluctance to negotiate a foreign policy relationship with the EU collectively is an error.

When the brainy Whitehall strategists have put down their pens, the review will then, as always, descend into a hard-nosed haggle over money. There are already large holes in Ministry of Defence procurement budgets; the COVID-induced recession will make things worse. With new priorities to fund, such as cybersecurity, the argument will be less about spending more than gouging out savings to redistribute.

Finally, the review must look at delivery. As Downing Street has disempowered ministries, Whitehall’s foreign policy machinery has become over-centralized. Trade and economic considerations should have more weight. Delivery of the new strategy should also be led by a reformed and renamed Department for International Affairs that has leadership on foreign, development and trade policy, oversees external intelligence and works closely with the Ministry of Defence.

Only with such clarity on priorities, relationships and resources can we craft the coherent foreign policy post-Brexit Britain needs. The task will be easier if the UK and EU reach a deal in December.

This article was originally published in the Financial Times.

Although there is a long road ahead to achieve sustainable peace and formidable challenges remain, the hope is Sudan can turn the page on decades of war that has left hundreds of thousands dead and millions displaced, particularly in Darfur and the Two Areas (South Kordofan and Blue Nile).

The peace agreement, between Sudan’s transitional government and the Sudan Revolutionary Front (SRF), a broad alliance of armed and other movements, and Minni Minawi’s Sudan Liberation Movement, is not yet comprehensive as it did not include two other important armed movements.

Expected to be formally signed in early October, the deal has been hailed as a ’historic achievement’ by the UN secretary-general, and the international community also commended the government of South Sudan for its positive role as mediator and urged hold-out groups to join the peace process. Much does depend on delivering on the agreement, and the experience of implementing past peace accords in Sudan has been dismal, particularly when it comes to bringing tangible benefits to people on the ground.

What potentially makes the Juba agreement different is that Sudan’s civilian-led transitional government aspires to deliver peace, justice and democracy in line with the goals of the revolution; that the agreement was negotiated between the Sudanese themselves, with a light touch from the South Sudanese mediation and low-key logistical and technical support from the international community; and that much of the negotiations were conducted between former comrades, in marked contrast to the confrontational atmosphere that prevailed during the Bashir era.

As Prime Minister Abdalla Hamdok put it: ’This is a Sudanese peace, made with our own hands and by our own efforts’ and: ’This is not a paper agreement, but is a living organism that needs care, attention and political will from all of us’.

Achievements of the agreement

The result of almost one year’s hard work in Juba, the agreement is comprehensive in scope and addresses the fundamental issues of Sudan’s crises in Darfur, the Two Areas and other marginalized regions, albeit in a mixture of regional and national protocols. It goes a long way to realizing the vision of a democratic ‘New Sudan’ based on respect for the diversity of the Sudanese people and equal citizenship without religious, ethnic, cultural or gender discrimination.

There is a focus on the concerns of historically marginalized populations in Sudan’s conflict zones and disadvantaged areas, and it addresses root causes of conflict, such as issues of identity, marginalization, the relationship between religion and state, governance, resource-sharing, land issues, social justice, and equality at the national level.

The deal also looks to resolve the consequences of conflict, such as humanitarian relief, the safe and voluntary return of IDPs and refugees to their original lands and compensation, eviction of illegal settlers and the development and reconstruction of the conflict-affected areas. It provides for significant devolution of power and resources to the regions, including autonomy for the Two Areas and restoration of a single Darfur region. On transitional justice, the government has committed to cooperate fully with the International Criminal Court (ICC) and ensure Bashir and others subject to arrest warrants will ‘appear before’ the ICC.

This deal will change the face of the transitional government by bringing marginalized forces to the centre of the political process. The transitional period will extend to 2023, with the armed movements having three seats in the (currently 11-member) Sovereign Council and 25% of seats in the Cabinet and soon-to-be-formed Legislative Assembly.

