Content Type: Policy Brief / Publication Year: within 10 Years and within 3 Years

1. How Sweden Can Use its EU Presidency to Build the Civilian Security Dimension of the Eastern Partnership

Author:: Michal Baranowski, Mikołaj Bronert, Maximilian Kaminski, and Elene Kintsurashvili
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: German Marshall Fund of the United States (GMFUS)
Abstract:: The EU’s Eastern Partnership (EaP) lacks a security dimension and this is an urgent reform need. In particular, the EU should become the leading provider of civilian security support in the EaP countries, particularly Ukraine. But significant weaknesses in this policy field inhibit its capability to do so. Sweden’s long-term focus on the EaP, its experience in augmenting domestic cyber and hybrid resilience as well as in placing the civilian aspect at the heart of its national security, and it its leading contribution to the EU’s Common Security and Defense Policy (CSDP) missions put it in a unique position to be a champion of the security dimension of the EaP during its presidency of the Council of the EU. Sweden can do so by pushing for: a EU-NATO memorandum of understanding on the EaP; the provision of a rapid financing mechanism to assist EaP countries in nonmilitary defense; a more coordinated training, planning, and implementing process for CSDP missions between EU actors and the EaP countries; a more targeted approach towards EaP countries; and prioritization of deepening of cooperation with EaP countries in the domain of hybrid threats.
Topic:: Security, Foreign Policy, NATO, European Union, and Partnerships
Political Geography:: Europe, Eastern Europe, Sweden, and Central Europe

2. Russia’s Yes Vote on Syria Aid Will Come With a Price

Author:: Anna Borshchevskaya and Andrew J. Tabler
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: The Washington Institute for Near East Policy
Abstract:: Moscow’s willingness to approve another UN extension has more to do with advancing normalization between Turkey and the Assad regime than helping Syrian civilians, who will remain hostage to Russian demands if nothing is done before the next vote this summer. On January 9, the UN Security Council unanimously approved Resolution 2672 extending the provision of cross-border humanitarian aid into northwest Syria for another six months. In the immediate term, the vote is good news for Syrian civilians suffering through one of their worst energy crises since the beginning of the civil war in 2011. But the main problem persists—absent an alternative mechanism outside the Security Council, cross-border aid will remain bound to Russia’s increasing political and security demands in Syria, which are ultimately tied to the situation in Ukraine as well. Many were surprised by Moscow’s decision to approve the new resolution. Over the years, Russia has repeatedly threatened to veto previous resolutions, and the West has largely given in to its demands by steadily diluting the aid mechanism. From that perspective, this month’s vote appeared to be a welcome sign of the Biden administration’s willingness to stand its ground on Syria despite dealing with a complex Russian challenge in Ukraine. Moscow did not even resort to its frequent tactic of abstaining from the final vote in order to signal its displeasure with the mechanism.
Topic:: Humanitarian Aid, UN Security Council, and Strategic Competition
Political Geography:: Russia, Turkey, Middle East, and Syria

3. Iran’s New Budget Perpetuates Economic Challenges

Author:: Henry Rome
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: The Washington Institute for Near East Policy
Abstract:: The president is proposing de facto cuts to salaries and subsidies as well as more money for the military, while avoiding the tough reforms Iran’s economy needs. On January 11, President Ebrahim Raisi submitted his budget proposal to the Majlis for the Iranian year 2023/24. Drafted amid the most severe protests the Islamic Republic has faced since its establishment in 1979, the proposal includes no economic olive branches to the people and avoids structural reforms that could help rein in inflation and fuel growth.
Topic:: Economics, Reform, Budget, Democracy, and Energy
Political Geography:: Iran and Middle East

4. Environmental Protection and Climate Change Budgets of Metropolitan Municipalities

Author:: Nurhan Yentürk, Berkay Hacımustafa, Yakup Kadri Karabacak, Ezgi Ediboğlu Sakowsky, and Işık Baştuğ
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Turkish Economic and Social Studies Foundation (TESEV)
Abstract:: This study firstly aims to classify the environmental protection and climate change (EPCC) goals stated in the 2022 performance programs of the 14 metropolitan municipalities (MM) with the highest expenditures in Turkey and their affiliated institutions (AF) (water and sewerage departments and transportation administrations) according to mitigation, adaptation, waste, and other environmental goals and to examine the budget allocated to these targets. The study, also, evaluates the pros and cons of the budgets allocated by the 14 metropolitan municipalities to mitigation, adaptation, waste, and other goals and develops concrete policy recommendations for areas in which budgets should be increased/decreased.
Topic:: Climate Change, Environment, Governance, Crisis Management, Sustainability, Public Spending, and Municipalities
Political Geography:: Turkey, Middle East, and Mediterranean

5. Budget Brief: Pradhan Mantri Awaas Yojana – Gramin

Author:: Neeha Susan Jacob, Anwesha Mallick, and Avani Kapur
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Policy Research, India
Abstract:: Pradhan Mantri Awaas Yojana – Gramin (PMAY-G) is Government of India’s (GoI’s) flagship ‘Housing for All’ scheme. The scheme aims to provide monetary assistance for the construction of a pucca house with basic amenities to all rural houseless families and those living in dilapidated and kutcha houses. Using government data, this brief reports on trends in: ■ Allocations and cost estimates; ■ Releases and expenditures; ■ Target completion and physical progress of house construction; and ■ Payments to eligible citizens.
Topic:: Budget, Housing, and Public Spending
Political Geography:: South Asia and India

6. Budget Brief: Jal Jeevan Mission (JJM)

Author:: Neeha Susan Jacob, Sidharth Santhosh, and Avani Kapur
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Policy Research, India
Abstract:: Jal Jeevan Mission (JJM) is Government of India’s (GoI’s) rural drinking water programme to provide functional tap connections to every household for drinking, cooking, and other domestic needs on a sustainable basis by 2024. It subsumes the National Rural Drinking Water Programme (NRDWP). This brief uses government data to report on: ■ GoI allocations, releases, and expenditures; ■ Component-wise trends; ■ Progress on coverage; and ■ Paani Samitis for Operations and Maintenance (O and M).
Topic:: Water, Governance, Budget, Rural, Sustainability, and Public Spending
Political Geography:: South Asia and India

7. Budget Brief: Samagra Shiksha

Author:: Mridusmita Bordoloi, Avani Kapur, and Sidharth Santhosh
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Policy Research, India
Abstract:: Samagra Shiksha is Government of India’s (GoI’s) school education programme covering preprimary to higher-secondary levels. Launched in April 2018, the scheme is the primary vehicle to implement the provisions under the Right of Children to Free and Compulsory Education (RTE) Act, 2009, and the goals for school education envisaged under the National Education Policy (NEP), 2020. After a year of reopening of schools, post the COVID-19 pandemic, this brief uses government data to analyse Samagra Shiksha performance based on: ■ Trends in allocations, releases, and expenditures; ■ Component-wise approved budgets; ■ School enrolment trends pre and post COVID-19 pandemic; and ■ Learning outcomes and ICT infrastructure.
Topic:: Education, Governance, Budget, COVID-19, and Public Spending
Political Geography:: South Asia and India

8. Budget Brief: National Health Mission

Author:: Avani Kapur, Ritwik Shukla, and Sharad Pandey
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Policy Research, India
Abstract:: National Health Mission (NHM) is Government of India’s (GoI’s) largest public health programme, which aims to achieve universal access to quality healthcare. It consists of two sub-missions: ■ National Rural Health Mission (NRHM); and ■ National Urban Health Mission (NUHM). This brief uses government data to analyse: ■ NHM finances, including proposed and approved budgets, releases, and expenditures; ■ Staff and bed availability; and ■ Outcomes.
Topic:: Health, Governance, Budget, and Public Spending
Political Geography:: South Asia and India

9. Budget Brief: Ayushman Bharat

Author:: Madhur Sharma, Rahul Das, and Avani Kapur
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Policy Research, India
Abstract:: Ayushman Bharat, under the aegis of the Ministry of Health and Family Welfare (MoHFW), was launched by Government of India (GoI) on 23 September 2018. This brief uses government data to analyse the following components of the scheme: ■ Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY); ■ Establishment of Health and Wellness Centres (HWCs); ■ Ayushman Bharat Digital Mission (ABDM); and ■ Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM).
Topic:: Health, Governance, Budget, and Public Spending
Political Geography:: South Asia and India

10. Budget Brief: Smart Cities Mission

Author:: Anwesha Mallick, Rahul Das, and Avani Kapur
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Policy Research, India
Abstract:: Smart Cities Mission (SCM) is Government of India’s (GoI’s) urban rejuvenation mission launched on 25 June 2015. The Mission was initiated with the objective of providing core infrastructure, and decent quality of life to its citizens, along with a clean and sustainable environment. The brief uses government data to analyse the following components of the scheme: ■ Allocations and releases; ■ Utilisation of funds; ■ Project cost and completion rates; and ■ Funding through Public Private Partnership (PPP).
Topic:: Infrastructure, Governance, Budget, Smart Cities, and Public Spending
Political Geography:: South Asia and India

11. Budget Brief: Food Subsidy and the National Food Security Act

Author:: Jenny Susan John, Avani Kapur, and Ria Kasliwal
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Policy Research, India
Abstract:: Food Subsidy is provided by the Government of India (GoI) for the supply and distribution of foodgrains and other essential commodities. With the passing of the National Food Security Act (NFSA) in 2013, nutritional security became a right. Under the Act, adequate quantities of quality food at affordable prices are to be provided to two-thirds of India’s population. This brief uses government data to analyse: ■ Allocations and releases under Food Subsidy; ■ Trends in foodgrain allocations, offtake, and distribution under NFSA and Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY); ■ Coverage under NFSA; and ■ Implementation under ‘One Nation, One Ration Card’ (ONORC).
Topic:: Governance, Budget, Food Security, and Public Spending
Political Geography:: South Asia and India

12. Budget Brief: Mission Saksham Anganwadi and Poshan 2.0

Author:: Avani Kapur, Tanya Rana, and Ritwik Shukla
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Policy Research, India
Abstract:: In Financial Year (FY) 2021-22, the Government of India (GoI) restructured the Integrated Child Development Services (ICDS), POSHAN (Prime Minister’s Overarching Scheme for Holistic Nourishment) Abhiyaan, and the Scheme for Adolescent Girls (SAG) into Mission Saksham Anganwadi and Poshan 2.0, also known as Poshan 2.0. This brief uses government data to analyse: ■ Required funds, allocations, and releases; ■ Governance, including human resources; ■ Changes in coverage; and ■ Outcomes.
Topic:: Development, Governance, Budget, Children, and Public Spending
Political Geography:: South Asia and India

13. Budget Brief: Mahatma Gandhi National Rural Employment Guarantee Scheme

Author:: Ria Kasliwal, Mridusmita Bordoloi, and Avani Kapur
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Policy Research, India
Abstract:: Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is Government of India’s (GoI’s) flagship scheme to provide at least 100 days of guaranteed wage employment in a financial year to every rural household that demands work. Using government reported data, this brief reports on the trends for: ■ Allocations, releases, and expenditures; ■ Paid wages and delayed compensations; and ■ Employment demanded and provided.
Topic:: Governance, Budget, Employment, Rural, and Public Spending
Political Geography:: South Asia and India

14. Budget Brief: Pradhan Mantri Matru Vandana Yojana and Janani Suraksha Yojana

Author:: Avani Kapur, Tanya Rana, and Jenny Susan John
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Policy Research, India
Abstract:: This brief reports on two maternity benefit schemes of the Government of India (GoI): a) Pradhan Mantri Matru Vandana Yojana (PMMVY) provides partial wage compensation to improve health-seeking behaviour of pregnant women and lactating mothers for two live births; and b) Janani Suraksha Yojana (JSY) incentivises institutional and safe delivery for reducing infant and maternal mortality. Using government data, this brief reports on: ■ Trends in finances; ■ Coverage and payments; and ■ Outcomes.
Topic:: Budget, Women, Public Spending, and Pregnancy
Political Geography:: South Asia and India

15. Budget Brief: Pradhan Mantri Poshan Shakti Nirman

Author:: Avani Kapur, Sharad Pandey, and Madhur Sharma
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Policy Research, India
Abstract:: The National Programme of PM POSHAN, previously known as the National Scheme for Mid-Day Meals in schools (MDM), is a scheme to provide one hot cooked meal in government and government-aided schools, with an aim to improve the nutritional status of students. This brief reports on trends for PM POSHAN performance along the following parameters: ■ Past trends in allocations, releases, and utilisation; ■ Coverage and provision of meals to students; and ■ Management Information System (MIS) and Automated Monitoring System (AMS).
Topic:: Governance, Budget, Food Security, Public Spending, and Schools
Political Geography:: South Asia and India

16. Women, Peace and Security and the 2022 National Security Strategy

Author:: Hans Hogrefe and Cassandra Zavislak
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Our Secure Future
Abstract:: This brief examines the inclusion of the Women, Peace and Security agenda in the Biden Administration’s 2022 National Security Strategy, and compares it to the ways in which the Trump Administration’s 2017 National Security Strategy addresses the full participation of women in our national security interests.
Topic:: Security, National Security, Women, Inequality, Peace, and Strategic Competition
Political Geography:: Russia, China, North America, and United States of America

17. U.S. Health Care from a Global Perspective, 2022: Accelerating Spending, Worsening Outcomes

Author:: Munira Z. Gunja, Evan D. Gumas, and Reginald D. Williams II
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Commonwealth Fund
Abstract:: In the previous edition of U.S. Health Care from a Global Perspective, we reported that people in the United States experience the worst health outcomes overall of any high-income nation.1 Americans are more likely to die younger, and from avoidable causes, than residents of peer countries. Between January 2020 and December 2021, life expectancy dropped in the U.S. and other countries.2 With the pandemic a continuing threat to global health and well-being, we have updated our 2019 cross-national comparison of health care systems to assess U.S. health spending, outcomes, status, and service use relative to Australia, Canada, France, Germany, Japan, the Netherlands, New Zealand, Norway, South Korea, Sweden, Switzerland, and the United Kingdom. We also compare U.S. health system performance to the OECD average for the 38 high-income countries for which data are available. The data for our analysis come from the Organisation for Economic Co-operation and Development (OECD) and other international sources (see “How We Conducted This Study” for details). For every metric we examine, we used the latest data available. This means that results for certain countries may reflect the height of the COVID-19 pandemic, when mental health conditions were surging, essential health services were disrupted, and patients may not have received the same level of care
Topic:: Health, Health Care Policy, Inequality, and Finance
Political Geography:: North America and United States of America

18. U.S. and Global Approaches to Financing Long-Term Care: Understanding the Patchwork

Author:: Celli Horstman, Evan D. Gumas, and Gretchen Jacobson
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Commonwealth Fund
Abstract:: Most United States adults age 65 and older will need long-term care toward the end of their lives.1 Long-term care, provided in the home, community, or in institutional settings like a nursing home, includes medical care as well as personal, nonmedical care for people who are unable to perform activities of daily living, like cooking or bathing. Some services also may support social needs for those unable to perform what are known as instrumental activities of daily living, such as shopping or medication management. In 2018, more than 5 million people in the United States used home health care, including adult day care or home health agency services, and nearly 4 million people resided in nursing homes or residential care communities.2 Despite the widespread need for long-term care, the U.S. has no national program to cover the costs of long-term care. While certain states have implemented their own programs, the resulting patchwork of funding has left many Americans with no sustainable way to pay for the services they require. Other developed countries have comprehensive, national long-term care financing systems featuring broad eligibility and high levels of financial support. In this brief, we analyze data from multiple sources on long-term care costs in the U.S., as well as spending data from the Organisation for Economic Co-operation and Development (OECD), to better understand long-term care financing strategies in 12 high-income countries. In addition to these data, we synthesized initiatives to long-term care funding in these 12 countries. (For details, see “How We Conducted This Study.”) Since the U.S. does not have a national funding strategy, we also focused on individual state approaches. International and U.S. state approaches may provide insights to policymakers seeking to advance comprehensive long-term care funding.
Topic:: Health, Health Care Policy, Inequality, and Social Services
Political Geography:: Global Focus

