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611. The European Union renews its offensive against US technology firms

Author:
Gary Clyde Hufbauer and Megan Hogan
Publication Date:
02-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The European Union's proposed Digital Markets Act (DMA) contemplates extensive regulation of "gatekeeper" digital platforms—firms that perform a "core platform service" in the European Union (defined as online intermediation, online search, social networking, video sharing, electronic communication, cloud services, or online advertising), have a significant impact on the EU internal market, serve as an important gateway between business users and end-users, and enjoy an entrenched and durable position. Although at least one European firm could qualify as a gatekeeper, Hufbauer and Hogan say, the DMA discriminates against American technology firms by singling them out for the label of "gatekeepers." The European Commission’s proposed DMA targets both US tech giants such as Google, Amazon, Facebook, Apple, and Microsoft and smaller (albeit huge) US tech firms such as Airbnb and PayPal. The authors say the EU goal is to confer competitive advantage on European digital firms, breaching the EU commitment to national treatment of foreign firms, violating their intellectual property rights, and imposing high expenses on the "gatekeepers." At the same time, France is planning to enact its own steep barriers against US and other foreign cloud services.
Topic:
Markets, Science and Technology, European Union, Economy, and Digital Policy
Political Geography:
Europe and United States of America

612. The case for a cautiously optimistic outlook for US inflation

Author:
David Reifschneider and David Wilcox
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The Federal Reserve and most other analysts failed to anticipate the surge in inflation in 2021. Considerable debate now surrounds the question of whether the Fed is too sanguine in anticipating that too-high inflation will mostly take care of itself over the next few years, even as the unemployment rate remains low and monetary policy remains accommodative. This Policy Brief concludes that although the Federal Open Market Committee (FOMC) was too optimistic in the projections it issued in December 2021, the broad contour of its baseline inflation outlook for 2022 and beyond remains sensible. The authors find the 2021 surge in inflation resulted mainly from COVID-19-related sectoral developments rather than the classic situation of aggregate demand outstripping the overall economy's long-run productive potential. The statistical analysis in this Policy Brief was conducted before Russia invaded Ukraine. As a result of the war, the inflation situation will probably get worse before it gets better, and could do so in dramatic manner if Russian energy exports are banned altogether. Nonetheless, if the key considerations identified in this Policy Brief remain in place, and if monetary policymakers respond to evolving circumstances in a sensible manner, the inflation picture should look considerably better in the next one to three years.
Topic:
Federal Reserve, Economy, and Inflation
Political Geography:
North America and United States of America

613. For inflation relief, the United States should look to trade liberalization

Author:
Gary Clyde Hufbauer, Megan Hogan, and Yilin Wang
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
With US inflation running at 40-year high rates, the Federal Reserve is signaling more interest rate hikes in 2022 and 2023. President Joseph R. Biden Jr. has also vowed to act against what he calls anticompetitive behavior by corporations. But policymakers are overlooking one set of actions that could make a meaningful contribution to taming inflation: trade liberalization. The data cited in this Policy Brief indicate that a feasible package of liberalization could deliver a one-time reduction in consumer price index (CPI) inflation of around 1.3 percentage points, amounting to $797 per US household, about half the size of pandemic relief in 2021. As a bonus, the embrace of trade liberalization would curb inflationary expectations taking hold in American firms now protected by trade barriers from foreign competition.
Topic:
Economy, Inflation, and Trade Liberalization
Political Geography:
North America and United States of America

614. Fiscal support and monetary vigilance: Economic policy implications of the Russia-Ukraine war for the European Union

Author:
Olivier Blanchard and Jean Pisani-Ferry
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The economic shock from the war in Ukraine is forcing Europe to face difficult policy choices, according to Olivier Blanchard and Jean Pisani-Ferry. Governments must decide how best to soften the blow of higher energy and food prices, and how much to rely on debt finance. The European Central Bank must decide how to balance the fight against inflation with the need to sustain aggregate demand, in the face of decreases in real income. The authors analyze the impact of the war on the European economy, discuss the pros and cons of policy options, and call for coherence in balancing sanctions, fiscal measures, and monetary policy. They argue for the use of transfers rather than across-the-board subsidies and point to the room for debt finance. They show the potential role of tripartite wage agreement and also argue that monetary policy can remain on its current trajectory but be ready to adjust.
Topic:
War, European Union, Economy, and Fiscal Policy
Political Geography:
Russia, Europe, and Ukraine