The power-sharing provisions have been criticized as disproportionate to the size of the movements’ political constituencies and military presence inside Sudan. But the movements argue significant representation in the government is necessary to support implementation and that their arrival in Khartoum will help to strengthen the transition to democracy.

Establishing a single, national professional army, reflective of the diversity of Sudan and with a new military doctrine opens the way for much-needed comprehensive security sector reform. During the transition, this will include the creation of a 12,000 strong joint force between government security forces and the armed movements to help protect civilians in Darfur. Importantly, mechanisms allowing for civilian input on security reforms are also established.

The deal also guarantees religious freedom and the separation of religion from politics. This ensures religion will not be exploited by state institutions as it was during the Bashir-era, provides for the constitution to be based on equal citizenship, and for the establishment of a National Commission for Religious Freedom to protect the rights of Christians and other minorities. In the Two Areas, the autonomous government will have special legislative powers to pass laws based on the secular 1973 Constitution.

Increasing inclusivity

Key to achieving inclusive and sustainable peace is ensuring popular ownership and finding ways to engage civil society stakeholders and marginalized communities such as nomads in dialogue, reconciliation and social peace initiatives. The negotiations were mainly a top-down elitist process. Although the UN brought IDPs, tribal leaders and women’s groups to Juba for short periods, there was limited participation by civil society. However, the agreement provides for a wider range of stakeholders to feed into a comprehensive peace through reconciliation and transitional justice mechanisms, follow-on conferences and an inclusive National Constitutional Conference.

Achieving a comprehensive peace will also mean bringing other armed movements on board, particularly those led by Abdel Aziz Al Hilu and Abdel Wahid Al Nur, both of whom hold significant territory, forces and support (in the Two Areas and Darfur respectively). Negotiations in Juba with Abdel Aziz had stalled over his demands for a secular state or, failing that, the right to self-determination, but he has now reached a preliminary agreement with Prime Minister Hamdok on a way forward.

Other challenges of implementing peace

Turning the peace agreement into reality on the ground will face many other challenges given the fragility of a civilian-military transitional government, distrust, and competition between the signatory movements and some political parties, as well as increasing insecurity in many parts of the country caused by armed militias, inter-tribal violence, the proliferation of weapons, and sabotage by elements of the former regime. There is also likely to be resistance from groups such as illegal settlers who see their interests being threatened.

With its economy in meltdown because of economic mismanagement by the Bashir regime, COVID-19, and unprecedented floods, finding resources to implement the peace deal is far beyond the means of Sudan’s cash-strapped government. Implementation therefore requires sustained and generous support from its regional and international partners, including the country’s urgent removal from the US State Sponsors of Terrorism list, which is preventing debt relief, access to concessionary loans and large-scale foreign investment. With donor budgets under heavy pressure, raising money will be hard, but by continuing to support a nascent democracy in a strategically important but unstable region, Sudan’s allies will be safeguarding their long-term interests.

If properly implemented, the Juba peace agreement is a major first step towards creating a ‘New Sudan’ based on peace, equal citizenship and social justice. Key tests of whether Sudan can finally turn the page are whether the signatory movements and other revolutionary forces can unite to deliver the dividends of peace for the victims of Sudan’s conflicts, and embrace inclusion rather than tribalism and narrow political affiliation; whether the remaining armed movements are ready to start serious negotiations for a comprehensive peace; and whether Sudan now receives the support and attention it deserves from the international community. Surely Sudan has already come too far for this historic opportunity to be lost.

The G20 summit in November was to be a moment when the world focused its attention on Saudi Arabia. As the leaders of the world's 20 largest economies came together for the first time in an Arab capital and presided over the world’s greatest challenges and opportunities, King Salman would have taken centre stage with his son and crown prince Mohammed bin Salman not far behind in the spotlight.

