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Begin New Search Topic Economy Content Type Policy Brief Publication Year within 10 Years Publication Year within 5 Years Publication Year within 3 Years Publication Year within 1 Year

1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. The Economic Effects of the English Parliamentary Enclosures

Author:
Leander Heldring, James A. Robinson, and Sebastian Vollmer
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
In 1808, the English agriculturist Arthur Young stumbled on something interesting. He noticed that the adjacent Cambridgeshire parishes of Childersley and Hardwicke in England had startlingly different economic outcomes, even though they were divided only by a hedgerow. In Hardwicke, wheat yields were 16 bushels per acre, whereas in Childersley, on the other side of the hedgerow, they were 24 bushels per acre—50 percent higher. What could explain the difference? It wasn’t economic fundamentals, because Childersley consisted of similar soil. Rather, Young attributed the difference to the fact that the land in Hardwicke remained in “common field” while the land in Childersley was enclosed.
Topic:
Agriculture, History, Economy, Enclosure, and Parliament
Political Geography:
Europe and England

8. Balance of Trade, Balance of Power: How the Trade Deficit Reflects U.S. Influence in the World

Author:
Daniel Griswold and Andreas Freytag
Publication Date:
04-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The U.S. trade deficit is a misunderstood symbol of U.S. economic strength and influence in the world. The deficit is not driven by unfair trade abroad or industrial weakness at home and, as the Trump years show, cannot be “fixed” through higher tariffs. Instead, the trade deficit is driven by a persistent net inflow of foreign capital, which reduces interest rates and fuels economic output. Contrary to myth, the trade deficit is not a cause of deindustrialization or a loss of manufacturing jobs. In fact, the current balance of trade points to America’s continuing influence in global affairs—as a haven for global investment, as a robust producer and buyer of global goods and services, and as the provider of a strong dollar that remains at the center of the global economy. Policymakers should reject measures that restrict trade and foreign investment and instead seek to expand America’s commercial ties to the rest of the world.
Topic:
Foreign Policy, Economy, Trade, and Trade Deficit
Political Geography:
North America and United States of America

9. Course Correction: Charting a More Effective Approach to U.S.-China Trade

Author:
Clark Packard and Scott Lincicome
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Over the past several years the U.S.-China economic relationship has soured and become subordinated to broader concerns about national security and geopolitics. After a decades‐​long reform agenda in China that lifted hundreds of millions out of grinding poverty, Chinese president Xi Jinping has increasingly turned inward—reembracing Maoist socialism and heavy‐​handed central planning. Washington’s response to these worrisome developments has been reflexively hawkish economically, scattershot, and woefully inadequate for the economic challenge that China presents.
Topic:
National Security, Bilateral Relations, Economy, and Trade
Political Geography:
China, Asia, North America, and United States of America

10. The Vagaries of the Sea: Evidence on the Real Effects of Money from Maritime Disasters in the Spanish Empire

Author:
Adam Brzezinski, Yao Chen, Felix Ward, and Nuno Palma
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The Columbian voyage of 1492 marked the beginning of three centuries in which vast amounts of monetary silver were shipped from America to Spain. During that time, Spain’s money supply was subjected to the vagaries of the sea. Maritime disasters that resulted in the loss of silver‐​laden ships gave rise to random contractions in the amount of money that arrived in Spain. We studied these maritime disasters to obtain estimates of the causal effects of changes in the money supply on economic output and prices.
Topic:
Imperialism, History, Economy, and Maritime
Political Geography:
Europe and Spain

11. Global Inequality in Well‐​Being Has Decreased across Many Dimensions: Introducing the Inequality of Human Progress Index

Author:
Chelsea Follett and Vincent Geloso
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The world has seen dramatic, global human progress across a broad range of indicators in recent decades, but have those gains been widely shared? The Inequality of Human Progress Index (IHPI) measures relative gaps in global development. It surveys international inequality across a greater number of dimensions than any prior index. By analyzing inequality in a multidimensional way, the IHPI takes inequality more seriously than those indexes that focus on income inequality alone. The IHPI considers material well‐​being and seven additional metrics: lifespan, infant mortality, adequate nutrition, environmental safety, access to opportunity (as measured by education), access to information (as measured by internet access), and political freedom. Across all but two of those dimensions, the world has become more equal since 1990. Globalization and market liberalization over the past few decades have not only raised absolute living standards but also reduced overall inequality.
Topic:
Development, Inequality, Economy, and Well-Being
Political Geography:
Global Focus