19. The First COVID Wave: Comparing Experiences of Adults Age 50 and Older in the U.S. and Europe

Author:: Thomas Barnay and Eric Defebvre
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Commonwealth Fund
Abstract:: Three years after the COVID-19 pandemic began, the United States remains one of the hardest-hit countries, with more than 1 million confirmed coronavirus deaths, of which more than 91 percent involved people 50 years and older.1 Beyond causing this enormous loss of life, the pandemic has had other significant adverse consequences, including hospitalizations, job loss, and delayed care for millions of Americans. In this brief, we examine how U.S. adults age 50 and older fared during the first wave of the pandemic in the summer of 2020, compared with their peers in European countries.
Topic:: Pandemic, COVID-19, and Health Crisis
Political Geography:: North America and United States of America

20. Beyond European extraterritoriality, for legal intelligence and compliance in the service of sovereignty: A response to the extraterritoriality of foreign laws to safeguard fundamental European values

Author:: Amélie Giuliani
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: In this period of change, companies must anticipate their local legal environment, regional and international regulations and foreign laws with extraterritorial scope on a daily basis.
Topic:: International Relations, Sovereignty, Law, European Union, and Compliance
Political Geography:: Europe

21. European energy solidarity: strengthening the EU’s crisibility

Author:: Aline Bartenstein
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: By default, when the EU is hit by a crisis, member states tend to have a national sovereignty reflex. When Italy was hit hard by the Covid-19 pandemic, the first reaction was to close its borders and restrict the export of urgently needed medical equipment. National interest superseded the call for European solidarity. Although member states have repeatedly managed to unite and – in the face of the polycrisis – developed a certain crisibility, no one would have been surprised if member states had preferred to seek their own advantage when Russia started the war in Ukraine on 24 February 2022. Nearly one year later, member states are (still) united – some declaring this as never before – and a gas or electricity crisis has so far been averted. This unity, which certainly threatened to crumble in the face of Hungarian opposition, German hesitancy, and the different approaches to dealing with the war, leads us to the question of what is different this time? Certainly, the EU's identity has been profoundly challenged by the war since its peacekeeping credentials – the EU is even a recipient of the Nobel Peace Prize – were perceived to be at risk. Was is this identity-threatening experience that united the member states? Or was it the recognition of Russia as a common foe that strengthened the bond between them?
Topic:: Sovereignty, European Union, Solidarity, Energy, and Regional Politics
Political Geography:: Russia, Europe, and Italy

22. Can the EU still wrest the Balkans from their blighted history?

Author:: Jean Bizet and Fabrice Hugot
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: It is perhaps necessary, first of all, to recall why the name "Western Balkans" is still used to describe this peninsula in south-eastern Europe, why this imprecise geographical concept is preferred to any other name. To answer this question is to recognise from the outset the difficult fate suffered by this part of Europe: if we prefer to speak of the Balkans, it is quite simply because only geography is stable in this region.
Topic:: European Union, History, Geography, Regional Politics, and Russia-Ukraine War
Political Geography:: Europe and Balkans

23. Geopolitical and Technocratic: EU International Actorness and Anne PINTSCH Russia’s War Against Ukraine

Author:: Anne Pintsch and Maryna Rabinovych
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: Russia’s full-scale invasion of Ukraine on 24 February 2022 marked the start of the largest and most brutal war at the heart of the European continent since World War II. It inevitably came as a “cold shower” for the EU and Member States’ politicians, demonstrating with absolute certainty the fragility of the international and European security order. The EU responded to the invasion with unprecedented sanctions against Russia and Belarus and multifaceted resolute support to Ukraine. The latter included the breaking of many previously existing taboos, such as the first ever use of the European Peace Facility to procure weapons for a third country at war or offering collective protection to about 8 million Ukrainian citizens and residents, fleeing the war
Topic:: European Union, Geopolitics, Resilience, Technocracy, Regional Politics, and Russia-Ukraine War
Political Geography:: Russia, Europe, and Ukraine

24. Europe as a power: now or never

Author:: Jean-Paul Palomeros
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: One year already, one year of misfortune for the Ukrainian people, one year of blind violence, of sirens’ blasts, of terror, of exile for some, even of deportation, of grief for many families. One year of systematic destruction of Ukraine's industry, its infrastructure, its energy production centres, part of its agricultural resources, of its economy. One year of oppression in the occupied territories, torture, war crimes, indoctrination, Russification. However, this appraisal is not exhaustive, it cannot take into account the destructuring of Ukrainian society, the reality and the extent of the sacrifices of a young generation of Ukrainians who are paying with their lives for their visceral attachment to their country and its values. But it must be stressed and repeated, for the Ukrainian people and their army it has been a year of struggle, of fierce, often heroic resistance, of resilience, of will to defend a free, democratic Ukraine and to restore its sovereignty.
Topic:: Crisis Management, Regional Politics, and Russia-Ukraine War
Political Geography:: Europe

25. Gender equality in Europe: a still imperfect model in the world

Author:: Stefanie Buzmaniuk
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: In a world where women's rights are once again being challenged from all quarters, Europe remains the place where women live best. Within the Union, however, there have been some setbacks, difficulties persist, and progress is still required in the political, economic and social fields to achieve true gender equality.
Topic:: Human Rights, European Union, Women, Inequality, and Gender
Political Geography:: Europe

26. Rule of law: the uncertain gamble on conditionality

Author:: Eric Maurice
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: Will 2023 be the year when Hungary and Poland join the ranks of Member States that respect the values of the European Union? Nothing is less certain because, in Budapest as in Warsaw, the reforms demanded by the Union have not yet been implemented. In early February Polish president Andrzej Duda, referred a law which was supposed to bring an end to disciplinary abuses against judges to the Constitutional Court. The Hungarian government has still not completed reforms to make public procurement more transparent and to strengthen the fight against corruption. The fact that these measures are being discussed indicates however that the balance of power has changed. 2022 was a pivotal year in the European Union's efforts to combat breaches of the rule of law in its Member States. For the first time, a range of new and old tools, specific or not, structural or conjunctural, were used to try to reverse the trend that has been developing for several years, mainly in Hungary and Poland, of undermining the independence of the judiciary, systems of checks and balances, and certain rights that are considered fundamental.
Topic:: European Union, Rule of Law, Judiciary, and Regional Politics
Political Geography:: Europe, Poland, Romania, and Hungary

27. Is the banking crisis back?

Author:: Olivier Perquel
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: On March 8th, 2023, the Silvergate Bank, a small American regional establishment, a crypto-currency specialist, went bankrupt. Two days later, on March 10th, the Silicon Valley Bank, a large regional bank, which had become the 16th largest in the US by total assets, and the largest holder of the liquidities of Californian startups and venture capital, failed. On March 12th, Signature Bank (roughly half of the size of Silicon Valley Bank), of which the Trump family was a client until the Capitol incidents, also collapsed. Three bank runs in only a few days, even though everyone believed that since the 2007 crisis and the subsequent massive re-regulation of the banking sector in the United States and in Europe, the banking sector was safe. These three bankruptcies followed the same mechanism. Silicon Valley, as its name suggests, was the main bank of the Californian Silicon Valley, where startups and venture capital funds deposited their liquidities. And following the extraordinary development of this activity until 2022, these liquidities had become extremely large. It should indeed be understood that these funds and startups which look for financial backing all the time and obtain frequent and ever larger fundraises, therefore own significant amounts of liquidities. Indeed, start-ups raise money at a given point in time to finance their runway, i.e. their investments and working capital requirements, for a certain period of time (one, two or three years) until the following fundraise. As a result, during the intermediary period, they deposit the amounts raised and not yet spent in banks. Similarly, the venture capital funds take a certain time to invest the amounts raised and, in the meantime, deposit their Dry Powder in banks. Hence these bank deposits grow extremely rapidly. However, an organization like Silicon Valley Bank cannot develop at the same speed as its credit activities, far from it. It is therefore obliged to invest its assets in bonds, notably US Treasury bonds, liquid in nature, and not risky - supposedly. And when rates rise, the value of these bonds decreases, even if it does not show in the bank’s accounts, since these bonds are generally accounted for as “held to maturity”, i.e. at par. Indeed, at maturity, these bonds will be reimbursed at par; and if the banks keep these bonds until then, it will not lose any money
Topic:: Economy, Banking Crisis, and Startup
Political Geography:: North America and United States of America

28. A return to grace for nuclear power in European public opinion? Some elements of a rapid paradigm shift

Author:: Mathieu Brugidou and Jérémy Bouillet
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: The health crisis triggered by the Covid-19 pandemic, and perhaps above all the war in Ukraine, together with increasingly outspoken Chinese and/or American interventionism, have largely contributed to "breaking European energy taboos"[1] towards more collective and coordinated approaches. This is undeniable in the field of energy: if certain mechanisms such as the general cap on gas prices have not been adopted, some measures, which were hard to imagine at European level until recently, have now been ratified, such as joint gas purchases, shared objectives for reducing energy demand, the obligation to store energy, etc.
Topic:: Public Opinion, Nuclear Power, COVID-19, Health Crisis, and Russia-Ukraine War
Political Geography:: Europe

29. Judging Putin

Author:: Arnaud De Nanteuil
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: The publication of an international arrest warrant against Vladimir Putin on 17 March 2023 by the Second Pre-Trial Chamber of the International Criminal Court (ICC) has caused a stir. Although the institution is far from immune from criticism (it has long been accused of being "strong with the weak and weak with the strong"), this is a major change in the Court's policy as it is the first warrant ever issued against the sitting leader of a permanent member of the UN Security Council; a member who, moreover, in a chilling irony of history, played a key role in the Nuremberg Trial. In some respects, this is a gamble, given the many obstacles that stand between this historic event and a possible conviction of Vladimir Putin. But this arrest warrant is also a way to put the ICC back in the centre of the game, even though until now it seems to have been largely denied the possibility of judging the main perpetrator of the war of aggression against Ukraine and its disastrous humanitarian consequences.
Topic:: International Law, War Crimes, International Criminal Court (ICC), Vladimir Putin, and Russia-Ukraine War
Political Geography:: Russia, Europe, and Ukraine

30. Digital Sovereignty: For a Schuman Data Plan

Author:: Arno Pons
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: On 9 January, the European Commission launched the first cooperation and monitoring cycle for the achievement of the European Union’s digital decade by 2030. If, in the digital field, Europe faces issues of sovereignty, it is because it has left the sector open for over twenty years to the American Tech giants, who have imposed a game whose rules that have never been understood here. Either because these rules were inaccessible to the European Union (Moore and Metcalfe laws), or because we accepted that there were no rules of the game (code is law).
Topic:: Markets, Science and Technology, Infrastructure, Law, European Union, Data, European Commission, and Digital Sovereignty
Political Geography:: Europe

31. The Élysée Treaty, FrancoGerman reconciliation and European integration: myth and reality

Author:: Hartmut Marhold
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: “During General de Gaulle's visit last week, I thought often of you, the man who, with his proposal to create the European Coal and Steel Community, laid the foundations of the friendship which would henceforth bind our two countries so closely together. I always think of our cooperation with great appreciation. I feel the need, especially in the present circumstances, to express this gratitude to you[1],” wrote the German Chancellor, Konrad Adenauer, on 10 September 1962 to former French Foreign Minister, Robert Schuman. Konrad Adenauer was anxious to set things straight and avoid the creation of a myth. For him, Franco-German reconciliation, at the service of European integration, began on 9 May 1950 with the “Schuman Declaration”. It was not going to start with the Treaty in progress, the future Elysée Treaty. Robert Schuman, in his "Testimony on Adenauer", confirms this: "When in May 1950, the French government offered to the European nations to sit down, without discrimination between victorious and defeated countries, with equal rights and obligations, for a work of joint cooperation guaranteed by mutual control, this truly political revolution required Franco-German reconciliation. Even before consulting our friends and allies, we asked Chancellor Adenauer. If he had said no, Europe and European integration could not have existed. Our expectations were not disappointed[2].” Three years earlier, at a solemn ceremony, Konrad Adenauer had already had the opportunity to address Robert Schuman in front of a Franco-German audience, emphasising that it was he, Schuman, who had "definitively put an end to the Franco-German history full of atrocities thereby creating a lasting friendship between the two peoples". He said: "You, Mr Schuman, took the initiative for this great work and began to build it. That is why we are deeply grateful to you.” The Chancellor concluded by insisting that "it was Monsieur Schuman who laid the foundations for a good and lasting understanding between France and Germany and for a European future, that Europe owed its survival to his action[3].”
Topic:: Treaties and Agreements, History, and Regional Integration
Political Geography:: Europe, France, and Germany

32. The Future of Neutrality

Author:: Pascal Lottaz
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: The Geneva Centre for Security Policy
Abstract:: Neutrality is a naturally occurring phenomenon. There have always been actors on the world stage that have remained outside the conflicts of others, be they countries, religious institutions or international organisations (IOs). Even during the two world wars and the first Cold War (i.e. the US and its allies versus the USSR and its allies), some actors managed to avoid the battlefields or claimed a position separate from the various alliance systems. Despite the beliefs of some commentators that neutrality is coming to an end, there is no indication that world politics is actually about to change dramatically enough to eradicate the reasons and logic for neutrality. In fact, the least conductive international environment for neutrality – unipolarity – seems to be ending. What could be called the “New Cold War” (the West-aligned countries versus Russia in Europe and versus China in Asia) and the emerging multipolar world will likely produce the dynamics leading to more neutrality as a counter-reaction to the new great power rivalry. We should expect neutrality and neutralism – i.e. political movements demanding the adoption of neutrality policies – to strengthen. Nevertheless, neutrality is shifting. It is moving from Europe to other regions of the world, and, in the process, will likely also change conceptually. This Policy Brief will first describe the nature of neutrality and the three basic motivations for actors to opt for its policies. It then discusses the challenges any neutrality policy faces and will conclude by providing concrete recommendations for policymakers seeking to maintain neutrality vis-à-vis either hot or cold conflicts.
Topic:: International Cooperation, Hegemony, Rivalry, and Neutrality
Political Geography:: Global Focus

33. Japan’s Carbon Neutrality and Green Growth Strategy

Author:: Gyu-Pan Kim
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: Japan is mobilizing all its policy capabilities for energy transition from fossil fuels to renewable energy and hydrogen energy from the perspective of realizing carbon neutrality by 2050. Among them, the overseas development and return of hydrogen energy to Japan and the domestic green hydrogen development are making great progress since the announcement of the basic hydrogen strategy in December 2017. Japan promotes the green growth strategy (December 2020) as a national strategy to achieve the 2030 GHG reduction target of 46% (compared to 2013) (NDC) and to realize ‘carbon neutrality by 2050’. Japan's green growth strategy sets 14 areas as key development industries, including offshore wind power, hydrogen, nuclear power, automobiles and batteries, semiconductors, and information & technology. It also presents action plans in the key 14 areas such as R&D, demonstration projects, introduction expansion, and self-reliance/commercialization according to the growth stage of each area. In this WEB, we would like to explore which part of Japan's energy transition policy and green growth strategy the Korean government will refer to in order to achieve the task of realizing carbon neutrality by 2050, and cooperate with Japanese government.
Topic:: Climate Change, Economic Growth, Fossil Fuels, Carbon Emissions, Hydrogen, Energy, and Green Transition
Political Geography:: Japan and Asia

34. Korea's Official Development Assistance to the Philippine Education Sector: Observations and Inputs

Author:: Inero Ancho
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: Advocating inclusive and equitable quality education (SGD 4: Quality Education) is central to sustainable development efforts anchored on collaboration and partnership that enable the policy-to-impact synergy. Agencies and institutions in various levels need to align motivations as they work towards realizing education for sustainable development (ESD). As education fuels sustainable development, school access and completion need to be prioritized, as wealth inequality and gender gap are eliminated. Human capital investment involves the provision of relevant and responsive education systems and training. These mechanisms enable an individual to be productive and contribute to positive outcomes, improved standard of living, and potential gains. As a core element to growth and poverty reduction, human capital suggests implementing significant and concrete progress in core education indices. Further, sustained economic growth, increased productivity value, and favorable social returns are manifested outcomes at the macro level. This paper looks at the ODA from Korea to the Philippines in the context of education. The discussion will be anchored on the Philippine Development Plan and AmBisyon Natin 2040 as roadmaps reflecting the aspirations of every Filipino of having a strongly rooted, comfortable, and secured life.1 Observations and inputs will be offered to ensure effective ODA and provide focus and ways forward towards access to and quality of education, along with programs and projects that contribute into any meaningful development of the Philippine economy.
Topic:: Development, Education, Economy, Human Capital, and Sustainability
Political Geography:: Asia, South Korea, and Philippines