However this will now be a virtual summit, and that is probably a blessing in disguise for the kingdom and its leadership which has not enjoyed a good year. It shares responsibility for crashing the price of oil, which, in conjunction with COVID-19, has brought the global economy to its knees. And it continues to be mired in the Yemen conflict, whereas its ally the United Arab Emirates (UAE) has, by and large, managed to extract itself while also seeking to rescue its reputation by signing a ‘peace deal’ with Israel.

More recently, it has been forced to push back plans to host the next instalment of ‘Davos in Desert’ until 2021 and the crown prince’s flagship charity Misk is currently under review. The Public Investment Fund (PIF) made a wholly unsuccessful bid to secure a major stake in Newcastle United Football Club which brought an unfavourable ruling at the World Trade Organization (WTO) and a heap of damaging media attention.

Squandered opportunity

Nothing washes away the stain of Jamal Khashoggi’s murder or the continuing imprisonment of women and men charged with being traitors. But in many ways, leading the G20 offered the Saudi leadership, especially Mohammed bin Salman, a chance to press reset and atone for some of the excesses of his more controversial policies, such as the war in Yemen and blockade of Qatar. But he appears to have squandered the opportunity so far and there are no signs that is about to change.

Hosting the summit in Riyadh would have given Mohammed bin Salman an opportunity to try and recapture the heady days of 2018, when many of the world's leaders and even the media still viewed him as a force for good. He would have had a captive audience and, instead of staying away from Western capitals which he has chosen to do recently, he could have been feted by world leaders on his home turf. Moreover, the presidency agenda — empowering people, safeguarding the planet, and shaping new frontiers — would have lent itself to meaningful engagement on key policy issues.

Although many analysts and commentators quite rightly argue that Riyadh’s focus on empowerment and safeguarding the planet is widely hypocritical given the kingdom has lurched further towards quashing any signs of opposition and remains highly dependent upon hydrocarbons, at least the ambitious goals of Vision 2030 ought to align with the G20 agenda. The goals of Vision 2030 remain aspirational and are far from ever being met, but there is synchronicity between the two agendas. In fact, the overview of Saudi Arabia’s G20 Presidency documentation states ‘the G20 agenda has a strong echo in the daily lives of the people in the Kingdom’.

Saudi Arabia really needs to empower its people and capitalize upon its youth dividend but that requires, as so many have argued persuasively, long-term investment in education, training, and skills acquisition, and will not be achieved overnight. It needs strategic thinking, capacity-building, commitment, scope for course correction, and patience. There are no quick wins, no shortcuts.

Safeguarding the planet is common to one and all but breaking a dependency upon hydrocarbons, diversifying its economy, and mitigating against the growing impact of climate change are all pressing issues Saudi Arabia needs to address. A failure to achieve these goals in a time-sensitive fashion poses a threat to the well-being of the kingdom and, in order to do so, it must empower its people and use technology wisely to advance the process. Saudi Arabia should be at the front of the pack, but is being surpassed by its neighbours and is in danger of being left way behind.

With its wealth and youthful population, the kingdom can be at the cutting edge of shaping new frontiers. It can deploy its substantive funds to support its own innovators and — to borrow the jargon — create an ecosystem that not only offers Saudis an environment fostering creativity, but also one that draws talent into the kingdom.

This does not mean investing in ‘white elephant’ projects that fail to spark the imagination of Saudis, or following the crowd to buy football clubs without rhyme or reason. It means gearing up to address everyday issues that preoccupy minds of Saudis, such as employment, housing, healthcare, and the well-being of family members. It is notable how the excitement of ‘bread and circus’ issues has abated and the focus moved once again towards family, faith and finance.

The Saudi presidency of the G20 is in danger of passing by with a whimper and the November summit may now be unremarkable. This does not mean the hard work of the continuously active engagement groups will go unnoticed or to waste, but it does mean the photo-opportunity will be passed up and the joint statement garner less interest than usual.