12. Indian Nationalism and the Historical Fantasy of a Golden Hindu Period

Author:
Swaminathan S. Anklesaria Aiyar
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
India’s ruling Bharatiya Janata Party (BJP) promotes its Hindu nationalist agenda by claiming that India was the world’s richest region under glorious Hindu rule for thousands of years before being conquered by Muslim invaders in the 11th century and British invaders in the 18th century. BJP politicians say foreign invaders transformed a “golden bird” into an impoverished chattel. Prime Minister Narendra Modi has promised to restore India to its historical eminence. To support their narrative, BJP partisans often cite historian Angus Maddison, who estimated that India accounted for 32 percent of the world’s gross domestic product in 1 CE (during the Hindu period), but this number plummeted to 4 percent by the time British rule ended in 1947. But a closer look at Maddison’s work shows that the BJP is cherry‐​picking data to create a bogus historical narrative. In 1 CE, India’s per capita income was below the world average, at a pathetic $450. It did not rise at all during the following thousand years of Hindu rule. It did not worsen after the Muslim and British conquests, as BJP partisans claim, though it improved very slowly. The supposedly golden Hindu period was one of stark poverty and economic stagnation. Disease, drought, and war kept India’s population stagnant at 75 million people throughout a thousand years of Hindu rule in India, when just staying alive was a challenge. Under Muslim and British rule, death rates fell and the population grew, and it grew still more after independence. Both in terms of income and life expectancy, the “golden period”—if it can be called that—is today, not in the Hindu era.
Topic:
Nationalism, Economy, Domestic Politics, and Bharatiya Janata Party (BJP)
Political Geography:
South Asia and India

13. Skilled Immigration, Task Allocation, and the Innovation of Firms

Author:
Anna Maria Mayda, Gianluca Orefice, and Gianluca Santoni
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Immigration continues to be a hotly debated topic in several destination countries. Policy and academic discussions have focused on different types of immigration, depending on the host country. While research is voluminous on the United States and countries with skill‐​points‐​based immigration systems, the discussion in Europe has mostly centered on lesser‐​skilled migrants and political refugees, as they represent the largest proportion of arrivals. However, Europe has been receiving skilled migrants in increasing numbers. For example, in France, the share of college‐​educated immigrants is 23 percent— lower than in the United States, Canada, or the UK—but it increased by 11 percentage points between 1995 and 2010.
Topic:
Immigration, Economy, Innovation, and Skills
Political Geography:
Global Focus

14. Rational Eviction: How Landlords Use Evictions in Response to Rent Control

Author:
Eilidh Geddes and Nicole Holz
Publication Date:
07-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
As housing prices rise, cities are turning to rent control policies, hoping to ensure longterm affordable housing. Typically, rent control policies require leases to be renewed at statutorily limited rent increases. Rent control policies reduce the returns from operating in the rental market, creating well‐​studied incentives for landlords to leave the rental market. Many rent control policies—including San Francisco’s—feature vacancy decontrol provisions, which allow landlords to reset rents to market rates when tenants move. These policies limit the reductions in returns to operating in the rental market but create incentives for landlords to induce tenant turnover, possibly through evictions. The more tenants move, the more often a landlord can raise rents to market rates.
Topic:
Markets, Economy, Eviction, Housing, and Rent
Political Geography:
North America and United States of America

15. Central Bank Digital Currency: The Risks and the Myths

Author:
Nicholas Anthony and Norbert Michel
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Central bank digital currencies (CBDCs) have the potential to radically transform the American financial system—ultimately usurping the private sector and endangering Americans’ core freedoms. Although CBDCs have gained the attention of politicians, central bankers, and the tech industry, this experiment should be left on the drawing board. This paper provides a summary of why Congress should explicitly prohibit the Federal Reserve and the Department of the Treasury from issuing a CBDC.
Topic:
Finance, Economy, Fiscal Policy, Banking, and Digital Currency
Political Geography:
North America and United States of America