35. ASEAN's medium- to long-term trade strategies and the direction of RoK-ASEAN cooperation

Author:: Sungil Kwak, Seungjin Cho, Jaewan Cheong, Jaeho Lee, Mingeum Shin, Nayoun Park, and So Eun Kim
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: In recent years, the U.S.-China hegemony competition has intensified, dividing the world into two blocs. ASEAN has long culti-vated its position on the international stage by maintaining a certain distance between the United States and China. In that sense, ASEAN is the best partner for Korea to ef-fectively respond to the divided world. Therefore, this study seeks the directions of cooperation with ASEAN in supply chain, digital trade, climate change response, and health and development cooperation in line with changes in the international order.
Topic:: Climate Change, Development, Economics, International Cooperation, Trade, and ASEAN
Political Geography:: China, Asia, North America, and United States of America

36. Catch-up and Leapfrog Strategies for Developing Countries: Making a Case for a Social Spring

Author:: Leonardo Paz Neves
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: There is an ongoing consensus that we are on the brink, if not already started, of a major technological revolution. The Fourth Industrial Revolution has a wider and deeper transformative power. It could be considered a major paradigm shift of our time. Its importance is characterized by a wave of innovation in many fields, yet it is not compartmentalized in silos of technological advancements and product innovation. Each of those breakthroughs ripples in many other spheres as productive, labor, social, economic, health, etc. And in every transition, every transformation, new opportunity arrives. In paradigm shifts like these, ‘Windows of Opportunity’ are opened. Perez and Soete (1988) studied the entry phase, which developing countries should use in their development strategies to catch-up with industrialized countries, arguing that from time to time, the entry barriers recede, creating a window of opportunity for those developing countries. Taking advantage of these windows of opportunity is fundamentally conditioned to the ‘social capability’ of these lagging countries (Abramovitz 1995). There is because, in the moments in which the edge based in tech experience is not a determinant factor and the entry barriers recede, latecomers have a better chance in catching-up. But, they will only be able to compete with the leading economies if certain social conditions are met. With fewer development pol-icy options, these countries will have to go be-yond the classic developmental approach to succeed in leapfrogging and take the lead. Thus, while forging their path towards devel-opment, developing countries should try to take their own past experience and reassess it from a different perspective.
Topic:: Science and Technology, Economic Development, and Opportunity
Political Geography:: Global Focus

37. Implications of Climate Change Impacts on Food Security Threats in Africa and the Middle East

Author:: Munsu Kang
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: The food security crisis in the Middle East has been exacerbated by several events, including COVID-19 and Russia's invasion of Ukraine, but the greater crisis is the decline in agricultural productivity caused by climate change and the rise of protectionist trade policies. This study examined the impact of drought on regional grain prices, specifically drought, which has the greatest impact on the Middle East region of Africa among weather changes. It was predicted by the IPCC (2019) that weather changes would affect agricultural production systems and that these changes would affect international grain markets and government trade policies. This study found that prices in the African Middle East maize and rice market increased as the drought intensified and the period lengthened, as predicted. Sorghum and millet, however, are relatively inelastic to climate change, so it can be assumed that they will receive attention as climate change intensifies. This study proposes areas for cooperation such as agricultural production, supporting the vulnerable, and crop reserve with the Middle East and Africa.
Topic:: Climate Change, Food Security, and COVID-19
Political Geography:: Africa and Middle East

38. Developing ODA Evaluation Methodology for Technical Cooperation

Author:: Eunsuk Lee and Hyemin Yoon
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: As the volume of Korea's official development assistance (ODA) expands, the demand for systematic management of evaluations and improvement of their usefulness is increasing. This study focuses on developing evaluation methodology for technical cooperation (TC) which is an important part of Korea’s ODA. Based on the case studies of six multilateral organizations and four bilateral development agencies, we draw lessons for Korean ODA agencies in terms of selection criteria, types, and methodological aspects of evaluation of technical cooperation and propose a four-step project management and evaluation mechanism for TC activities.
Topic:: Development, Economics, Science and Technology, and Management
Political Geography:: Asia and South Korea

39. The Impact of Populist Executive on the Inflow of Foreign Direct Investment in Latin America

Author:: Seungho Lee
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: Populist forces have been resilient in Latin America and continue to cause instability and uncertainty across the region. Populist figures in the region first rose to prominence during the period of import substitution industrialization in the 1930s, capitalizing on the growing demands for mass politics and better social benefits from the rapidly expanding urban working class. Populism, which had been rampant in Latin America for more than 30 years since then, seemed to fade into obscurity with military regimes which have dominated regional politics in the 1960s and 1970s. However, after a series of democratic transitions, Latin American democracies witnessed yet another wave of populism. A notable number of candidates with a populist discourse have achieved victories in presidential elections in the 1980s and 1990s. With the wave of democratization and the accumulation of public dissatisfaction due to a series of economic crises, some so-called neopopulists took power in a number of Latin American countries. They attracted voters by combining neoliberal economic policies with the typical “us-versus-them” discourse, demonstrating that any economic ideology can be linked to populist ideas. The new millennium witnessed another tide of populist presidents across the region. While a rapid transition to neoliberal policies led to various socioeconomic problems, traditional parties and politicians could not respond effectively to the emerging problems. This time around, left-wing populist figures dominated the region’s political landscapes, combining populist ideas with so-called 21st-century socialism. While the era of radical left-wing populists came to an end, new breeds of populists appeared one after another and were elected to office in the 2010s. Not many expect that populist executives will cease to exist across the region in the near future. Social and economic inequality is worsening in the aftermath of COVID-19, and the public distrust of established party politics and existing democratic institutions is growing more than ever. All in all, there is fertile ground for populist forces to spread even more, who claim that they are the only ones who can eliminate the "incompetent and corrupt" establishment and truly represent the "virtuous" people. Against this backdrop, there is a growing need to improve our understanding of the characteristics of populist governments that have repeatedly emerged in the region. Among many channels through which populist rule influences Latin American countries, Lee et al. (2022) dedicate one of their chapters to analyzing the impact of populist rule on the inflow of foreign direct investment, a variable of much importance in Latin American economies.
Topic:: Foreign Direct Investment, Populism, and Instability
Political Geography:: Latin America

40. International Humanitarian Assistance and Multilateral Cooperation in North Korea

Author:: Jangho Choi and Yoojeong Choi
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: The economic situation in North Korea is worsening. If an economic crisis occurs in North Korea, the first thing that will be pursued is humanitarian aid from the international community. North Korea's problems should not spread beyond North Korea, and above all, the international community should help ensure that the residents of North Korea can live at a minimum level of respect as human beings. This article aims to examine international humanitarian aid to North Korea and multilateral cooperation. We will examine how international humanitarian aid to North Korea has been carried out so far, what North Korea's position is on international support, and what the achievements of multilateral cooperation have been.
Topic:: Economics, Humanitarian Aid, and Multilateralism
Political Geography:: Asia and North Korea

41. Covid-19 Crisis and Shifts in the Corporate Competitive Landscape: Comparisons with Previous Economic Crises

Author:: Sang-Ha Yoon, Yaein Baek, Wontae Han, Yoonsoo Lee, and Daisoon Kim
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: In terms of economic fluctuations, it is well recognized that the effects of an economic crisis have a detrimental impact on the entry, growth, decline, and exit of firms. In addition, the magnitude of the impact varies both within and between industries depending on the size and other characteristics of the firm. The economy is going through significant changes due to the emergence of new industries and the decline or disappearance of current ones. This study looks at how big economic events like the COVID-19 pandemic and the global financial crisis have affected businesses and industries. After completing a study at several levels of top international corporations, larger domestic enterprises, and domestic small and medium-sized businesses, it attempts to draw policy implications. First, it is necessary to foster and support top-tier companies to defend against global economic fluctuations and strengthen international competitiveness. In particular, the institution in charge of competition policies domestically and the institution that helps companies improve their competitiveness are different and the focus of policies is distinctive, so comprehensive attention and perspective of policymakers are needed. Second, it is urgent to respond to new issues related to competition policy in the domestic market. The behavior of emerging big tech and platform companies is different from monopoly companies in the past, so consumer welfare is not impaired, but it burdens nearby and other market participants. Therefore, a view that deviates from the focus on monopoly pricing is also essential for competition policy. Third, measures to support global corporate growth and countermeasures against changes in the industrial landscape should be prepared. Investment and R&D expansion at the corporate level is essential for corporate growth, and measures are needed to boost investment in recently emerging intangible assets. In addition, it is important to revitalize the movement of economic resources to cope with changes in the inter-industry landscape accompanied by the crisis. Fourth, policies to revitalize start-ups and closures are required. The decline in new companies' market entry and exit rates is a symtom of an aging economy contributing to the overall decrease in productivity. Therefore, enhancing the revitalization of the corporate ecosystem and expanding the size of enterprises are essential to enhance the dynamics of the economy. Fifth, it is necessary to find an appropriate combination of government roles in times of crisis. In particular, it is important to grasp the detailed status of economic stabilization policies in relation to SMEs, and at the same time, clear judgments on the appropriate size of support measures, the period of support, and the timing of collection are urgently needed.
Topic:: Economics, COVID-19, Corporations, Economic Crisis, and Competition
Political Geography:: Global Focus

42. Does Institutional Quality Matter to Korean Outward FDI? A Gravity Model Analysis

Author:: Muhammad Akhtaruzzaman
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: According to Korea’s Ministry of Knowledge Economy (currently the Ministry of Trade, Industry and Energy), foreign investment has now become one of the major economic pillars driving the Korean economy over the past 15 years (Tang 2022). The Korean economy started to open up to rest of the world following the Asian financial crisis in 1997 and was the biggest FDI policy reformer among 40 developed and emerging economies over the period from 1997 to 2010 (Nicolas et al. 2013). Over the last decade, Korea’s outward FDI grew much faster than inward FDI (See Figure 1) and Korea is now a net capital exporter to the world. In 2021, Korea’s outward FDI flows totaled $76.64 billion and a total of 2323 Korean enterprises invested in overseas countries (Korea EXIM Bank 2022). Due to this increased amount of outward FDI, a large number of studies (Kim and Rhee 2009; Park and Jung 2020) investigated what determines Korea’s outward FDI (OFDI). Institutional quality is found to be a major determinant in FDI literature in general. It suggests that political risk (lack of/poor institutional quality) not only deters FDI inflows to host countries but also can lead FDI to countries with higher risks and to ‘pollution heaven’ which might have an adverse impact on long term growth and development in both host and home countries. There are strong empirical evidences in literature that lack of institutional quality or good governance is associated with lower FDI inflows. An extensive literature (Alfaro et al. 2008; Ali et al. 2010; Akhtaruzzaman et al. 2017; Bénassy‐Quéré et al. 2007) investigated FDI response to various types of institutional quality in FDI host countries. Over the last 20 years data evidenced that Korea’s OFDI flowed to developing countries with a sustained large gap existing in institutional quality between host countries and Korea (See, Fig 2 top panel); however; those countries had been offering a higher degree of capital account openness. A sharp increase in capital account openness since the early 2000s coincides with sharp increase in Korea’s OFDI to those host countries. For example, Peru was the least open economy and started to initiate measures to open capital account since the mid-90s and early 2000s. The degree of openness in Peru is now similar to that of developed countries. On the other hand, Peru is one of the least progressed countries in terms of institutional quality over the same period of time. This slow or no progress in institutional quality is a common pattern of institutional improvement for a large sample of host countries of Korea’s OFDI (see, Figure 2). However, those developing countries including Peru are regular destinations of a substantial amount of Korea’s OFDI. Does this suggest that institutional quality of host country does not matter to Korean investors, or is there a 3rd factor mitigating the impact of institutional quality on Korea’s OFDI? Few studies on Korea’s OFDI considered institutional quality of host country as a control variable instead of main determinant of FDI (Park and Jung 2020). However, existing studies do not explain why Korea’s OFDI flowed to countries with a large gap in institutional quality between Korea and host countries. This research fills the gap in the literature of Korea’s OFDI. The findings of this research suggest that high degree of capital account openness (a factor that ensures profit repatriation of investors) weakened the negative impact of poor institutional quality in host countries on Korea’s OFDI. The remaining of this paper is organised as follows. Section II reviews relevant literature of FDI and identifies major determinants for Korea’s OFDI from existing studies; Section III discusses research method and empirical issues; Section IV presents the research findings; Section V concludes the research, points to the research limitations, and provides policy recommendations.
Topic:: Economics, Foreign Direct Investment, Institutions, and Knowledge Economy
Political Geography:: Asia and South Korea

43. Analysis on the Determinants of Labor Share and Its Policy Implications

Author:: Yaein Baek, Minsoo Han, Wongi Kim, and Hyunsuk Kim
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: There has been a significant decline in the global labor share, leading to numerous studies about the cause of this drop. The labor share is used as one of the main indicators of inequality because a decrease in the labor share can lead to aggravation of income inequality. This is because low-skilled workers can be greatly affected by such a decline in the labor share and the main source of in-come for the low-income class, including the self-employed, is labor income. Among various indicators of inequality, this study analyzes the determinants of the change in labor share. Technological changes such as adoption of robots, advancements in information and communications technology (ICT) and the Fourth Industrial Revolution (4IR) are expected to change the labor market. Hence, this study analyzes the impact of technological changes on labor share and suggests policy responses.
Topic:: Economics, Science and Technology, Labor Issues, and Inequality
Political Geography:: Global Focus

44. Analysis of India's New and Renewable Energy Market and Policies and Implications for Korea-India Cooperation

Author:: Hyoungmin Han
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: The importance of new and renewable en-ergy has been drawing attention since the Paris Climate Agreement was adopted in 2015. In response to the Paris Climate Agreement, the Korean government declared carbon neutrality by 2050 and announced policy plans to create a low-carbon ecosystem in 2020. However, the domestic new and re-newable energy market is limited, making it difficult to mass-produce power generation devices. In addition, the international community's transition to a low-carbon ecosys-tem is rapidly taking place. To achieve 2050 carbon neutrality, it is necessary to secure Nationally Determined Contributions (NDC) through various overseas cooperation pro-jects. Thus, it is believed that energy cooperation with developing countries is needed to expand domestic markets and to achieve overseas NDC reduction targets. Considering India's recent market expansion and active policy in the area of renewable energy, India can be a good partner for Korea in the renewable sector. To have a clear understanding of India’s renewable energy market, we conduct the analysis on India’s renewable energy market and policy, which we will explore in this article.
Topic:: Climate Change, Treaties and Agreements, Renewable Energy, and Cooperation
Political Geography:: South Asia, India, Asia, and South Korea

45. Network and Text Analysis on Digital Trade Agreements

Author:: Kyu Yub Lee, Cheon-Kee Lee, Won Seok Choi, Jyun-Hyun Eom, and Unjung Whang
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: We use the Trade Agreements Provisions on Electronic Commerce and Data and their corresponding texts to undertake network and text analysis on trade agreements with digital trade chapters to identify which countries are important in the network and how similar or different their texts of digital trade chapters are. centrality values reflect which countries are influential in the network, while values of similarity assess the level of similarity between the texts of digital trade chapters concluded by these countries. Centrality and similarity are complementary in assessing the relative positions of countries in the network, where the number of linkages between countries is significant in centrality and the quality of digital trade chapters is critical in similarity. We interpret this to mean that a country with a high degree of centrality is likely to be a rule-promoter in the network, whereas a country with a high degree of similarity is likely to be a rule-maker. The brief highlights three key findings from network and text analysis of digital trade agreements: (1) The U.S. has been the best rule-maker but not the best rule-promoter, whereas Singapore has been the best rule-promoter but not the best rule-maker. (2) China is a rule-maker, but to a weaker extent than the U.S., and Korea is a rule-promoter, although it is less active than Singapore. (3) Japan and Australia have served as both rule-makers and rule-promoters. Identification of countries’ relative positions in the network of digital trade agreements would be useful at the start of talks on digital trade policy.
Topic:: Science and Technology, Treaties and Agreements, Digital Economy, and Trade
Political Geography:: Japan, China, South Korea, Australia, and United States of America

46. China's Green Transition Policies and Its Implications for Korea

Author:: Won Seok Choi
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: In China, carbon emissions from the energy and heat producing sector account for 53.4% of total emissions, with industry (28.6%) and transportation (8.9%) being the main carbon emission sectors. Therefore, various green transition policies in energy, industry and transportation are being pursued in Chinese cities. In Chinese cities, the promotion of rooftop-distributed photovoltaic power generation, among renewable energy sources, is evaluated to be capable of intensive development, reducing power peak load, and inducing residents to consume green energy. Policies are being implemented in urban industries to reduce pollution and carbon emissions, increase energy use efficiency, improve resource use levels, and improve green manufacturing systems. In the transportation sector, China's policies to reduce emissions, expand the supply of new energy vehicles, and strengthen green transportation technology are representative. Consequently, this study summarizes the policy implications, areas of Korea-China cooperation, and risk factors of China's green transition promotion plan for its Chinese cities.
Topic:: Transportation, Industry, Carbon Emissions, Energy, and Green Transition
Political Geography:: China, Asia, and South Korea

