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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
27. Is Foreign Direct Investment Losing Clout in Development?
- Author:
- Axel Berger and Alexandros Ragoussis
- Publication Date:
- 01-2022
- Content Type:
- Policy Brief
- Institution:
- German Institute of Development and Sustainability (IDOS)
- Abstract:
- Over the last decade, only a single projection of foreign direct investment (FDI) flows by the United Nations influential “World Investment Report” has proposed a negative outlook in the medium term. Based partly on surveys of business executives, these forecasts reflect ex¬pecta¬tions of investment growth which, however, have repeated¬ly failed to materialise. In fact, FDI flows to develop¬ing countries have remained stagnant over the past decade. Such wishful thinking is nurtured by a long series of positive narratives and facts about foreign investment. FDI has been one of the pillars of international development efforts for over 70 years. Its promise has not been limited to critical finance, but extends to longer term competitiveness through access to better technology, managerial know-how and, above all, prosperity through more and better paid jobs in the formal sector. From the old prescriptions of the so-called Washington Consensus to the hopeful Addis Ababa Action Agenda, the dominant development narrative has therefore favoured a rather indiscriminate pursuit of investment volume. This brief calls for rethinking of narratives and policies that help to improve the impact of FDI, based on secular trends that challenge our expectations. Four such trends stand out: First, while other sources of finance for development have grown considerably over the last decades, foreign invest¬ment has not followed the trend. Second, the kind of investment that is associated with stronger gains and longer term commitment in host economies – greenfield FDI – has also been in consistent decline as a share of total invest¬ment, while mergers and acquisitions and project finance have gained in importance. Third, the top 100 multinational enterprises (MNEs), accounting for nearly a quarter of global FDI stock, rely less on employment today than they used to in order to grow their foreign presence. Job creation, knowledge transfer and spillovers are therefore less likely to materialise through the presence of mega-firms and their corresponding investment at scale. Fourth, the growth of Chinese outward FDI within a strategic expan¬sionary political agenda stands to change rules and attitudes towards foreign investment moving forwards. We argue that, collectively, these trends invite a renewed conversation around the kind of foreign investment we want and expectations of this source of finance for develop¬ment. These facts obscure neither the broad benefits of FDI to developing countries, nor the value proposition of FDI attraction. Rather, they raise questions about expectations, priorities and the alignment of investment policy with the realities experienced across develop¬ing countries. To that end, we propose four priorities that stand to make a difference in the current context. We call for policy-makers to: 1) Place additional emphasis on retention of investment and linkages with the domestic economy. 2) Try new approaches for FDI attraction that focus on improving domestic investment facilitation frameworks. 3) Be selective as to investment sources and activities in order to mitigate political risks and align inward investment better with sustainable development. 4) Add evidence to improve our understanding of invest¬ment and inform decision-making. Overall, it is critical to engage in a serious multi-stakeholder conversation around expectations, actors and solutions that respond to the investment reality of today.
- Topic:
- Development, United Nations, Foreign Direct Investment, and Economy
- Political Geography:
- Global Focus
28. Where is China heading?
- Author:
- Jean-Pierre Cabestan
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Robert Schuman Foundation (RSF)
- Abstract:
- China is ambitious, it is making this known and everyone is beginning to realise it. So much so that today a growing number of observers fear that it will take greater risks to achieve its objectives and fall into the famous "Thucydides' trap"; in short, that it will launch into a war, notably around Taiwan, which would inevitably involve the United States. Isn't its goal to supplant America and become the world's leading power? If, by 2028 or 2030, the Chinese economy were to exceed the US economy in terms of GDP, it is doubtful that it will succeed in removing the US from its pedestal. This is likely to be lower and more contested. But rather than a power transition, the world is witnessing the emergence of new, permanently asymmetrical bipolarity and, no doubt, a new Cold War[1].
- Topic:
- Foreign Policy, Geopolitics, Economy, and Multipolarity
- Political Geography:
- China and Asia
29. Accelerating Transitions towards a Circular Economy and Policy Implications for Korea
- Author:
- Jinyoung Moon, Youngseok Park, Seung Kwon Na, Sunghee Lee, and Eunmi Kim
- Publication Date:
- 08-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- This study analyzes global efforts to transition to a circular economy, and analyzes each country's responses and major issues to the stages of waste generation and management, which decisively distinguish the existing economic system from the circular economy. In addition, this study examines cases of private-sector-led cooperation for sup-porting developing countries in terms of international cooperation and linking with international trade, and also analyzes the implications of information-based environmental policies in response to the circular economy. Finally, based on the results of these analyses, this study proposes policy measures to prepare for the circular economy.
- Topic:
- Development, International Cooperation, Economy, Trade, Private Sector, and Management
- Political Geography:
- Asia and South Korea
30. A Review of the First Decade of the Korea-EU FTA
- Author:
- Dong-Hee Joe
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- Last year marked the tenth anniversary of the Free Trade Agreement (FTA) between the European Union (EU) and Korea, which entered into force in 2011. The EU is the world's largest economy and Korea's third largest trade partner, only after China and the United States. Back when the FTA nego-tiations began in 2007, the EU was Korea's second largest export destination, from which Korea enjoyed the largest surplus. Al-so, more than 35 per cent of Korea's foreign direct investment came from the member states of the EU. Korea is also a major econ-omy and a major trade partner of the EU, especially in Asia. The FTA with Korea was the first case of the EU's “next generation” FTAs, and is considered to have served as a benchmark for the EU's bilateral trade agreements thereafter (Kang 2016). As for Korea, it was the first FTA with a major economy, even before the US, its traditional ally, and China, its closest neighbor. Because of its importance, the Korea-EU FTA has received attention from economics and trade policy. KIEP also took a look at the first decade of its implementation last year (Joe et al. 2021). This Brief introduces some of the findings in Joe et al. (2021), fo-cusing on the impact of the FTA on the bi-lateral economic relationship between the two sides.