16. Self‐​Service Bans and Gasoline Prices: The Effect of Allowing Consumers to Pump Their Own Gas

Author:
Vitor Melo
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Billions of people live in countries that ban self‐​service fueling at gasoline stations, including some of the world’s largest countries by population, including China, India, and Brazil, among many others. The impact of these bans is largely understudied despite their prevalence presumably because this policy is often implemented at the national level and because there have been no policy changes in these countries that allow for an assessment of these bans on gasoline prices.
Topic:
Gas, Regulation, Economy, and Consumer Behavior
Political Geography:
North America, Global Focus, and United States of America

17. Proposals for Reducing the Size and Cost of Running Government

Author:
Kojo Asante and David Asante Darko
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
Ghana Center for Democratic Development
Abstract:
Every other sector of the economy has had to incur substantive inconvenience or financial loss in efforts to return the sovereign debts to sustainable levels. Every other sector of the economy, except government itself. Against this backdrop, this paper reiterates some of the measures that have been proposed to reduce government spending and examines them in more detail. We delve into how the ministerial team might be reduced in size and thereby optimized to cut down government expenditure.
Topic:
Government, Budget, Finance, and Economy
Political Geography:
Africa and Ghana

18. Green Hydrogen Industrial Value Chains: Geopolitical and Market Implications

Author:
Nicola De Blasio and Laima Eicke
Publication Date:
02-2023
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
The global transition to a low-carbon economy and adopting the needed clean energy technologies at scale will significantly impact existing value chains1 and transform production-to-consumption lifecycles. Regulatory and business models will need to rapidly evolve to manage the resulting substantial cost challenges and dramatic shifts in stakeholder interactions while continuing to create value. Green hydrogen2 is likely to play a pivotal role in a carbon-free future, as its adoption will enable the decarbonization of energy-intensive industrial processes whose emissions are hard to abate through simple electrification—such as steel and cement production. However, to take advantage of the economic opportunities created by its adoption at scale, countries will need to rethink the roles they could play in a new energy landscape and define strategic industrial policies accordingly. Our research3 shows how successful industrial policies must reflect a country’s potential value chain positioning in future green hydrogen markets and elucidates macro geopolitical trends that could reshape international relations as countries compete for industrial leadership, market shares, and opportunities for job creation.
Topic:
Markets, Economy, Carbon Emissions, Value Chains, Hydrogen, and Green Economy
Political Geography:
Global Focus

19. Trading short-term gains for long-term costs: the Egyptian political economy under al-Sisi

Author:
Matteo Colombo
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
Egypt’s political economy has been operating on the basis of three core principles over the last few decades. First, the country’s political authorities set strategic economic objectives in a top-down manner. Second, the power elite supports the political authorities and, in exchange, tightly supervises homegrown and foreign investment to generate revenues and job opportunities, as well as private benefits. Third, Egyptian citizens acquiesce, willingly or unwillingly, in this division of power that mostly benefits the political authorities and power elites in exchange for improvements in their livelihoods. Since 2014, President al-Sisi has held closely to these principles but relied increasingly on Egypt’s military networks (part of the power elite) to boost economic growth. This strategy has produced short-term gains – informal jobs and an array of consumer goods – at the expense of long-term economic prospects. In particular, the military’s economic influence has deepened some of Egypt’s structural problems: low productivity, inequality, informal unemployment and a suppressed private sector. This limits the future sustainability of the current economic model. Improving Egypt’s economic prospects requires reducing the role of the state – especially the military – in the economy in terms of decreasing the number of associated enterprises and lightening the regulatory framework. However, this is nearly impossible to realise in sectors in which the military already has a dominant profile, such as construction and extractives, because its support is essential for al-Sisi to maintain power. A more promising alternative for European policy makers to consider is influencing the Egyptian government to limit military influence in sectors with growth potential where the military is largely absent, such as manufacturing and Information and Communications Technology (ICT). A government strategy that prevents further military involvement in these sectors, crafts a regulatory framework conducive to private investment and invites foreign funding, can help Egypt realise greater economic growth and higher fiscal revenues.
Topic:
Development, Political Economy, Economy, and Abdel Fattah el-Sisi
Political Geography:
Middle East and Egypt