47. Strategies of Multinational Companies Entering China in the Era of U.S.-China Competition and Implications for Korea

Author:: Sang Baek Hyun, Ji Young Moon, Min-suk Park, Jonghyuk Oh, and Yunmi Oh
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: With the integration of resources and markets around the world sparked by the trend of globalization, multinational companies have continued to grow at a rapid pace. In particular, global manufacturers have maintained their competitiveness by distributing resources more efficiently while establishing a global value chain with China as their main production hub. However, measures taken by the U.S. to block China’s access to technology and supply chains in some high-tech industries have prompted discussions on reorganization of the global supply chain, placing these multinational companies in an uncertain situation concerning their operations in China. At a time when competition between the U.S. and China is intensifying, it is necessary to look at the response strategies of global companies that have entered China and seek effective countermeasures for Korean companies.
Topic:: Economics, Multinational Corporations, Manufacturing, and Competition
Political Geography:: China, Asia, South Korea, North America, and United States of America

48. Higher Renewable Energy Targets in Germany: How Will the Industry Benefit?

Author:: Gilles Lepesant
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Institut français des relations internationales (IFRI)
Abstract:: “Deutschland – Einstieg in die Deindustrialisierung?” – “Germany, the beginning of deindustrialisation?” asked the German economic newspaper Handelsblatt in the context of the spike in energy prices that has put at risk thousands of companies across Germany in 2022. Whereas some sectors such as steel, glass and chemicals have been seriously hit, the manufacturing industries operating in the areas linked to the energy transition (such as renewable energies and hydrogen production) should benefit from decisions taken to reach climate neutrality. Will the German industry benefit from the ambitious commitments agreed by the new coalition? The boom and bust of the solar sector in 2011 are a reminder that a strong internal demand does not necessarily translate into strong and resilient supply chains on the national territory. In the context of generous support schemes, several companies emerged in the 2000s benefiting from the strong demand for solar panels before being overwhelmed by Asian competitors. Nowadays, more than 90% of solar panels are imported from China. The level of ambition of the Federal government for the Energiewende has dramatically increased with the new coalition elected in 2021, the share of renewables to be reached in the power mix by 2030 being set at 80% (against 47% in 2022). The German wind industry has however been affected by a slowdown of the expansion of capacities, several rounds of onshore wind and solar auctions being in 2022 undersubscribed. The added value of the Energiewende in terms of job creation has been ambivalent so far. The country’s current industrial geography might be partly reshaped with the efforts made by northern and eastern States to deploy renewables and green hydrogen at large scale. Stakes are high for southern Germany since new spatial patterns are emerging in the automotive sector too. While Chinese competition in the solar and wind manufacturing sectors is tough, the Inflation Reduction Act has reinvigorated discussions around a stronger industrial policy.
Topic:: European Union, Electricity, Renewable Energy, Wind Power, Hydrogen, and Energy
Political Geography:: Europe and Germany

49. Rebooting the Entente: An Agenda for Renewed UK-France Defense Cooperation

Author:: Alice Billon-Galland and Élie Tenenbaum
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Institut français des relations internationales (IFRI)
Abstract:: The Franco-British Summit on March 10th, 2023, will mark a much-needed reset in bilateral cooperation, following years of strained relations. With a recently re-elected French president and a new British Prime minister, both sides are committed to making this summit a success and re-launching a positive agenda for bilateral cooperation. The summit, the first since Sandhurst in 2018, will focus on three key topics: migration, energy, and foreign policy. Defense cooperation will also be addressed, as it remains the cornerstone of the bilateral relationship, though it may take a less prominent part than on previous occasions. Rebooting the Entente: An Agenda for Renewed UK-France Defense Cooperation Download 1.38 Mo Several concrete topics for joint work should therefore be discussed and agreed, from strategic discussions on European security frameworks to joint operational deployments and capability projects. It is crucial to ensure that the symbolic reset of the bilateral relationship at the summit leads to a realistic yet ambitious defense roadmap, with concrete commitments and deliverables. As the Franco-British Summit approaches, defense cooperation remains the cornerstone of the bilateral relationship. As the war in Ukraine continues, it increases the rationale for resuming closer UK-France defense cooperation. Lessons needs to be drawn from the Lancaster House Treaties : overly ambitious and structuring plans are less likely to succeed than pragmatic, budget-conscious and ready-to-use projects. The need to prepare for high-intensity warfare opens new perspectives for capability development in all domains and for operational cooperation across the globe. This Briefing is part of a joint Chatham House-IFRI research project, the "Cross-Channel Strategic Dialogue", investigating prospects for UK-France defence and security cooperation.
Topic:: Defense Policy, International Cooperation, Bilateral Relations, and High Intensity Warfare
Political Geography:: United Kingdom, Europe, Ukraine, and France

50. Food Systems in the Pacific: Addressing Challenges in Cooperation with Europe

Author:: Celine Pajon
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Institut français des relations internationales (IFRI)
Abstract:: More frequent climate disasters, rising sea levels, the economic fallout of Covid-19 lockdowns, border closures, supply chain constraints, and the global impact of the war in Ukraine have aggravated the challenge of maintaining sustainable and resilient food systems for Pacific Island Countries (PICs). Food systems in PICs are of great importance due to their impact on the health and well-being of Pacific peoples, local livelihoods, and national economies. Between 50 and 70% of Pacific people depend on agriculture and fishing activities for their livelihoods. The Pacific is home to extensive crop biodiversity, and Pacific countries are developing unique value chains for markets and international supply. However, they also face unique challenges in realizing equitable benefits in the global food system. Additionally, the Pacific needs to tackle issues like malnutrition and non-communicable diseases. Urgent global and local action is needed to manage climate change and other risks and ensure resilient food systems. Europeans are also confronted with the global food crisis and are actively working with their Pacific partners to find and fund solutions to address current and future risks by investing in local sustainable food systems. This Briefing explains the complex issues at stake regarding food systems in PICs and explores ways to address these challenges, both at the local level and in cooperation with Europeans. This Briefing is based on discussions that took place during the webinar "Food Security in Times of Crisis: Connecting the Pacific and Europe," organized by the French Institute for International Relations (Ifri)'s Pacific Islands Program in partnership with the Pacific Community (SPC) on December 8, 2022. Contributions from panelists will, therefore, be highlighted.
Topic:: International Cooperation, Food, and Industry
Political Geography:: Europe, European Union, Oceania, and Pacific Islands

51. Imagining Beyond the Imaginary. The Use of Red Teaming and Serious Games in Anticipation and Foresight

Author:: Héloïse Fayet and Amélie Ferey
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Institut français des relations internationales (IFRI)
Abstract:: The Red Team Defence demonstrates the Ministry of the Armed Forces' desire to appropriate new foresight tools. Thus, brain games or serious games aim to bypass the weight of the military hierarchy, the standardisation of thoughts and cognitive biases in order to avoid strategic unthinking. In September 2022, The New York Times revealed that the successful Ukrainian offensive on Kharkiv had been prepared in a series of wargames conducted that summer. Given this success, further wargames have been undertaken with a view to a possible Ukrainian counter-offensive in the spring. This rise in the popularity of wargames, which come in various forms, is due to their ability to immerse participants in a situation, helping them to become aware of their strategic and tactical blind spots and to identify their own vulnerabilities by putting themselves in the enemy’s position. The ability to anticipate crises and foresee conflicts is essential in order to maintain the initiative and ultimately win out. Thus, the aim of defense foresight is to understand the different forms future wars might take (asymmetric, hybrid, high intensity), the weapons systems that may be employed (drones, high-velocity missiles), and the factors that could trigger them. The use of wargames or scenario analyses to facilitate anticipation and foresight goes hand in hand with changes in the relationship between military and political leaders and civilians, who no longer hesitate to hold the former to account when they have failed to foresee a crisis. The German sociologist Ulrich Beck thus refers to the paradox of a society that is keen to predict the future because of its aversion to risk and the fact that it is now much more difficult to foresee what might happen in the short term due to very rapid technological developments. The modern world generates both risks and progress, and the inability to foresee strategic ruptures carries significant political costs, which explains why politicians set so much store in anticipation and foresight. The initiatives launched by Florence Parly after being appointed French minister of the armed forces in 2017 included promoting experimentation in new cognitive tools. Beyond the issue of technology, the aim was to rethink information management within the ministry in order to make it more agile and cross-cutting. In addition to a significant budget allocated to innovation in the 2019–2025 Military Programming Law, the Ministry of the Armed Forces has drawn inspiration from methods often originating in other organizational cultures, such as start-ups and the private sector, in order to improve its creativity and accelerate its adoption of digital technology.
Topic:: War Games, Military, and Anticipation
Political Geography:: Europe, France, North America, and United States of America

52. Why the proposed Brussels buyers club to procure critical minerals is a bad idea

Author:: Cullen Hendrix
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: Concerned about critical mineral supply chains and its own strategic vulnerabilities, the European Union is advancing a buyers club to procure minerals critical to the clean energy transition, such as bauxite, cobalt, lithium, and nickel. The European Union is deeply dependent on imports of both raw and processed critical minerals and materials and thus highly exposed to global price volatility. The door appears to be open for the United States or other EU trading partners and like-minded countries to join this club. Decarbonization is not the only impetus behind the proposed Brussels buyers club. Both the European Union and United States view China’s dominance of critical mineral supply chains as a national security issue, because these minerals are key inputs to modern military technology. Hendrix agrees that supply chains for critical minerals desperately need widening to meet projected global demand and tackle climate change mitigation, but he warns that a purchasers club would not be a step in the right direction. A buyers club would be prone to free riding, set up distributive conflicts within the European Union, and reduce the share of climate mitigation benefits accruing to critical mineral–producing countries, many of which are developing and middle-income economies.
Topic:: Economics, National Security, European Union, Supply Chains, and Minerals
Political Geography:: China and Europe

53. Can the World Trade Organization be saved? Should it?

Author:: Alan Wm. Wolff
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: Heads of state, trade ministers, and academics have repeatedly called for reforming the World Trade Organization (WTO), the institution charged with the stewardship of the global trading system. The durability and worth of the WTO are being increasingly questioned despite the fact that by almost all objective measures, it has been a great success, with world trade growing much faster than global GDP over the last 75 years. However, past success does not guarantee future performance. This Policy Brief examines the institution’s most serious defects and the multitude of challenges it faces. It suggests the institution needs to evolve to reach broad-based international trade agreements, adding much needed new rules to the world trade rulebook and developing effective means to settle disputes that would render the rules of the system enforceable once again.
Topic:: Economics, International Trade and Finance, Treaties and Agreements, and World Trade Organization
Political Geography:: Global Focus

54. The international tax agreement of 2021: Why it’s needed, what it does, and what comes next?

Author:: Kimberly Clausing
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: In 2021, more than 135 jurisdictions agreed on transformative new international tax rules that would establish a minimum tax rate of 15 percent on multinational corporate income regardless of where it was reported. In December 2022, the European Union unanimously moved forward to implement this minimum tax, and other countries, including South Korea, Japan, Australia, Canada, and the United Kingdom, are also either implementing the tax or taking substantial steps toward implementation. In tandem, the United States should also reform its international tax system and adopt a stronger minimum tax. While the future of the international agreement is uncertain, it has important implications for the ability of governments worldwide to create tax systems that are administrable, fair, and efficient. The agreement also demonstrates important guiding principles for the future of multilateral cooperation on global collective action problems, including efforts to protect public health from future pandemics, address nuclear proliferation, and resolve territorial conflicts. US progress on international tax reform would enhance much needed international cooperation on these issues.
Topic:: Economics, Treaties and Agreements, Reform, European Union, and Tax Systems
Political Geography:: Europe and Global Focus

55. Economic sanctions against Russia: How effective? How durable?

Author:: Jeffrey J. Schott
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: Economic sanctions by Western democracies against Russia have not stopped the war and attacks on Ukrainian civilians. Together with continued economic and military support for Ukraine, however, sanctions are blocking Russian president Vladimir Putin from achieving his territorial objectives. Sanctions have contributed to a sharp compression of Russian imports; forced Russia’s military and industry to source from more costly and inefficient suppliers at home and abroad; and slowly begun to squeeze Russian government finances. The G7 countries must sustain and augment their efforts, including by confiscating frozen reserves of the Central Bank of Russia to help fund Ukraine’s reconstruction. G7 policymakers need to derive lessons from the current crisis about the utility of sanctions in conflicts between major powers. Maintaining coherent and coordinated sanctions against large and powerful target countries is critical for the effectiveness and durability of the policy. Deploying sanctions against such rivals also requires a long-term commitment to the implementation and enforcement of the trade and finance restrictions. Sanctions impose costs on both the target country and those imposing the sanctions, so Western policymakers need to offset those costs via domestic support or tax relief to sustain political support over time for sanctions in big power conflicts.
Topic:: Sanctions, Economy, Conflict, and Russia-Ukraine War
Political Geography:: Russia, Europe, Ukraine, and United States of America

56. Multilateral development banks are key to unlocking low-carbon investments in developing economies

Author:: Steven Fries
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: Over the next three decades, emerging markets and developing economies (EMDEs), and especially middle-income countries, are projected to account for much of the growth in global economic activity and energy use. While a decisive move to low-carbon technologies and energy efficiency would advance both their development goals and a stable climate, the countries have yet to fully tap this opportunity. The multilateral development banks (MDBs) are in a unique position to help lower barriers to low-carbon investments in EMDEs and unlock these sustainable development opportunities. Their differentiating governance, financial and technical capabilities, and financing instruments would enable MDBs to support the necessary business environment and energy reforms and to cofinance low-carbon and energy efficiency investments alongside other investors to reduce and manage risks.
Topic:: Development, Economy, Multilateralism, Investment, and Carbon Emissions
Political Geography:: Global Focus

57. Will China's impending overhaul of its financial regulatory system make a difference?

Author:: Martin Chorzempa and Nicolas Véron
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: China's reshuffle of its financial supervisory architecture announced in March, like previous changes, appears incremental rather than radical. It will not, however, resolve the main challenge hobbling China’s financial system, which is not linked to specific choices of supervisory architecture but rather to the unfinished transition from a state-directed to a market-based financial system and the way the Chinese Communist Party's pervasive role creates obstacles to good corporate governance of individual financial firms and to the independence of supervisory authorities. Too often, political authorities and sometimes the supervisors themselves intervene directly in financial firms’ decisions to allocate capital and credit, occasionally resulting in failures of risk control and risk management. The authors argue that Chinese reformers should aim at a clearer and more rigorous division of responsibilities, in which financial firms manage financial opportunities and risks, and supervisors are exclusively focused on their respective public policy mandates.
Topic:: Economics, Regulation, Finance, and Corporate Governance
Political Geography:: China and Asia

58. Non-economic loss and damage: closing the knowledge gap

Author:: International Centre for Climate Change and Development (ICCCAD)
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: International Centre for Climate Change and Development (ICCCAD)
Abstract:: Climate-related loss and damage is escalating, with many countries experiencing new forms of climate impact, of increasing intensity. The focus until now has been on calculating the economic repercussions of climate risk. Its wider impacts and resulting hidden costs of climate change — such as loss of cultural heritage — are less understood and harder to quantify. This knowledge gap on non-economic loss and damage, which is largely due to limited coordination around research and sparse evidence originating from the global South, urgently needs addressing. This briefing proposes a comprehensive approach for building the evidence base on non-economic loss and damage, particularly the creation of a Loss and Damage Research Observatory. This online platform will lay the foundations for a collaborative South–South–North community of practitioners, ultimately leading to informed policy on this critical area of climate action.
Topic:: Climate Change, Health, Displacement, Conservation, Indigenous, Resilience, and Biodiversity
Political Geography:: Global Focus