While it may feel like a lost opportunity for the kingdom and, in particular, Mohammed bin Salman, they should both breathe a sigh of relief. In many ways, they will be let off the hook by avoiding the direct scrutiny of the world’s media and human rights organizations. However, the crown prince could still seize the initiative given the spotlight will be on him, albeit from afar, and take bold steps towards resolving the thorny issues that have come to mar his pathway to power.

The emergence of a multipolar global economy in which the US is no longer the main engine of growth has boosted the role of economic diplomacy, the setting of foreign economic policy. While the EU remains the world’s biggest economic bloc and the US is still an economic powerhouse, it is Asia – China in particular – which has created hundreds of millions of new middle-class consumers, helping to drive global economic growth.

This shift has ignited an era of competition between the US and China and, by implication, a debate about the merits of different political and legal systems. The difficulty for the rest of the world is how best to navigate this highly polarized climate – in recent history, only the Cold War comes close to having matched the adversarial dynamics of such a divided international community.

In conducting economic diplomacy, governments should consider their economic strengths, the importance of transparency, and how best to operate in a fragmented international system.

First, the setting of trade and investment policy should take into account developments in the global economy. One trend worth noting is the rising importance of services – in particular digital services – in international trade. The expanding cross-border trade in intangibles such as business services and data means the negotiation, definition and enforcement of standards to regulate these are of growing importance for the global economy, and for policymakers in many countries.

In contrast, negotiations around merchandise trade are likely to take a somewhat lower profile. Under the World Trade Organization (WTO), tariffs on manufactured goods have dropped significantly in any case – though there is still scope to lower them. Contemporary diplomacy, as well as disputes, around the lowering or raising of barriers to international trade will increasingly concern non-tariff measures applicable to services rather than those, such as tariffs, that traditionally apply to goods.

For service-based economies, it is vital free-trade agreements (FTAs) encompass regulations and standards for intangibles. But this is difficult in a multipolar global economy where the US, China and the EU all have different legal and regulatory systems, and raises the prospect of a fragmented global trading system divided into blocs of countries adhering to different standards.

A pluralistic or mini-multilateral approach to trade such as the stalled Trade in Services Agreement (TiSA) could help resolve elements of this division. TiSA was launched in 2013 by a group of advanced economies, not the entirety of the WTO, to further opening up global services trade. However, talks have been on hold since 2016 and, in the current climate, it is near impossible to conclude negotiations when the major economies do not come to the table and instead promote their own standards with their closest trading partners.

Second, policymakers should consider that, in an era of heightened trade tensions, any framework for economic diplomacy needs to be transparent if it is to be trusted and credible. Such a framework could centre on commercial openness and consistency with a country’s foreign and intelligence policy aims. For example, clearly spelling out how a country reviews prospective foreign investment and applying this consistently would demonstrate that all projects are treated equally without singling out any individual country. This would be an improvement over an ad hoc and less transparent approach .

A major challenge in creating a ‘principle-based’ economic diplomacy framework of this kind is reconciling competing policy aims. To this end, several key questions need answering. Should trade agreements encompass non-economic elements, such as foreign policy aims? Do concerns over national security mean that trade and investment agreements should favour allies? Could such a framework assess a trading or investment partner in terms of national security as well as potential economic benefit?

A country should also re-think how to undertake a wider international role when embarking on economic diplomacy. The inability of the major powers to set new global rules has had a detrimental impact on an international system under significant strain. The stalling of multilateral trade talks and urgency of international coordinated action on global public goods, such as health and the environment, shows there is a pressing need for a new approach to international relations.

Economic diplomacy could, and should, bolster the rules-based multilateral system. The challenge is engaging the major powers without whom widespread adoption of global policies and standards is less likely. Yet the chances of wider adoption might actually be better if a proposal does not come from either the US or China. This opens up the opportunity for other countries to be ‘honest brokers’ and potentially improve their own international standing.

In an era of increasing tension between great powers, economic diplomacy requires re-tooling. It should consider not just economic considerations, but also broader foreign policy aims, greater transparency, and a pluralistic approach to global rules to strengthen the multilateral system.