20. Russia’s War Economy

Author:
András Rácz, Ole Spillner, and Guntram Wolff
Publication Date:
02-2023
Content Type:
Policy Brief
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
Sanctions are a strong signal of Western resolve to oppose Russia’s war against Ukraine and have significantly weakened its ability to wage war. But Russia is adapting, turning its economy into a war economy, ramping up military production, and adjusting to sanctions. This Policy Brief looks at Russia’s economic adjustment with a focus on the shifting of resources to war purposes and the effect of sanctions on military production.
Topic:
Sanctions, Economy, Military, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

21. A New Horizon in U.S. Trade Policy: Key Developments and Questions for the Biden Administration

Author:
Trevor Sutton and Mike Williams
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
Center for American Progress - CAP
Abstract:
This issue brief examines some of the key trade initiatives pursued by the Biden administration to date. It then sets out key questions facing U.S. trade policy in a global environment defined by volatility and renewed ambition to tackle the great challenges of the 21st century, such as climate change, inequality, and great power competition.
Topic:
Foreign Policy, Climate Change, Treaties and Agreements, European Union, Inequality, Economy, Trade Policy, and Strategic Competition
Political Geography:
Europe, North America, Asia-Pacific, United States of America, and Americas

22. Greater than the Sum of Its Parts: Abraham Accords Free Trade Area

Author:
Robert Greenway
Publication Date:
02-2023
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
The Abraham Accords provide an unprecedented opportunity to increase trade and investment among its members significantly by establishing a regional free trade area that would ensure progress toward their aspirations, preserve the integrity and stability of global markets, fuel growth, and constrain China’s predatory trade practices. Signatories to the accords committed to a shared vision of peace and prosperity and recognized that economic integration can enable members to achieve their long-term economic goals. The accords have paved the way for comprehensive partnerships on a variety of issues related to security, trade, investment, the environment, innovation, tourism, energy, and other key sectors. While the growth in bilateral trade is of great significance, the true transformative power of these peace agreements lies in expanding regional integration and cooperation. This is already underway. Israel concluded a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE) in December 2022 and is currently negotiating a free trade agreement with Bahrain. Both will significantly accelerate economic development and provide incentives for others to follow suit. Israel's new foreign minister, Eli Cohen, recently stated that the volume of trade with Arab countries that normalized relations with Israel under the Abraham Accords in 2020 exceeded $2.8 billion dollars in 2022. While progress has been remarkable, its potential is far greater. According to RAND analysis of the potential of bilateral free trade agreements (FTA) between Israel and current signatories, the accords could create 46,000 new jobs and $24 billion in new economic activity for Israel's four partners. The benefits of a multilateral FTA encompassing current signatories would triple the overall benefit, creating more than 150,000 new jobs and new economic activity exceeding $75 billion. A multilateral FTA among an expanded number of potential signatories to the accords could create as much as 4 million new jobs and $1 trillion in new economic activity through 2030. This potential is not lost on the Chinese Communist Party (CCP). The CCP represents one of the most significant threats challenging the United States and its partners and allies. China’s state-directed economic policies, predatory lending, cyber intrusions, theft of intellectual property, illicit technology transfer and other coercive practices, industrial subsidies, and market access restrictions on key sectors of China’s economy constitute the most significant threats of the coming century. Several trends exacerbate the need for integrating markets aligned toward common goals. The global pandemic, the Russian invasion of Ukraine, Brexit, tariff tensions, political instability, protectionist policies, and regulatory uncertainty have threatened global trade by disrupting established supply chains and their underlying constellation of business models and trade relationships. As is often the case, these complex and interrelated challenges constitute an opportunity to realign our trade to safeguard the integrity of global markets and pursue US goals and objectives in collaboration with our partners and allies. The Abraham Accords offers just such an opportunity.
Topic:
Foreign Policy, Economy, Free Trade, and Abraham Accords
Political Geography:
Middle East and Israel