59. Scaling up locally led adaptation in Bangladesh: three action areas

Author:: International Centre for Climate Change and Development (ICCCAD)
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: International Centre for Climate Change and Development (ICCCAD)
Abstract:: Although highly climate vulnerable, Bangladesh in South Asia is known as a pioneer of climate change adaptation. Recent national policies have recognised the vital importance of community-based and locally led adaptation (LLA). Where LLA interventions have been used by international and national nongovernmental organisations (NGOs), they have proven to be both effective and widely accepted by local communities. Yet major gaps remain in implementing LLA nationally due to legislative, administrative and conceptual limitations. Meeting Bangladesh’s ambitious national targets will require better coordination within government and with NGOs, so that each can benefit from the other. Building on recent examples, this briefing showcases existing interventions that are replicable and scalable and presents three key action areas requiring further government support. The lessons are also relevant to LLA practitioners in Bangladesh and other Least Developed Countries.
Topic:: Climate Change, Development, Local, Community, Adaptation, and Capacity Building
Political Geography:: Bangladesh and South Asia

60. How Monarchies End

Author:: Stephen Grand
Publication Date:: 06-2023
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: In a new Scowcroft Middle East Security Initiative issue brief, “How Monarchies End”, Atlantic Council’s Nonresident Senior Fellow Stephen R. Grand flips the analytical script on the spate of notable publications covering “how democracies die.” Grand examines what happens when autocratic rule corrodes and what pushes it to ultimately crumble. Under what circumstances do kings and queens, emperors and caliphs, cease to rule — either because their throne is transformed into a more ceremonial post or because they lose power entirely? For the eight remaining Arab monarchs, the downfall of their former global peers offer critical insights and parallels. The issue brief examines these topics and provides strategies for managing challenges to power, as well as a series of lessons for Arab monarchs to consider.
Topic:: Politics, Reform, Monarchy, and Resilience
Political Geography:: Middle East and Gulf Nations

61. China’s subsea-cable power in the Middle East and North Africa

Author:: Dale Aluf
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: In a new Scowcroft Middle East Security Initiative issue brief, “China’s subsea-cable power in the Middle East and North Africa,” Aluf analyzes China’s campaign to make countries in the region more dependent on Chinese networks, while reducing its own dependence on foreign cables. For a country that seeks to alter the internet’s physical form and influence digital behavior while exerting supreme control over information flows, China’s growing presence in the Middle East and North Africa’s cable industry is significant because Beijing has the power to shape the route of global internet traffic by determining when, where, and how to build cables.
Topic:: Security, Diplomacy, Politics, Science and Technology, Partnerships, and Innovation
Political Geography:: China, Middle East, Asia, and North Africa

62. Holding the Islamic Republic of Iran accountable for atrocity crimes

Author:: Celeste Kmiotek, Alana Mitias, and Nushin Sarkarati
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: With little to no prospect for accountability within Iran’s domestic courts, victims and survivors of serious violations of international law are turning toward an increasing number of foreign jurisdictions—most commonly in Europe and North America, but also in Latin America, Africa, and other regions—to pursue justice for human rights violations carried out by the Islamic Republic of Iran. Under the principle of universal jurisdiction, certain domestic justice systems allow prosecutions in national courts for crimes committed abroad, regardless of the victim’s or perpetrator’s nationality. Universal jurisdiction stems from the concept that certain crimes are of such gravity that they harm the international community as a whole, so national courts outside the country where the violations took place may prosecute them to protect the international order. Although the crimes subject to universal jurisdiction provisions differ by state, they generally include crimes against humanity, torture, war crimes, and genocide. Limitations on universal jurisdiction also vary between states, however, as do the processes for filing complaints and procedures for investigations, trials, and appeals. As was shown by the trial and conviction of Hamid Noury in Sweden for his involvement in the massacre of Iranian political prisoners in 1988, national prosecutions of international crimes can be a fruitful avenue to justice for victims of the Islamic Republic. To this end, the Atlantic Council’s Strategic Litigation Project has compiled a guide to aid practitioners and independent investigators in navigating the legal systems of European states with the highest likelihood of prosecuting Iranian human rights violators. Focusing on five states—France, Germany, the Netherlands, Sweden, and Switzerland—this manual outlines the crimes and violations subject to universal jurisdiction, best practices for investigating and documenting crimes, and processes for requesting investigations and participating in prosecutions as a victim, witness, or NGO. For information that is beyond the scope of this manual, the annex includes printed resources to consult and organizations to contact for additional assistance.
Topic:: Diplomacy, Human Rights, Politics, Rule of Law, Accountability, Norms, Atrocities, Resilience, and Society
Political Geography:: Iran and Middle East

63. Harnessing allied space capabilities

Author:: Robert Murray, Tiffany Vora, and Nicholas Eftimiades
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: The United States’ vast network of alliances and partnerships offers a competitive advantage—this is especially evident in outer space. Often characterized as a global commons, space holds value for all humankind across commercial, exploration, and security vectors. As technological advancements trigger a proliferation in spacefaring nations, the United States and its allies and partners are confronted with new challenges to and opportunities for collective action. This series examines how US space strategy can recognize the comparative advantages of allies and partners in space and best harness allied capabilities.
Topic:: Security, Defense Policy, International Trade and Finance, National Security, Science and Technology, Space, Institutions, and Defense Industry
Political Geography:: Europe, Eurasia, Canada, United States of America, and Indo-Pacific

64. Integrating US and allied capabilities to ensure security in space

Author:: Nicholas Eftimiades
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: Over the last two decades, the world entered a new paradigm in the use of space, namely the introduction of highly capable small satellites, just tens or hundreds of kilograms in size. This paradigm has forever changed how countries will employ space capabilities to achieve economic, scientific, and national security interests. As is so often the case, the telltale signs of this global paradigm shift were obvious to more than just a few individuals or industries. Air Force Research Laboratory’s Space Vehicles Directorate began exploring the use of small satellites in the 1990s. The Air Force also established the Operationally Responsive Space program in 2007, which explored the potential use of small satellites. However, both research efforts had no impact on the US Department of Defense’s (DOD’s) satellite acquisition programs. The advancement of small satellites was largely driven by universities and small commercial start-up companies.1 The introduction of commercial and government small satellites has democratized space for states and even individuals. Space remote sensing and communications satellites, once the exclusive domain of the United States and Soviet Union, can now provide space-based services to anyone with a credit card. Eighty-eight countries currently operate satellites, and the next decade will likely see the launch of tens of thousands of new satellites.2 Commercial and government small satellites have changed outer space into a more contested, congested, and competitive environment. The United States has shared space data with its allies since the dawn of the space age.3 Yet it also has a history of operating independently in space. Other domains of warfare and defense policy are more closely integrated between the United States and its allies and partners. The United States has military alliances with dozens of countries and strategic partnerships with many more.4 In recent years, there have been calls to coordinate with, or even integrate allied space capabilities into US national security space strategy and plans. In this regard, the US government has made significant advances. However, much work needs to be done. There is pressure on the United States to act quickly to increase national security space cooperation and integration, driven by rapidly increasing global capabilities and expanding threats from hostile nations and orbital debris. This paper examines the potential strategic benefits to US national security of harnessing allied space capabilities and the current efforts to do so, as well as barriers to achieving success. The paper identifies pathways forward for cooperating with allies and strategic partners on their emerging space capabilities and the potential of integrating US and allied capabilities.
Topic:: Security, Defense Policy, NATO, National Security, European Union, and Space
Political Geography:: Russia, Europe, Canada, North America, and United States of America

65. Beyond launch: Harnessing allied space capabilities for exploration purposes

Author:: Tiffany Vora
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: The “United States Space Priorities Framework,” released in December 2021, confirmed the White House’s commitment to American leadership in space.1 Space activities deliver immense benefits to humankind. For example, satellite imaging alone is crucial for improvements in daily life such as weather monitoring as well as for grand challenges like the fight against climate change. Such breakthrough discoveries in space pave the way for innovation and new economies on Earth. Exploration is at the cutting edge of this process: it expands humankind’s knowledge of the universe, transforming the unknown into the supremely challenging, expensive, risky, and promising. US allies and partners accelerate this transformation via scientific and technical achievements as well as processes, relationships, and a shared vision for space exploration. By integrating these allied capabilities, the United States and its allies and partners set the stage for safe and prosperous space geopolitics and economy in the decades to come. However, harnessing the capabilities of US allies and partners for space exploration is complex, requiring the balance of relatively short-term progress with far-horizon strategy. Space exploration has changed since the US-Soviet space race of the 1960s. In today’s rapidly evolving technological and geopolitical environment, it is unclear whether the processes, relationships, and vision that previously enabled allied cooperation in space, epitomized by the International Space Station (ISS), will keep pace. Here, China is viewed as the preeminent competitor for exploration goals and capabilities—as well as the major competitor for long-term leadership in space.2 This development drives fears of space militarization and weaponization, prompting protectionist legislation, investment screening, and industrial policies that can disrupt collaboration among the United States and its key allies and partners.3 Further complication stems from the rise of commercial space, with opportunities and challenges due to the decentralization, democratization, and demonetization of technologies for robotic and crewed space exploration. This paper serves as a primer for current US space exploration goals and capabilities that will be critical to achieving them. It highlights arenas where US allies and partners are strongly positioned to jointly accelerate space exploration while also benefitting life on Earth. This paper concludes with recommended actions—gleaned from interviews with international experts in space exploration—for the US government as well as allied and partner governments to increase the number and impact of global stakeholders in space exploration, to remove friction in collaboration, and to guide the future of space toward democratic values.
Topic:: Security, Defense Policy, NATO, National Security, Science and Technology, European Union, Partnerships, and Space
Political Geography:: China, Europe, and Asia

66. The future of women in India: Barriers, facilitators and opportunities

Author:: Amita Vyas, Misha Iqbal, Capucine Querenet, Harris Samad, and Irfan Nooruddin
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: The barriers South Asian women face in the workforce are deep and intersecting, including but not limited to: accessing digital technology; disruptions to supply chains; the dual burden of managing eldercare and childcare; limited physical and mental health services; and the increased risk of gender-based violence (GBV). These are key obstacles to women’s labor force participation, and all were exacerbated by the COVID-19 pandemic. According to a joint report published by the International Finance Corporation and the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women), 35 percent of women entrepreneurs in India reported that they have suffered declining revenues due to COVID-19, and 72 percent of female small business owners in Sri Lanka reported experiencing difficulties accessing their usual financial services. The same report found that female job-loss rates resulting from COVID-19 are about 1.8 times higher than male job-loss rates globally. Women’s participation and advancement in the labor force not only benefits women themselves, but also men, families, communities, and the entire nation. Despite this, women’s work is a minefield of visible and invisible barriers, rooted in inequality, patriarchy, and privilege. Global corporations, civil society, governments, and businesses across the South Asian region and the globe are committed and poised to support women’s advancement in the workplace, and are well positioned to accelerate and complement these efforts through direct investments and advocacy. But, first, two key areas must be explored, and they serve as the foci for this issue brief: Raise awareness of key economic challenges facing women across the region. Explore best practices and opportunities for addressing these pressing challenges.
Topic:: Education, Women, Resilience, and Society
Political Geography:: South Asia and India

67. China in Sub-Saharan Africa: Reaching far beyond natural resources

Author:: Amin Mohseni-Cheraghlou and Naomi Aladekoba
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: This work empirically examines China’s growing footprint in Sub-Saharan Africa’s investment, trade, cultural, and security landscape over the past two decades. It highlights China’s increasing appetite for Sub-Saharan Africa’s natural resources and growing young labor force—identifying the region’s consumer market as an important destination for Chinese goods and services over the next few decades. The analysis identifies more than 600 Chinese investments and construction contracts in Sub-Saharan Africa (SSA), valued at over $303 billion, signed between 2006 and 2020. Four sectors attract 87 percent of China’s investment and construction in the region: energy at 34 percent; transport, 29 precent; metals, 13 percent; and real estate, 11 percent. This is very similar to the Middle East and North Africa Region, where the energy sector attracts close to 50 percent of China’s investment, followed by transport, 19 percent; real estate, 15 percent; and metals, 6 percent. In terms of trade, this work shows that between 2001 and 2020, China’s merchandise trade with the region increased by a whopping 1,864 percent—surpassing SSA’s trade with both the United States and the European Union. In other words, from 2001 to 2020, China’s share in total merchandise trade in SSA rose from 4 percent to 25.6 percent, while during the same period, the shares of the United States and the EU in SSA’s total trade declined by 10 percentage points and 8 percentage points, respectively. The report also takes a look at China’s arms trade with the region. Twenty-two percent of SSA’s arms imports are sourced from China, making China the region’s second-largest supplier of arms and military equipment, with Russia in the lead (24 percent). Finally, the report highlights the fact that the size of Chinese migrants in Africa is estimated at one to two million, with around one million permanently residing in the region. The largest numbers are in Ghana, South Africa, Madagascar, Zambia, and the Democratic Republic of the Congo.This work is the first in a series of empirical analyses that will be conducted on China’s presence in developing economies and low-income countries.
Topic:: Natural Resources, Economy, Business, Economic Growth, Macroeconomics, Trade, and Inclusion
Political Geography:: Africa, China, Asia, and Sub-Saharan Africa

68. How allied Sweden and Finland can secure Northern Europe

Author:: Anna Wieslander, Eric Adamson, and Jesper Lehto
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: NATO is approaching its ninth round of enlargement. The accession of Sweden and Finland—two solid democracies and defenders of the international-rules based order—into the Alliance will strengthen the core of the transatlantic community. Their NATO membership opens up new opportunities to bolster regional deterrence and defense in Northern Europe, increase transatlantic burden sharing, and secure the Alliance as a whole in ways not previously possible. This issue brief sets the stage by suggesting that the Alliance use the accession of Sweden and Finland to create an ambitious deterrence-by-denial “bubble” over Northern Europe. Such a strategy does not merely include military capabilities but must be underpinned by civil robustness and resilience that stretch across NATO territory. Operationally, allies in Northern Europe should prepare to assume greater responsibility as first responders in case of a severe security situation, below or at the level of Article 5. For this to succeed, political cooperation and agenda setting must intensify among Northern European allies.
Topic:: Security, Defense Policy, NATO, Alliance, and Resilience
Political Geography:: Finland, Sweden, and Northern Europe

69. Energy investment in a time of inflation

Author:: Charles Lichfield and Joseph Webster
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: High rates of inflation across the world are forcing central banks to reluctantly tighten monetary policy despite accompanying recession risks. Moreover, restricted credit access could jeopardize energy investments, particularly for capital-intensive clean energy projects, potentially rendering the world more vulnerable energy to price shocks, which are a significant contributor to the current crisis. This paper briefly considers the macroeconomic drivers of inflation in late 2022, including Russia’s war in Ukraine and uncertainties around energy supply, supply-chain resets, and lingering COVID-19 disruptions, before examining the persistent energy underinvestment of the past decade and how this has left markets exposed to varying degrees. As such, this paper also considers how private capital can accelerate cleaner energy adoption, suited to different markets’ unique conditions and needs. Borrowing costs will rise, but this doesn’t have to bring the transition to a standstill. With the Great Moderation of low volatility, interest rates, and inflation perhaps a relic of the past, assets offering inflation protection, such as infrastructure, may become increasingly attractive to investors. There is a fear that global inflation will sharply curtail energy investment into emerging markets. The fear is justified. Higher interest rates in developed markets mean higher rates of return which will lure emerging markets investors back to the US and Europe. Still, it’s not all bad news for emerging markets. Quasi-state actors like Pension and Sovereign Welfare funds are interested in very long term, high-yield projects—two criteria to which emerging market energy infrastructure correspond. Disruptions to interest rates and inflation, triggered in part by energy underinvestment, will cause disparate impacts in different markets. Inflation is not, perhaps, everywhere and always a monetary phenomenon. Energy investment faltered from 2014 to 2020, despite low interest rates. Meanwhile, aggregate supply shocks—first due to COVID, then from Putin’s invasion of Ukraine—have pressured energy production and prices, raising inflation and necessitating interest rate hikes. The consequences of persistent energy underinvestment are now becoming apparent. The need for new energy infrastructure cannot be met without private investment. This was the case when inflation was lower; it is even more important now.
Topic:: Environment, Markets, Oil, Governance, Gas, Economy, Investment, Inflation, and Energy
Political Geography:: Global Focus