615. Climate-Resilient Migrant-Friendly Towns: A Conceptual Framework

Author:
Mizan R. Khan, Madiha Chowdhury, and Saleemul Huq
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
International Centre for Climate Change and Development (ICCCAD)
Abstract:
For the last few years, ever increasing climate change impacts resulting from the new normal of extreme events are becoming a rude fact of life around the world. The findings of the Working Group-1 of the Intergovernmental Panel on Climate Change (IPCC) published in August 2021 again provides mortal warnings about the impending climate crisis. The impacts are particularly stark in South Asia, the most populous region on Earth. Within South Asia, Bangladesh stands as the most vulnerable: 4.1 million people were displaced due to climate disasters in 2019 (2.5% of the population), with 13.3 million people likely to face displacement by climate change by 2050, and 18% of its coastland will remain inundated by 2080 (Rigaud, et al. 2018). The Paris Agreement goal of keeping the temperature rise at 1.5°C or well below 2°C compared to pre-industrial times cannot be achieved, given the lack of ambitious mitigation, when we already live with 1.1°C higher temperature. As a result, the number of people estimated to be displaced by slow-onset events will stand at ~22.5 million by 2030 and ~34.4 million by 2050 in South Asia including Bangladesh (Singh, et. al. 2020). Where will all these people go? A land area of 147,570 km2 is inhabited by 165 million people. So, Bangladesh has no space to retreat. Estimates show that about half a million people displaced by river-bank erosion move to Dhaka city alone, crowding the slums and mounting pressure on limited city services. In such a situation, one option to address displacements in a world of increasing urbanization including in Bangladesh could be the transformation of smaller towns to be climate resilient and migrant-friendly (CRMFT). This option appears practicable for populous countries like Bangladesh, having little or no space for retreat from vulnerable hotspots. In this context, several queries can be raised: What is the rationale of the model of CRMFT? What does make a town climate resilient and migrant-friendly? What are its elements and dimensions? While responding to these queries, this policy brief attempts to design a framework for CRMFT, though it may differ across physical and socio-economic boundaries.
Topic:
Climate Change, Migration, Displacement, and Resilience
Political Geography:
Bangladesh and South Asia

616. What does the IPCC Working Group II say about Bangladesh in its Sixth Assessment Report?

Author:
Saleemul Huq, Md. Bodrud-Doza, Khandker Tarin Tahsin, and Mizan R. Khan
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
International Centre for Climate Change and Development (ICCCAD)
Abstract:
In March and April 2017 Bangladesh experienced drastic floods which affected 220,000 ha of nearly ready to be harvested summer paddy crop and resulted in almost a 30% year on year increase in paddy prices. An attribution study of those pre-monsoon extreme rainfall events in Bangladesh concluded that anthropogenic climate change doubled the likelihood of the extreme rainfall events resulting in such floods. Forecast-based financing, which automatically triggers funds when threshold forecasts are reached for an extreme event, used in Bangladesh prior to a 2017 flood event, allowed low-income, flood-prone communities to access better quality food in the short term without accruing debt.
Topic:
Climate Change, Natural Disasters, Food Security, Flood, and Intergovernmental Panel on Climate Change (IPCC)
Political Geography:
Bangladesh and South Asia

617. What do we know about cyber operations during militarized crises?

Author:
Michael Fischerkeller
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The Department of Defense (DoD) will soon kick off the drafting of its cyber strategy and cyber posture review to align US cyber capabilities and operating concepts with the foreign policy objectives of the Joseph Biden-Kamala Harris administration. Given that the administration describes China as the “pacing threat,” debates over the best use of cyber operations and campaigns will likely be framed by US-China interaction in day-to-day competition, and by a potential militarized crisis and war over the status of Taiwan. This essay focuses on how cyber operations employed during militarized crises are likely to impact escalation management. Policymakers may be attracted to the idea that cyber operations could serve as de-escalatory offramps in a crisis. Such expectations should be tempered, if not completely set aside, for two reasons. First, there is no experience with cyber operations employed during a militarized crisis between two nuclear-armed peers. Absent direct experience, all one can rely on is academic research. Yet, secondly, deductive and empirical academic research provides no basis for confidence that cyber operations are either de-escalatory or non-escalatory in the context of militarized crises.
Topic:
Foreign Policy, Cybersecurity, Crisis Management, and Militarization
Political Geography:
China, Taiwan, Asia, North America, and United States of America