23. The Global Economic Outlook and the State of Indonesia

Author:
Ivana Markus and Pyan Amin Muchtar
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The global economy is facing a perfect storm as a result of the coronavirus disease (COVID-19) pandemic, prolonged geopolitical tensions, soaring inflation, and tightening monetary policy. A darkening future has been projected and the worst is yet to come. Amid global uncertainty, governments have become less aggressive in their budget spending, while high inflation has led many central banks to tighten their monetary policy. Furthermore, the pandemic has left widespread scarring effects, such as unemployment, poverty, and inequality, particularly on vulnerable groups. Global challenges and lower economic growth of the major economies will also affect Indonesia’s economic conditions, as the country may experience slower growth as a spillover from its major trading partners. It is important for the world and Indonesia to address these challenges, particularly the scarring effects, through multilateral solidarity and better maintenance of prudent fiscal policy.
Topic:
Monetary Policy, Geopolitics, Economy, Investment, Trade, and COVID-19
Political Geography:
Indonesia and Southeast Asia

24. Structural Transformation and the Global Production Value Chain: Potential Impact of the Cambodia-Republic of Korea FTA on Cambodia

Author:
Shandre Mugan Thangavelu and Vutha Hing
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This policy brief examines the structural transformation of the Cambodian economy based on the impact of the CKFTA in terms of trade, output growth, and employment. It summarises the key results of the CKFTA study that examined the impact of the CKFTA on the Cambodian economy – specifically quantitative (structural gravity model estimation and simulation) and qualitative trade policy evaluation in terms of exports, output, and structural transformation of the economy in the global and regional value chains. The policy brief also highlights the key benefits of the CKFTA to the Cambodian economy.
Topic:
Economy, Economic Growth, Investment, Trade, and Value Chains
Political Geography:
Asia, South Korea, and Cambodia

25. Cash Cabal: How Hezbollah Profits from Lebanon's Financial Crisis

Author:
Samara Azzi and Hanin Ghaddar
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
In March 2020, Lebanon opted for a “hard default” on $32 billion in sovereign debt, allowing the government to avoid negotiating with its Eurobond holders and investors. Beirut thereafter showed little interest in addressing the consequences of default, and the country’s economic meltdown worsened. As usual, the Lebanese people were the casualties, suffering amid what the World Bank has called a “deliberate depression.” This official negligence has cleared the way for a proliferating cash economy—which in turn has spawned a currency exchange scheme involving the central bank, foreign exchange agents, and Lebanese politicians. Hezbollah specifically has profited in areas ranging from real estate to solar energy, pharmaceuticals, and the illicit Captagon trade. In this Policy Note, authors Samara Azzi and Hanin Ghaddar—a venture capitalist and a former Lebanese journalist—skillfully diagram the corrupt status quo and explain why entrenched actors want to avoid systemic change. But as the study makes clear, the future health of the Lebanese economy requires an overhaul, and the international community must now press for deep reforms and personal accountability.
Topic:
Politics, Non State Actors, Financial Crisis, Economy, Hezbollah, and Shia Islam
Political Geography:
Middle East and Lebanon

26. Arming the Revolution: Trends in Iranian Defense Spending, 2013–23

Author:
Henry Rome
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
The Islamic Republic boasts a large and expanding nuclear program, the most capable missile and drone force in the Middle East, and a broad network of proxies that threaten U.S. interests. Nevertheless, scholars have devoted little attention to a key area: Iran’s defense spending. Although the data is publicly available, tabulating it is more difficult than one might assume, and three particular hazards await: (1) conversion of Iranian rials to dollars at unrealistic rates, (2) reliance on spending plans as opposed to actual spending, and (3) undercounting. Thus, any attempt to understand Iran’s military spending must scrupulously avoid such traps. In this Policy Note, Iran expert Henry Rome offers the most detailed public accounting yet of Tehran’s recent defense spending, illustrated by charts showing domestic trends and comparisons with regional rivals. The findings show how spending surged following the 2015 nuclear deal and plummeted following the U.S. withdrawal from the deal in 2018. They also suggest that a new nuclear accord with Washington will likely prompt another increase, demanding a broader strategy to counter Iran’s military ambitions alongside its nuclear ones.
Topic:
Security, Nuclear Weapons, Economy, Defense Spending, and Military
Political Geography:
Iran and Middle East