70. Area C: From a Hub of the Israeli-Palestinian Conflict to a Space for “Creeping Peace”

Author:: Omer Zanany
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:: Area C of the Occupied Palestinian Territories is a key hub of the Israeli-Palestinian Conflict claimed by Israelis and Palestinians and left under temporary Israeli responsibility by the Interim Agreement (1995). For almost three decades, Israel has been reducing the Palestinian living space in the area and deepening its hold, managing all planning and building processes, expanding settlement areas and so-called “state lands” and demarcating “military zones” and “nature reserves” for itself. The collapse of the peace process also encouraged the Palestinian Authority (since 2009) to act unilaterally on the ground. While Israel has assumed a “piecemeal” approach and sees Area C as a vital space for settlement and security, the Palestinians have taken a “holistic” approach, viewing the area as a necessary space for a contiguous and sustainable state. The campaign currently being waged on the ground perpetuates friction and a bloody struggle over land and infrastructure, distances the chance of a stable Israeli-Palestinian agreement, prevents development and construction for Palestinians, poses a tangible danger to nature and the environment, and deepens humanitarian and legal challenges of population expulsion and relocation. Turning this important area into a foundation for Israeli-Palestinian progress requires two types of policies – a reactive policy in the short term to prevent further deterioration, and a long-term policy of practical cooperation. In light of the new radical right-wing government’s policy advocating the de facto annexation of Area C to Israel, the pro-peace camp must take preventive measures: promote a campaign to “unmask” the government’s moves and intentions and expose the dangers of annexation as a fatal blow to Israel’s identity, security, and political and economic standing; expand demonstrations in conjunction with the overall protest against the new government’s anti-democratic policies; file objections to settlement construction and to harmful measures against the Palestinians. Down the line, Israel and the Palestinians must abandon their “zero sum game” approach and instead formulate joint systemic planning and promote positive steps in Area C: approve outline plans for Palestinian construction that were already submitted to Israel for approval, prevent crime and piracy, and promote joint projects with international and Arab assistance. These include solar power fields, agricultural and food cultivation areas, water and wastewater treatment facilities, and industrial zones. Advancing these measures without a political horizon will result, at most, in some specific improvement. On the other hand, advancing measures with a view to a political settlement – including the transfer of parts of Area C to the Palestinian Authority (PA) and the advancement of a comprehensive economic plan for the Palestinians – will lead to a real change, strengthen Palestinian ability and motivation to prevent terrorism, and make it possible to gradually advance the two-state vision based on the “Creeping Peace” strategy.
Topic:: Occupation, Conflict, Peace, and Peacebuilding
Political Geography:: Middle East, Israel, and Palestine

71. Building Resilience? The Cybersecurity, Economic & Trade Impacts of Cloud Immunity Requirements

Author:: Matthias Bauer
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: EU Member States should call on the EU’s Cybersecurity Agency (ENISA) and the European Commission to abandon immunity requirements in the proposed EU Cloud Certification Scheme (EUCS). With immunity requirements in the EUCS, the EU risks opening a Pandora’s box, paving the way for data localisation, foreign ownership restrictions, and local establishment requirements in digital industries globally leading to rising trade tensions. ENISA’s current proposal could increase policymakers’ appetite for data localisation in the EU. It would empower the European Commission and Member State authorities to exclude foreign businesses from domestic cloud services markets and set a dangerous precedent for any data-intensive sector. The list of “sectors of high criticality” could be logically extended to both existing services (e.g., financial services) and to new technologies and business models, such as IoT in the energy and healthcare sectors, and autonomous driving in the transport sector. Non-EU jurisdictions would be pressured to respond in kind. EUCS immunity requirements would increase cloud adopters’ exposure to cybersecurity risks. Data localisation often creates obstacles to an integrated management approach towards cybersecurity risks. Country of headquarter and foreign ownership restrictions in the proposed EUCS risk removing global frontier cybersecurity technologies from Member State markets. Excluding these and other EU and non-EU companies from EU Member States could result in a long-lasting security deficit of EU cloud adopters vis-à-vis organisations that are still able to use reliable and often best-practice cloud services offered by providers from outside EU Member States. Immunity requirements in the EUCS are discriminatory by design. They could provoke retaliatory measures by EU trading partners, either unilaterally or through WTO or bilateral FTA (e.g., UK-EU) Dispute Settlement. Local establishment requirements and foreign ownership restrictions would by design discriminate against foreign cloud providers. US-headquartered companies, which currently serve more than 75% of the EU market, would be most affected by EU immunity requirements.[1] Depending on US preferences and the scope of the proposed EUCS, the EU could be subject to retaliatory tariffs of up to USD 12 billion worth of EU goods exports or equivalent restrictions for EU services exports to the US. Other governments could lodge complaints via the WTO as well (e.g., Singapore, Japan, Canada and others, where cloud development is advancing rapidly). EU suppliers are currently in no position to manage a broad-based transition to cloud, and thus such requirements would delay significant efficiency and security gains that current foreign suppliers could offer. A blanket exclusion of non-EU cloud vendors would also likely undermine Europe’s objective to achieve a 75% cloud adoption rate for EU enterprises. Sensitive European businesses and public sector organisations would have to delay migration and make do with legacy systems for a very long time. Contrary to large countries, these negative impacts would be much more pronounced for smaller EU Member States, which lack the presence of large domestic incumbents and generally rely much more on an open international trading regime for digital services. ENISA’s cloud certification scheme should be limited to technical and transparency requirements. Immunity requirements for non-personal data should be addressed in bilateral initiatives such as the EU-US Trade and Technology Council (TTC) or agreements requiring a company that sought to offer services of the highest level of sensitivity to be headquartered in a country granted adequacy with EU data protection rules, or a country that is an adherent to the OECD’s Trusted Government Access principles, or (concerning the US) a participant in the upcoming Trans-Atlantic Data Privacy Framework. Excluding foreign companies from operating in the EU would have far-reaching consequences. If that is the intent, it should require a sound legal analysis and the decision should be taken through a formal legislative procedure at the EU level.
Topic:: Economics, Markets, European Union, Cybersecurity, Digital Economy, Trade, and Resilience
Political Geography:: Europe

72. The Economic Dividend of Competitiveness

Author:: Fredrik Erixon, Oscar Guinea, Philipp Lamprecht, Elena Sisto, and Erik van der Marel
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: In a world of technological and economic rivalry, the EU must devote increased attention to its competitiveness. Higher levels of competitiveness will help the EU build a more prosperous economy which will in turn produce innovation and resources to address the great challenges of our time. ECIPE published a study presenting a competitiveness compass with concrete policy recommendations that will improve EU’s competitiveness. These policy recommendations, once implemented, will bring tangible benefits to the EU economy in the form of higher levels of trade and productivity. This report presents five scenarios in which the EU pursues competitiveness policies that lead to higher economic growth.
Topic:: Economics, Science and Technology, European Union, Economic Growth, and Competition
Political Geography:: Europe

73. Building a Mature UK Trade Policy

Author:: David Henig
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: Global Britain has not delivered according to the hopes expressed by supporters of leaving the EU. Trade with the rest of the world has not grown to make up for leaving a bloc with seamless trade, early Free Trade Agreements with Australia and New Zealand are of minor economic significance, and it is hard to discern much of a strategy beyond completing a few more similar deals. Meanwhile the world of trade policy is transformed since 2016, negatively. The US has essentially declared its national interests to be more important than global rules, while the EU wants to act unilaterally as the global regulator. In both, the climate crisis is being used as an excuse to reintroduce protectionist measures threatening economic damage and global stability. Expectations of what a UK outside of the EU could achieve were exaggerated, but nonetheless the country could be doing a lot better in its trade policy. There is no good reason for such tensions as exist with a broad range of frustrated stakeholders, the absence of clear purpose on UK strengths such as services, or the defensiveness that seemingly takes pride in secrecy and resistance to proper scrutiny. Adjustment time was inevitable, but six years should have been enough.
Topic:: Economics, European Union, Free Trade, and Trade Policy
Political Geography:: United Kingdom and Europe

74. Reforming Standard Essential Patents: Trade, Specialisation, and International Jurisprudence

Author:: Fredrik Erixon and Oscar Guinea
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: The European Commission is considering a radical overhaul of the system governing Standard Essential Patents (SEPs). A leaked proposal suggests that the Commission wants to take control over the registration of SEPs, take efforts to regulate their essentiality, and intervene in negotiations over royalty rates if parties do not come to an agreement. The underlying assumption is that such a system will benefit SEP implementers and the European economy, and that the common holders of SEPs will be cut down a size or two. The logic behind this policy is that, since there are more SEP implementers than holders, any change in favour of implementers will have a net positive effect on the EU economy. However, this is doubtful. The EU is a R&D powerhouse for many of the technologies protected under SEPs and since most of the global production of the goods using these technologies is done outside Europe, the EU is a net exporter of innovation and a receiver of revenues from the licensing of these technologies. Using data on trade, specialisation, and market revenues, this paper comes to a different conclusion: the EU economy is likely to be a net loser if the balance between holders and implementers is changed. Moreover, there is a general and fundamental interest for Europe to preserve a system of standards and SEPs that allows it to punch above its weight in international policies and practices in standards and patents.
Topic:: Reform, European Union, Trade, Patents, Specialization, European Commission, and Jurisprudence
Political Geography:: Europe

75. Trade and Competitiveness: Putting the Firm at the Centre of the Analysis

Author:: Lucian Cernat and Oscar Guinea
Publication Date:: 06-2023
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: The European Commission published its communication for the long-term competitiveness of the EU. Trade and Open Strategic Autonomy were among the selected policy areas that will drive EU competitiveness in the future and trade with the rest of the world as a share of EU Gross Domestic Product (GDP) was the selected indicator to measure progress. This Policy Brief proposes a new set of indicators that complement this and similar indicators that focus on the value of trade. Using the Trade by Enterprise Characteristics (TEC) database, this paper produces indicators that measure the number of exporters, non-EU suppliers, non-EU customers, and foreign companies. By putting the firm at the centre of the analysis, these indicators offer insights that complement policy-makers’ views on trade and competitiveness.
Topic:: European Union, GDP, Trade, Strategic Autonomy, European Commission, Economic Competition, and Competition
Political Geography:: Europe

76. Potential and Pitfalls for African Industrialization in Chinese-built Standard Gauge Railways

Author:: Yunnan Chen
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:: Railway development has been a key feature of transport infrastructure investments in several African economies, with several new standard gauge railways (SGR) built in the last ten years in Ethiopia, Nigeria, and Kenya. These planned projects have also entailed substantial Chinese involvement through construction contractors, in financing, and in the operations and management, becoming part of the wider Chinese discourse of the Belt and Road Initiative (BRI). They also have significant potential in supporting the industrialization plans of African states, and in some cases, have been explicitly linked to plans for a green transformation. This brief draws from case studies across Africa with a focus on Ethiopia, to highlight the significant potential of railway investments as a low-cost, low-carbon transport for green industrialization, but also its pitfalls and challenges as an infrastructure for governance, and local technology transfer.
Topic:: Development, Belt and Road Initiative (BRI), Industrialization, and Railways
Political Geography:: China and Africa

77. Electric Vehicles and the Changing Automotive GVC: A Window of Opportunity for African Countries?

Author:: Tobias Wuttke
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:: Only two African countries have successfully integrated with the automotive GVC to date: South Africa and Morocco. Their experiences, compared to other even more successful developing and emerging economies with automotive industries, highlight both the opportunities as well as the limitations of automotive GVC participation as an economic development engine. Scale in vehicle production, facilitated by government industrial policy, is the key prerequisite for successful participation with localisation benefits. These fundamentals do not change with the shift to electric vehicles. Governments in Africa and elsewhere need to attract FDI in electric vehicle production and from there can support the development of a local component and materials value chain. Once these basics are covered, governments and local firms can aim for making use of the technological window of opportunity by investing in EV-related technology, mainly battery technology, to potentially capture more value from automotive GVC participation than has traditionally been possible in the ICE vehicle value chain.
Topic:: Development, Industrial Policy, Foreign Direct Investment, Global Value Chains, Automotive Industry, and Electric Vehicles
Political Geography:: Africa

78. Current Capabilities and Future Potential of African Textile and Apparel Industries

Author:: Lindsay Whitfield and Chema Triki
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:: The textile and apparel industry is a globalised industry characterised by a high degree of dependency and fragmentation in global supply chains. From the mid-20th century, cotton textile and apparel manufacturing production relocated from industrialised to developing countries, particularly in Asia, and was quickly followed by the emergence of the petrochemical industry and synthetic fibre production in East Asian countries, while South Asia continued to focus on cotton and natural fibres. China, Bangladesh, and Vietnam are currently the central players in global apparel supply chains, with China and increasingly Vietnam having vertically integrated industries with access to a diverse range of fabrics and thus a large product portfolio. The largest apparel consumer markets are concentrated in Europe, North America, and other wealthy countries such as Japan, as they have higher purchasing power and economically larger markets. Large emerging economies such as China and India largely supply their domestic markets but have not yet become major destination consumption markets for other developing economies. Changes in international trade over the past 30 years fostered the textile and apparel global value chain dynamic. These changes were marked by opening trade borders, lowering tariffs, tax breaks or subsidies offered by various governments, and free trade agreements. Low labour costs and lower production costs have shaped the decisions of global actors to relocate their operations from one country to another. Current global trends are set to transform the global value chains of textiles and apparel again. These trends include increasing production costs in China, the drive to shorten supply chains post-Covid pandemic through nearshoring and seeking countries with yarn-to-garment (or vertical) production capabilities, and a sustainability shift. These trends are leading global apparel buyers to diversify their sourcing away from China and Asia more generally and to consider new supply bases. These structural trends in the industry, together with the AfCFTA, represent a window of opportunity for African countries. African industry actors and their governments should build new textile and apparel industries that seek to participate in global and regional markets and engage with global technologies and international partnerships. Attracting foreign firms with the necessary technical, organisational, and managerial capabilities is essential. The AfCFTA represents a powerful tool to respond to the verticality need of the industry, considering the current production levels of raw materials, but also an opportunity to increase the number of African countries with industrial capabilities in textile and apparel. The ongoing negotiations on rules of origin will significantly impact the continent's potential to create synergetic regional value chains.
Topic:: Development, Industrial Policy, International Trade and Finance, Business, Supply Chains, and Textile Industry
Political Geography:: Africa

79. Climate Change Mitigation for Late Industrialisers: The Role of Technology Intensity in Manufacturing

Author:: Elvis Korku Avenyo and Fiona Tregenna
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:: Many developing countries now have a renewed focus on industrialisation and industrial policy. This is based on the recognition that industrialisation is a key driver of long-term economic progress and is the central route to improve the well-being of citizens in developing countries (Chenery, 1955; Tregenna, 2016; United Nations Industrial Development Organization [UNIDO], 2016). At the same time, the climate crisis poses an existential threat to the global economy and to humanity and has emerged as a challenge to the industrial development prospects and pathways of developing countries. This is because industrialisation is an important contributor to global warming, specifically to anthropogenic emissions of cardon dioxide (CO2.) (Adom et al., 2012; Han & Chatterjee, 1997). Late industrialisers thus face a dual challenge: industrialising while mitigating climate change (Altenburg & Rodrik, 2017). Hence, there is now a degree of tension as to how late industrialisers can achieve long-term economic development under paths involving heavy or intensive industrialisation, while mitigating emissions and environmental damage more broadly. An emerging discourse recognises the critical need for developing countries to push towards industrial development that, while generating growth in productivity and jobs, is also environmentally sustainable. This is especially important, as poorer countries are particularly vulnerable to the immediate effects of the climate crisis (Altenburg & Rodrik, 2017; Padilla, 2017). Thus, transforming towards sustainable production systems and green industrial policies offers developing countries opportunities to industrialise in an environmentally sustainable way while contributing to job creation and economic prosperity (Altenburg & Rodrik, 2017; Padilla, 2017; Rodrik, 2014). However, the high ‘green premia’ and new access barriers to the ‘green’ energy technologies from advanced economies directly threaten this potential sustainable industrial development pathway in developing countries.
Topic:: Climate Change, Development, Science and Technology, Manufacturing, Industrialization, Sustainability, and Carbon Emissions
Political Geography:: Global Focus