618. THE DAY AFTER: Anticipating trouble in the event of a US withdrawal from Syria

Author:
Jomana Qaddour
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
With approximately nine hundred troops in northeastern and southeastern Syria, the United States ostensibly aims to prevent the reemergence of the Islamic State group (IS). The withdrawal of US forces from Afghanistan, initiated by the Trump administration and completed by the Biden administration, was followed by the rapid collapse of the pro-Western government of Afghanistan and its replacement by the Taliban. This has led to questions about what will happen if and when US forces withdraw from northeastern Syria. A new issue brief by Atlantic Council’s Senior Fellow Jomana Qaddour examines the social, political, and economic implications and the challenges to US presence in Syria. While the US military presence remains limited in number, this report also underscores how aggregate US influence is much more potent than a force number of nine hundred suggests. US troop presence has enhanced counterterrorism operations, obstructed IS and Iranian smuggling routes, and facilitated humanitarian aid and economic benefits to a population in Syria that would be languishing under even more dire conditions. It can be argued that it has also limited local violence and halted a resurgence of public IS activities. According to the most recent Syria policy review, US presence is limited to the goal of counterterrorism operations, which implies that it is a conditions-based, not calendar-based deployment. Those conditions should include local Syrian forces that can reasonably deny IS a safe haven from which to plot terrorist attacks against the United States and its allies. It is well known that the Assad regime is not likely to provide the necessary capability to assure the United States and its allies that it can prevent IS’s return. In reality, there is little room to positively read the reassertion of Syrian government control over northeastern Syria; and withdrawal from Syria would be a serious gamble for US national security concerns in Syria and the region.
Topic:
Foreign Policy, Armed Forces, Military Affairs, Islamic State, and Syrian War
Political Geography:
Middle East, Syria, and United States of America

619. The Rising National Security Threats from Climate Change in the Mediterranean Region

Author:
Katerina Sokou
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
Climate change hazards, from rising sea levels to forest fires, are set to asymmetrically impact the Mediterranean’s coastal ecosystems. In addition to increased natural disasters, climate change also will exacerbate the region’s economic vulnerabilities stemming from resource scarcity, heat stress, and impacts on tourism. With increased stress on populations in the region, climate pressures have the potential to indirectly exacerbate violent conflict. The potential for future threats from climate change necessitates that nations consider not only national climate plans, but strategies to mitigate global pressures on supply chains, food systems, and economic interdependencies to manage cross-border risks. The United Nations Environment Programme’s Mediterranean Action Plan serves as a starting point by assessing these risks. Building on it, the European Union can direct development assistance towards strengthening countries’ abilities to adapt, further strengthened by transatlantic cooperation. In anticipation of the security ramifications of climate change, NATO should set climate adaptation as a priority. The transition to renewable energy will result in both economic and geopolitical benefits through the creation of jobs and development of advanced technologies. Tourism, which makes up a fifth of Greece’s GDP, is likely to be adversely impacted by higher temperatures and natural disasters. This could generate additional risk for Greece’s financial credibility. The EU should consider this as a threat to the institution as a whole, with Greece and Cyprus the member states most vulnerable to climate change. Fortunately, Greece has a solid foundation from which to build up its climate resiliency, as strategies to this end are part of the Greece 2.0 plan and the country is already one of the top producers of wind and solar energy globally. The Mediterranean should not be making these efforts alone as economic and geopolitical stressors cause cross-border instability, a strong motivator for the region and partners to deliberately address climate adaptation in tandem.
Topic:
Climate Change, Energy Policy, National Security, Natural Disasters, and European Union
Political Geography:
Mediterranean

620. Afghanistan: Where US-Iranian interests may yet intersect

Author:
Borzou Daragahi
Publication Date:
05-2022
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
A new issue brief, Afghanistan: Where US-Iranian Interests May Yet Intersect, authored by Atlantic Council senior fellow Borzou Daragahi delves into the Taliban takeover of Afghanistan and how the swift collapse of the US-backed government in Kabul last summer not only shocked the United States and its allies in the 20-year struggle in that country, but also Afghanistan’s influential neighbor, Iran. As refugees continue to stream into Iran, the government in Tehran has still not recognized the Taliban regime and remains worried about a further deterioration in Afghanistan’s economy and social cohesion, as well as the growing presence of Sunni Jihadi militants. As Iran-Afghan relations evolve, will US concerns about Afghanistan’s fragile state provide a basis for tacit cooperation between Washington and Tehran, similar to what existed when the Taliban was last in power?
Topic:
Government, Taliban, Geopolitics, Economy, and Strategic Interests
Political Geography:
Afghanistan, Iran, South Asia, and United States of America