80. Security at Sea: A Turning Point in Maritime

Author:: Scott Tait
Publication Date:: 06-2023
Content Type:: Policy Brief
Institution:: University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:: Since the end of the Second World War, the United States has been the pre-eminent naval power and ultimate guarantor of global maritime security. It has also been one of the primary beneficiaries of the global maritime economic system, which in turn resourced its naval strength and increased the incentive to use that strength to protect the freedom of the seas. But a number of global changes, all likely beyond the United States’ control, are driving new dynamics in both security and economics in the maritime domain. These challenges include the return of great power competition at sea, the maritime consequences of climate change, increased pollution, the rapid rise of illicit trade and resource exploitation, and the erosion of maritime governance. These challenges are dynamic and inter-related—a change in one will often drive second and third order changes in the others. The United States has proven historically to be resilient and adaptive in the face of great challenges, and the maritime community has traditionally been a leader in innovation, collaboration, and positive-sum solutions. To meet the challenges of today and tomorrow, the United States should double down on those strengths, and work with allies to maintain and strengthen the rules-based international maritime system. Moreover, the United States should be a leader in envisioning changes to that system that will ensure it equitably meets the needs of all, accounts for the changes being driven by climate change and pollution, and anticipates a near-term future where autonomous systems will play a major role in the ecosystem.
Topic:: Security, Environment, Science and Technology, United Nations, and Maritime
Political Geography:: North America and United States of America

81. Is the Pursuit of Nukes Driven by Leaders or Systems?

Author:: So Yeon (Ellen) Park
Publication Date:: 06-2023
Content Type:: Policy Brief
Institution:: University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:: Nuclear weapons are widely regarded as one of the most lethal aspects of military arsenals ever created. As such, international relations and security experts have long been concerned about their proliferation. To prevent the spread of nuclear weapons, both policymakers and academic researchers have focused on what are commonly thought to be the primary drivers of proliferation: security concerns and domestic politics and economies. This brief examines another important driver: the role of national leaders themselves. Based on a study of 1,400 leaders in office between 1945 and 2000, author Ellen Park shows that leader personality and experience drive decisions about whether—or not—to pursue nuclear weapons, a finding that holds true across countries (rather than being limited to a few unique cases). Put simply, the pursuit of nuclear weapons is systematically influenced by certain attributes of leaders, such as college major, socioeconomic background, and military and international experience. To predict when and where the spread of nuclear and other emerging technologies will emerge next, policymakers should promote interdisciplinary dialogue to cultivate leader profiles and expand their use.
Topic:: Security, Arms Control and Proliferation, Nuclear Weapons, and Leadership
Political Geography:: Global Focus

82. Action for Peacekeeping Plus (A4P+): An Update on Monitoring and Implementation after Two Years

Author:: Daniel Forti
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: International Peace Institute
Abstract:: The UN secretary-general launched Action for Peacekeeping Plus (A4P+) in March 2021, three years after introducing the Action for Peacekeeping (A4P) initiative. A4P+ was conceptualized as a two-year implementation strategy for A4P that prioritizes urgent challenges facing UN peacekeeping. To monitor progress toward achieving these priorities, the UN has developed the A4P+ Plan and the A4P+ Monitoring Framework with specific results, deliverables, and indicators. To date, the UN Department of Peace Operations (DPO) has published two reports assessing the implementation of A4P+ and the impact of these efforts on UN peacekeeping operations. This issue brief takes stock of the monitoring and implementation of A4P+ over the past two years. It begins by explaining the A4P+ priorities and tracing their emergence out of the A4P initiative and Declaration of Shared Commitments. It then discusses highlights from the A4P+ Plan and the two progress reports published as of March 2023 and examines the benefits and limitations of current approaches to monitoring and implementing A4P+. The paper concludes that moving forward, UN officials will need to balance ambitious goals for progress with realistic expectations about what peacekeeping operations can achieve, and when. The UN will also have to decide whether to extend the current set of A4P+ priorities beyond 2023. Ultimately, while A4P+ can help grease the machinery of UN peacekeeping, its long-term impact will depend on member states delivering on their existing political, operational, and financial commitments.
Topic:: United Nations, Peacekeeping, and Monitoring
Political Geography:: Global Focus

83. Accountability for Crimes against Peacekeepers

Author:: Agathe Sarfati
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: International Peace Institute
Abstract:: Since 1948, more than 1,000 UN personnel have been killed in malicious acts while serving in UN peacekeeping operations. Since 2013, the vast majority of fatalities have taken place in the Central African Republic (CAR), Mali, and the Democratic Republic of the Congo (DRC). To address this trend, the UN Secretariat and member states have increasingly focused on strengthening the policy framework on accountability to peacekeepers. They have also increasingly focused specifically on how to pursue justice for peacekeepers who have been victims of attacks. This paper focuses on advancing justice for crimes against peacekeepers as one aspect of the overall effort to enhance accountability to peacekeepers. It provides an overview of the role of UN peacekeeping operations in investigating and prosecuting crimes against peacekeepers and the UN’s growing focus on advancing and prioritizing accountability for these crimes. It then examines case studies of criminal cases supported by the UN missions in CAR (MINUSCA), Mali (MINUSMA), and the DRC (MONUSCO) in their respective host states and provides an overview of cross-cutting challenges they have faced. The paper concludes with recommendations to help the UN Secretariat, peacekeeping operations, the Security Council, and other member states accelerate the investigation and prosecution of crimes against peacekeepers in a consistent and balanced manner: The UN Secretariat should maintain a comprehensive approach to accountability, develop a common definition of crimes against peacekeepers, ensure that host states adhere to human rights standards when engaging with those accused of crimes against peacekeepers, and improve internal and external coordination in this area. UN missions should pursue a comprehensive approach to accountability, continue to support host-state investigations and prosecutions of those accused of crimes against peacekeepers, advocate for host-state authorities to pursue accountability, and ensure sustained documentation of and follow-up on cases. The Security Council should reinforce peacekeeping mandates to build the host state’s capacity to pursue accountability and encourage legal clarity on the nature of crimes against peacekeepers. UN member states should use the group of friends to offer new ideas on ways to promote accountability and use the Special Committee on Peacekeeping Operations to discuss ways to improve coordination in this area.
Topic:: Crime, United Nations, Peacekeeping, and Accountability
Political Geography:: Global Focus

84. Peacekeeping in Nonpermissive Environments: Assessing Troop-Contributing Countries’ Perspectives on Capabilities and Mindsets

Author:: Fiifi Edu-Afful
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: International Peace Institute
Abstract:: Many peacekeepers are deployed in areas where ongoing armed conflicts or other situations of violence, including attacks against peacekeepers, have constrained their capacity to implement their mandate and protect themselves. This has led some troop-contributing countries (TCCs) to raise concerns about the high-risk environments to which their troops are deployed. One of the most critical issues when deploying troops to nonpermissive environments is ensuring they have the right capabilities and mindset. This paper interrogates TCCs’ perspectives on capabilities and mindsets and explores their implications for peacekeeping policy and practice. The goal is not only to deepen understanding of the UN’s progress on implementing the A4P+ priorities but, more importantly, to assess the state of play of peacekeeping in nonpermissive environments, drawing on the diverse perspectives of TCCs. The paper concludes by considering how capabilities and mindsets relate to accountability for and accountability of peacekeepers. Failure to properly train, equip, and support troops being deployed to nonpermissive environments raises questions about whether the UN and TCCs are accountable to peacekeepers. Likewise, it is unclear to what extent peacekeepers should be held accountable for their performance when they have not been provided the proper equipment, training, and mindset.
Topic:: Environment, United Nations, Peacekeeping, and Armed Conflict
Political Geography:: Global Focus

85. Forced Marriage by Non-state Armed Groups: Frequency, Forms, and Impact

Author:: Phoebe Donnelly and Emily Myers
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: International Peace Institute
Abstract:: Many non-state armed groups use forced marriage during armed conflict. This practice has been documented across all geographic regions, in every decade since the 1940s, and across armed groups with many different ideologies. Yet while policymakers, scholars, and practitioners recognize forced marriage as an important form of conflict-related sexual violence (CRSV), there are no frameworks for conceptualizing the frequency and range of forms of forced marriage that occur in conflict. To fill that gap, this paper introduces an original dataset tracking forced marriage in armed conflict and uses the data and illustrative examples to divide forced marriage in armed conflict into three types: member–member forced marriage, member–civilian forced marriage, and civilian–civilian forced marriage. This dataset can be a tool for policymakers and practitioners to understand the impacts of forced marriage in armed conflict and better design prevention strategies and survivor-centered responses. The report concludes with an overview of existing policy, legal, and programmatic responses to forced marriage in conflict settings, including by non-state armed groups, and provides recommendations for how these responses can better address this complex phenomenon: Data collection: Disaggregate data on CRSV by the form of violence (when possible), avoid linking sexual slavery and forced marriage, and gather more data on the unique needs of survivors of forced marriage. Criminal accountability: Continue prosecuting forced marriage as a distinct crime against humanity and promote the inclusion of forced marriage as a distinct crime against humanity during negotiations on the treaty on crimes against humanity. Sanctions: Continue to include information on CRSV in the reports of sanctions monitoring committees, ensure that sanctions listing criteria are applied against perpetrators of forced marriage, and ensure that every panel of experts includes at least one member with expertise on gender issues or CRSV. Reintegration: Factor the different types of forced marriage into the design of reintegration programs and provide support that considers the unique needs of individuals exiting forced marriage.
Topic:: Security, Armed Forces, Women, Peace, Armed Conflict, and Forced Marriage
Political Geography:: Global Focus

86. Financing Loss and Damage at Scale: Toward a Mosaic Approach

Author:: Michael Franczak
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: International Peace Institute
Abstract:: The historic decision on loss and damage (L&D) at the 2022 UN Climate Change Conference (COP27) calls for a new fund and funding arrangements focused on addressing L&D. It also tasks a Transitional Committee to prepare recommendations on the new fund and funding arrangements for adoption at the 2023 UN Climate Change Conference (COP28) in Dubai. This decision reflects a recognition that existing funding arrangements are grossly inadequate to address the escalating scale of L&D. Addressing L&D will require both enhancing these existing arrangements and creating a new fund and funding arrangements, forming a mosaic of solutions across countries, institutions, and markets. This paper aims to aid the Transitional Committee and other stakeholders by providing an initial sketch of that mosaic. First, it examines existing arrangements, modalities, and sources of funding for addressing L&D from UN humanitarian agencies, multilateral development banks and international financial institutions, and insurance and bond markets. Second, it proposes reforms to existing arrangements that would address key finance gaps and bottlenecks. Third, it identifies elements of a new L&D fund that would complement existing arrangements and make use of innovative finance (including levies and bond issuances) to operate at scale. With roughly six months left until COP28, the Transitional Committee will need to work efficiently to achieve its mandate, which includes determining the fund’s institutional arrangements, modalities, structure, governance, sources of funding, and coordination and complementarity with existing funding arrangements. To this end, the paper recommends that it should: Begin securing financing before COP28, particularly innovative financing, which takes longer to secure than traditional donor contributions; Consult with the private sector to determine its role, including in the use of insurance mechanisms and risk pools, frontloading, and connections between L&D and jobs; Determine the form and role of triggers, including for slow-onset events; Consider how to address noneconomic losses, including displacement and forced migration; and Identify the actions, mechanisms, and institutions required to operationalize the fund, including an internal or external coordination mechanism.
Topic:: Climate Change, Development, United Nations, and Finance
Political Geography:: Global Focus

87. The UN’s Response to the COVID-19 Infodemic

Author:: Gabriel Delsol and Albert Trithart
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: International Peace Institute
Abstract:: The COVID-19 pandemic has been accompanied by a related “infodemic.” This infodemic emerged as widespread demand for information about the public health emergency was met with large volumes of false and misleading information. Many of the national and international institutions leading the response to the COVID-19 pandemic, including the UN, quickly recognized that they also needed to respond to the infodemic. This led to a quick, broad-based response by a broad array of UN agencies and partners. To date, however, there has been no systematic mapping or assessment of the range of initiatives across the UN system. To begin filling that gap, this paper provides an overview of the UN system’s response to the COVID-19 infodemic across four areas: monitoring harmful information related to COVID-19; dispelling false information and providing authoritative information; building information resilience; and setting the agenda. It then assesses some of the successes and challenges of the response across four areas: external partnerships, including with governments, civil society, academia, and social media companies; coordination within the UN system; financial, human, and technological capacity; and impact assessment. The report concludes that the UN’s infodemic response finds itself at a pivotal point: Due to donor fatigue around COVID-19, funding for the infodemic response is falling even while the need for a robust infrastructure to address infodemics and other information disorders may be increasing. UN entities working to address the infodemic and other information disorders should therefore consider the following: Engaging in a consultative process to develop a shared understanding of the infodemic by defining its specific harms in relation to each of their mandates; Sustaining and building capacity to counter infodemics and other information disorders, both in communications departments and in other sections working on infodemic management; Adopting a more standardized, system-wide approach to the use of new technologies and engagement with technology platforms; and Continuing to strengthen long-term information resilience by building the capacity of governments to manage infodemics and supporting strong, independent media.
Topic:: Health, Science and Technology, United Nations, and COVID-19
Political Geography:: Global Focus

88. The EU can manage without Russian liquified natural gas

Author:: Ben McWilliams, Giovanni Sgaravatti, Simone Tagliapietra, and Georg Zachmann
Publication Date:: 06-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The European Union has committed to eliminate all Russian fossil-fuel imports by 2027. Progress has been made, with sanctions on oil and coal already introduced. The glaring exception is natural gas, on which the EU has so far refrained from imposing limitations, owing to greater dependence on Russia. Nevertheless, pipeline gas imports have fallen by four-fifths following Russia’s weaponisation of gas supplies. However, Russia’s exports of liquified natural gas (LNG) to the EU have increased since the invasion of Ukraine. The EU needs a coherent strategy for these LNG imports. Our analysis shows that the EU can manage without Russian LNG. Anticipated impacts are not comparable to those felt in 2022 as Russian pipeline gas dried up. The regional impact would be most significant for the Iberian Peninsula, which has the highest share of Russian LNG in total gas supply. Meanwhile, the global LNG market is tight, and we anticipate that Russia would find new buyers for cargos that no longer enter Europe. We discuss the options available to the EU. Wait-and-see implies delaying any action until 2027, while soft sanctions would discourage additional purchases but not break long-term contracts. We argue instead for an EU embargo on Russian LNG, to reduce exposure to an unreliable and adversarial entity, and to limit the extent to which EU consumers fund the Russian state. The embargo may be designed to allow purchases only if they are coordinated via the EU’s Energy Platform, with limited volumes and below market prices. This could be accompanied by the implementation of a price cap on Russian LNG cargos that use EU or G7 trans-shipment, insurance or shipping services.
Topic:: European Union, Gas, Energy, and Green Economy
Political Geography:: Russia and Europe

89. Can Chinese growth defy gravity?

Author:: Alicia Garcia-Herrero
Publication Date:: 06-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: Chinese growth, astounding since the beginning of the reform era, has slowed in the last decade. We offer a baseline estimate (based on the current trend) of China’s medium-term growth rate, which we project to fall to 2.4 percent by 2035. Several factors create uncertainty around this baseline. China’s rapid aging is already incorporated into our long-term growth scenario, but its impact on growth will depend on how China’s remaining urbanisation process spreads over time, how the shrinking labour supply affects labour productivity and whether the decline in total factor productivity growth, reflecting the lack of reform during the last decade and possibly the rising role of the state, can be reversed. Investment in China, for decades the largest factor in China’s growth, is expected to contribute less to growth given the increasingly low return on assets, particularly on state-led investment. The rapid piling up of public debt is also becoming a heavy burden for the Chinese economy. Finally, the COVID-19 pandemic may have left significant scarring effects, such as structurally high youth unemployment and low investment confidence. On the upside for China, the rise in human capital and research and development expenditure may support innovation and growth, but the magnitude of this effect is uncertain, because it is unclear if higher innovation will translate into higher total factor productivity, and because of the United States’s push to contain China technologically.
Topic:: Industrial Policy, European Union, Economic Growth, and COVID-19
Political Geography:: China, Europe, and Asia

90. Adjusting to the energy shock: the right policies for European industry

Author:: Giovanni Sgaravatti, Simone Tagliapietra, and Georg Zachmann
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: In 2022, overall European Union industrial employment and output increased above 2021 levels, despite rocketing energy prices. However, output declined from energy-intensive industries including basic metals, chemicals, non-metallic minerals and paper, for which energy costs represent a much bigger share of production costs than for less energy-intensive manufacturing. Energy prices are likely to remain above historic levels for the foreseeable future. In its industrial strategy response to this context, the EU must ask first whether the energy-intensive parts of the value chain should be outsourced permanently. Conditional on the answer being no, the second question is how to reduce energy prices to ensure the competitiveness of the energy-intensive productions stages that remain in the EU. First, the EU could bridge the high energy price period with unconditional subsidies, which seems to be the preferred strategy currently. This will avoid irreversible large-scale relocation abroad but is expensive, does not help to drive down energy prices and poses risks of fragmentation within the EU. It will only succeed if internationally competitive energy supplies are made available quickly. Second, the EU could support decarbonised production processes built on large-scale deployment of domestic renewables, grid interconnectors and storage. This would accelerate the green transition and reduce clean-tech prices worldwide. However, EU taxpayers would bear the cost of new technologies, without any guarantee of solving the current cost-competitiveness issue. Third, the EU could facilitate imports of energy-intensive products, while helping EU industry move to higher value-added parts of the value chain. Subsidies could be given directly to industrial sectors that have not become structurally uncompetitive, while bringing down energy demand and thus energy prices. However, this strategy would result in temporarily higher unemployment and factory closures in energy-intensive industries, would need to accommodate concerns over excessive reliance on imports and would need to be engineered to address carbon leakage. Policymakers should implement a mix of these policies. The EU should subsidise existing energy-intensive industries only in clearly justified cases, while deciding which energy-intensive products can be left to international market forces. By choosing which decarbonisation investments should be supported in Europe, the EU can combine industrial competitiveness and environmental sustainability.
Topic:: Industrial Policy, European Union, Value Chains, Energy, and Green Economy
Political Geography:: Europe

91. The longer-term fiscal challenges facing the European Union

Author:: Jeromin Zettelmeyer, Gregory Claeys, Zsolt Darvas, Lennard Welslau, and Stavros Zenios
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The pandemic and subsequent price shocks triggered by Russia’s invasion of Ukraine, have increased longer-term fiscal pressures in the European Union through higher debt, higher expected real interest rates and higher public investment needs. This Policy Brief makes some simple quantitative assessments of those effects and discusses policy implications, with the following results. First, long-term increases in primary fiscal balances required to offset higher debt and higher expected real interest rates are in the range of 0.5 percent to 1.5 percent of GDP for most EU countries. However, because of pre-existing differences in fiscal space, not all countries will need to undertake that adjustment, while some countries may need to adjust by substantially more. Among the 21 EU countries for which we have data to undertake this analysis, 14 will need to adjust by more than they were planning to do by 2025. Second, the required additional fiscal adjustment looks manageable, although it is substantial in some cases. To achieve medium-term debt-reducing primary balances, several EU countries will need to raise primary balances by more than 2 percent of GDP above their 2025 target, but no country will need additional fiscal adjustment of more than 3 percent of GDP. Third, market data suggests that the future path of real interest rates is very uncertain. Compared to the period immediately preceding the pandemic, longer-term expected real interest rates have increased by about 2 percentage points but remain low on average, at about 1 percent in real terms. Future developments depend on whether the structural factors that led to low interest rates in the first place persist or unwind. While interest rates might decline again, fiscal policymakers should not make plans that assume such a decline. Fourth, public spending needs for additional defence and climate spending run well above 1 percent of GDP per year. These needs do not appear to have been incorporated into current fiscal baselines, and hence will come on top of the adjustment described above. To ensure that fiscal adjustment does not defeat its purpose by slowing growth, it is essential that it is conducted gradually. In countries that require such adjustment, it should start as soon as cyclical conditions allow.
Topic:: Governance, European Union, Finance, and Fiscal Policy
Political Geography:: Europe

92. Will China’s new financial regulatory reform be enough to meet the challenges?

Author:: Martin Chorzempa and Nicolas Veron
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: Effective financial supervision plays a crucial role in maintaining financial stability and a healthy financial system. China’s leadership has made financial risk a core priority, and in reforms approved in March 2023, it reassigned regulatory responsibilities, creating a new supervisory body that will take over some responsibilities from the central bank, the banking and insurance regulator, and the securities regulator. The aim is that a change to the financial supervisory architecture (who does what in financial supervision) will make China’s system more effective and stable. In this policy brief, we argue that this incremental reform will not solve the core issues China faces in financial supervisory effectiveness. We provide an overview of China’s large and complex financial system, including its largely state-owned banks (some of which are the largest in the world by assets), securities markets and other financial intermediaries. Traditional divisions between different types of activities and institutions have been blurred by the rise of large financial conglomerates, risk-transfer techniques and internet-based finance. Reforms in 2018 to China’s supervisory architecture did not eliminate perceived shortcomings, including failures to effectively regulate financial conglomerates, fintech and regional banks. We then survey global benchmarks against which China’s financial supervisory architecture can be compared, including the United States and European Union. China’s supervisory system is already more streamlined, at least on paper, than either of these most comparable global counterparts. Like them, China’s system does not correspond exactly to any of the three textbook archetypes of supervision: sectoral, twin-peaks or integrated supervision. Ultimately, the effectiveness of China’s financial supervisory architecture suffers from excessive state intervention in the financial system through other channels, including through the unique and pervasive influence of the communist party, which hampers supervisory independence and makes it difficult to establish accountability for regulatory failures. While the recently announced reform may improve coordination across supervisory bodies, coordination within the new quasi-integrated supervisor, across central departments, and between them and local branches, will remain a challenge.
Topic:: Reform, Regulation, Finance, and Financial Stability
Political Geography:: China and Asia

93. The potential of sovereign sustainability-linked bonds in the drive for net-zero

Author:: Alexander Lehmann and Catarina Martins
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: European Union governments have for some years issued green bonds that raise funds for climate-related spending. These bonds have been received well in capital markets but because they promise a certain use of proceeds, they complicate budget management and may not match investors’ claims of having an impact on national climate policies. Public commitments made by major investors and asset owners suggest that limiting climate transition risks and the assessment of the alignment of sovereigns with net-zero targets will now become key determinants of portfolio allocation. Yield differentials in bond markets are already beginning to reflect transition risks that arise from the inadequate pursuit by issuers of climate targets. Unlike standard green bonds, sustainability-linked bonds (SLBs) create a link between performance (outcome) indicators and the financial terms of the bonds. SLBs have grown rapidly in importance in private markets and are now being assessed by sovereign issuers. We show that sovereign SLBs could help incentivise climate policies in EU countries, and accelerate emission reductions. They would be an effective tool for signalling commitment. A common EU framework for issuance by EU countries would enhance capital market integration and the transparency of national policies, and would limit climate transition risks in EU capital markets more broadly.
Topic:: Climate Change, European Union, Finance, Carbon Emissions, and Sovereign Bonds
Political Geography:: Europe

94. A model for a participative approach to digital competition regulation

Author:: Christophe Carugati
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: Digital competition regulations often put in place participative approaches to ensure competition in digital markets. The participative approach aims to involve regulated firms, stakeholders and regulators in the design of compliance measures. The approach is particularly relevant in complex and fast-evolving digital markets, where whole industries often depend on the behaviours of the regulated firms. The participative approach enables stakeholders and regulated firms to design compliance measures that are optimal for all because they ensure legal certainty for regulated firms, save time for regulators and take into account the views of stakeholders. However, the participative approach is subject to regulatory capture. The regulated firms and stakeholders might try to promote their interests to the regulator. This could result in endless discussions at best, and the adoption of inappropriate solutions following intense lobbying at worst. A governance model is necessary to ensure that the participative approach works without risks of regulatory capture. The model should define clearly each participant's role, duties and rights. There should be: 1) equal and transparent access of all stakeholders to the dialogue; 2) the presentation of tangible and evidence-based solutions from stakeholders and regulated firms; 3) public decisions from the regulator that contain assessments of the proposed solutions, with guidance to clarify rules; and 4) compliance measures proposed by the regulated firm in line with the guidance. The model should provide an assessment framework for the proposed solutions to identify the most effective. The assessment should rely on the principle of proportionality to assess whether the proposed compliance measure is proportionate, to ensure the effectiveness of the regulation. Finally, the model should safeguard against regulatory capture thanks to transparency rules and external monitoring.
Topic:: Regulation, Digital Economy, Innovation, Stakeholders, and Competition
Political Geography:: Global Focus

95. How Europe should answer the US Inflation Reduction Act

Author:: David Kleimann, Niclas Poitiers, André Sapir, Simone Tagliapietra, Nicolas Veron, Reinhilde Veugelers, and Jeromin Zettelmeyer
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The 2022 United States Inflation Reduction Act (IRA) is a significant and welcome climate law. It also includes trade-distortive subsidies, including local-content requirements prohibited under World Trade Organisation rules – the first time the US has done this and a blow to the international trading system that could trigger protectionism in other countries. The expected IRA green subsidies are of similar size to those available in the European Union, except in renewable energy production, where EU subsidies remain far larger. However, there are important qualitative differences. Some IRA subsidies discriminate against foreign producers while EU subsidies do not. IRA clean-tech subsidies are simpler and less fragmented, and they focus mainly on mass deployment of green technologies rather than innovation. The IRA will likely harm Europe through its competitiveness effect, while it will likely benefit climate transition in Europe and most of the rest of the world. However, the magnitude of both effects is very uncertain, partly because the IRA will induce substitution away from Chinese inputs. By forcing the reorganisation of supply chains, the IRA may make the EU and other economies more competitive relative to China. It may also initially slow the green transition. But in the longer run, this effect should be outweighed by the reduction in the cost of clean tech driven by the IRA. In responding to the IRA, the EU should not just seek to protect its competitiveness relative to the US but to pursue broader aims, including competitiveness in general, speedy decarbonisation and broad foreign policy and development policy goals. These aims imply that the EU should not impose local-content requirements of its own, should not loosen state-aid rules and should not mimic the IRA’s approach to manufacturing subsidies. Rather, it should focus on boosting its structural competitiveness, formulate a trade policy response that includes reform of the international subsidies regime, and develop an instrument for EU-level subsidies that focuses on early-stage development and increasing EU resilience to trade disruptions.
Topic:: Governance, European Union, Inflation, and Trade
Political Geography:: Europe

96. Climate versus trade? Reconciling international subsidy rules with industrial decarbonisation

Author:: David Kleimann
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The vast environmental subsidies that may be required for the transition to net-zero greenhouse gas emissions are starting to generate international trade and political frictions between the world’s largest economies. This puts (supra-)national industrial decarbonisation efforts on a collision course with international subsidies rules and national countervailing duty (ie anti-foreign subsidy) laws and regulations. International cooperation will be essential to defuse such tensions before they escalate and impede effective climate policy rollouts, and before they lead to economic countermeasures that create new barriers to trade in environmental goods. This requires agreement on permissible environmental subsidy practices that minimise distortions. Meanwhile, it will be crucial to provide financial transfers to assist poorer economies with industrial decarbonisation at the same time as those poorer economies are suffering from the cross-border negative economic impacts of otherwise net-global-welfare enhancing environmental subsidies paid out by wealthy countries. Various forums can host the technical and political negotiations necessary to set the parameters of net global-welfare enhancing subsidies. These include the G7, the G20, the Organisation for Economic Co-operation and Development, the World Trade Organisation’s Trade and Environment Committee and WTO Trade and Environmental Sustainability Structured Discussions, and the Coalition of Trade Ministers on Climate.
Topic:: Climate Change, Political Economy, Trade, Carbon Emissions, Subsidies, and Decarbonization
Political Geography:: Global Focus

97. How best to ensure international digital competition cooperation

Author:: Christophe Carugati
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: Large digital firms pose similar competition issues worldwide, such as promoting their own services over those of rivals, or imposing unfair terms and conditions. Competition authorities have opened several antitrust investigations and policymakers have proposed digital competition regulations to tackle these issues. G7 competition authorities have called for several years for international cooperation on digital markets. They want competition cases and laws around the world that are consistent and work together. However, the question of how this can be done remains. A toolbox for international cooperation in competition enforcement already exists, but it does not provide for cooperation in competition policy and has shortcomings in relation to competition enforcement. Current and proposed legislation targets the largest digital firms to tackle the characteristics of digital markets, such as multi-sidedness, and the same or very similar behaviours, such as self-preferencing. Legislation in different jurisdictions addresses these issues with similar rules. While there is some convergence, some rules diverge in substance and some are at high risk of divergence in interpretation. Inconsistency is thus likely to arise from a divergence of interpretation rather than substance. The solution would be to ensure a coherent approach to competition in digital markets. This could be done by developing a framework based on four elements: (1) adoption of common legal phases for future digital competition laws to ensure clarity; (2) adoption of a common legal interpretation through guidance drafted by international forums, such as the International Competition Network (ICN); (3) adoption of common technical requirements developed in the context of ICN technical workshops, when the rules require it; and (4) the implementation of an international monitoring committee within the ICN to evaluate whether competition authorities and courts enforce the rules consistently. The impact of the framework might be limited because of the non-binding nature of the approach, and the focus on specific competition-related legislation, excluding laws that can also address the issues, such as civil law. Countries can overcome these limitations if they are willing to cooperate to ensure a consistent approach.
Topic:: Markets, Digital Economy, Digital Cooperation, and Competition
Political Geography:: Global Focus

98. Preparing for the next winter: Europe’s gas outlook for 2023

Author:: Ben McWilliams, Simone Tagliapietra, Georg Zachmann, and Thierry Deschuyteneer
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The European Union has so far weathered the energy crisis brought on by Russia’s invasion of Ukraine in February 2022 and will manage winter 2022/23 even if Russia abruptly halts all pipeline gas flows. However, preparations must be made for winter 2023-24. In particular, gas storage facilities should be 90 percent full by 1 October 2023. We assess the demand reduction needed if the 90 percent storage target is to be achieved. Our assessment takes into account EU imports, exports to refill gas storage facilities in Ukraine and Moldova, the weather and the situation in power markets, where gas demand is highly dependent on non-gas energy sources. Assuming limited Russian exports continue, and weather conditions are typical, demand up to 1 October 2023 must remain 13 percent lower than the previous five-year average. The EU should therefore extend its demand-reduction target, which is currently set to expire on 31 March 2023. Two variables will determine how easily the target can be met: 1) liquified natural gas (LNG) supply, and 2) the nature of demand reductions. Plans for rapid deployment of regasification units will alleviate concerns over LNG import infrastructure capacity. However, the EU will continue to compete internationally for LNG cargoes, and will remain vulnerable to global dynamics. Strong economic growth in China, for example, could further tighten markets. The way demand is reduced will determine the economic consequences. So far, large reductions in industrial gas demand have not been accompanied by dramatic drops in industrial output, suggesting good substitution options. However, hardly any gas was saved in the power sector last year, because of weak nuclear and hydro output. The return of French nuclear output will therefore be a huge positive. Finally, households have reduced gas demand, partly driven by warmer than usual weather. Record numbers of heat pumps were deployed in 2022, suggesting the start of a structural shift away from gas demand for heating. Policy should support a continued structural shift away from gas. This involves enabling rapid deployment of renewables and the accompanying grid infrastructure, energy-efficiency measures, help for households that want to switch to cleaner heating, and collaboration with industry to accelerate adoption of new low-carbon production methods.
Topic:: Security, Gas, Energy, Russia-Ukraine War, and Green Economy
Political Geography:: Europe

99. The Long‐Run Effects of Immigration: Evidence across a Barrier to Refugee Settlement

Author:: Antonio Ciccone and Jan Nimczik
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: Some 280 million people around the world are first‐generation immigrants; in Organisation for Economic Co‐operation and Development countries, first‐generation immigrants make up around 14 percent of the population. The economic effects of immigration have become better understood in recent decades. A new focus of research on the effects of immigration is its long‐run impact on productivity, wages, and income. We contribute to this research by examining the long‐run economic effects of the arrival of refugees in what would become West Germany after the end of World War II (WWII) in 1945. This period was characterized by one of the largest population movements in modern times. Between 1945 and 1949, millions of people from Czechoslovakia, Hungary, Poland, Romania, and eastern parts of prewar Germany were displaced westward. When the Federal Republic of Germany (West Germany) was founded in 1949, these refugees made up around 15 percent of the country’s population.
Topic:: History, Immigration, Refugees, Resettlement, and World War II
Political Geography:: Europe, France, Germany, and United States of America

100. The Political Economy of Anti‐bribery Enforcement

Author:: Lauren Cohen and Bo Li
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: A level playing field for firm competition is a fundamental requirement for any market to maximize its potential and achieve productive efficiency. When government favors a set of firms or individuals over others, distortions arise that reverberate throughout entire industries, affecting sales, production, innovation, and more. This is not to say that barriers to firms may not sometimes naturally arise, but if a finger is placed on the scale by government to allow certain firms to gain some unerodable advantage, this can have large implications on allocation and overall economic development.
Topic:: Corruption, Political Economy, Law Enforcement, Accountability, and Bribery
Political Geography:: Global Focus

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