- Topic:
- European Union, Economy, Free Trade, and Trade
- Political Geography:
- Europe, Asia, and South Korea
31. Internationalization of the Korean Won in the Light of RMB Internationalization
- Author:
- Hyo Sang Kim, Young Sik Jeong, Ji Young Moon, and Da Young Yang
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- While China has risen to become a global superpower with a growing impact on the world economy, its currency, the Renminbi (RMB), has a limited role in the existing international financial system. China has made significant progress and will continue to push for the internationalization of the RMB, which can disrupt the global financial system, dominated by the US dollar. Under such circumstances, Korea must find a new direction for the internationalization of the Korean Won. The internationalization of the Korean won will provide new opportunities for the economy to take a further step through financial advancement.
- Topic:
- Economy, Currency, Internationalization, and Financial Development
- Political Geography:
- China, Asia, and South Korea
32. Australia’s Strategic Responses to the US-China Rivalry and Implications to Korea
- Author:
- Ina Choi, Sunhyung Lee, Jaeho Lee, and So Eun Kim
- Publication Date:
- 08-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- As in other Asia-Pacific countries, boosting trade with China has provided a growth engine for Australia's economy. Australia shared concerns over security threats posed by China’s military expansion, but up until the mid-2010s hard balancing against China did not seem to be an option for Australia. Australia’s recent moves against China, however, signal that Canberra has reset its China policy, with an overhaul of its national security and defense strategy. The shift of Australia’s China policy is an interesting case to explore how the regional order is likely to evolve in the growing US-China competition. Assessing Australia’s recent foreign policy is also relevant to Korea, both in terms of navigating Korea’s relations with the US and China and enhancing strategic ties between Australia and Korea. Against this backdrop, this study unravels Australia’s strategic responses to the changing regional order and draw implications for Korea's foreign policy.
- Topic:
- Security, Foreign Policy, National Security, Economy, Trade, and Rivalry
- Political Geography:
- China, South Korea, Australia, Asia-Pacific, and United States of America
33. Reassessing Recruitment Costs in a Changing World of Labor Migration
- Author:
- Kate Hooper
- Publication Date:
- 11-2022
- Content Type:
- Policy Brief
- Institution:
- Migration Policy Institute (MPI)
- Abstract:
- Recent years have seen national governments, multilateral organizations, civil society, and private-sector groups take steps to promote the fair and ethical recruitment of migrant workers, including efforts to reduce or eliminate recruitment costs. High recruitment costs can result in workers taking on a financial burden that can only be serviced through high-interest loans or debt bondage, placing them in a more vulnerable position and curtailing the income they can then save or send to loved ones via remittances. Still, progress to address recruitment costs has been uneven to date, and the pandemic has been a major setback. The public-health crisis has seen some existing costs rise or fluctuate wildly and new ones emerge (e.g., fees associated with COVID-19 testing and quarantine), with particularly pronounced effects in low- and middle-skilled sectors and informal employment. This has put working abroad out of reach for some would-be migrants while exposing others who travel abroad for work to new risks. This policy brief explores how the pandemic has affected costs for migrant workers at every stage of their journey, with a focus on new public-health measures and other additional expenses. It also reflects on what these developments mean for future efforts to promote fair and ethical recruitment. The brief is the first publication resulting from a multiyear research partnership between MPI and the SDC’s Thematic Section Migration and Forced Displacement to support the development of global solutions for migration-related challenges.
- Topic:
- International Cooperation, International Organization, Labor Issues, Governance, Employment, Economy, COVID-19, Recruitment, Immigration Policy, and Recession
- Political Geography:
- Global Focus
34. Baltic Perspectives on Germany’s Role in NATO
- Author:
- Justinas Juozaitis
- Publication Date:
- 01-2022
- Content Type:
- Policy Brief
- Institution:
- International Centre for Defence and Security - ICDS
- Abstract:
- In the second brief in our “Germany and the Security of the Baltic States” series, Justinas Juozaitis considers Germany’s contribution to NATO from a Baltic perspective and looks at what might change under Chancellor Olaf Scholz. Germany’s contribution to NATO’s collective defence and deterrence, including in the Baltic region, is substantial, but does not match what might be expected given its economic strength. The Bundeswehr already struggles to meet its commitments to the Alliance and recent increases in the defence budget have not translated into major improvements in capability. Germany will most likely not meet in full the promises it has made to enhancing collective defence. Even then, the new government will have to face decisions that will be unpopular with the public, and within their own coalition. Germany’s continued political support for deterrence in the Baltic region will likely continue, but its own military contribution will probably be smaller than promised.
- Topic:
- Security, Defense Policy, NATO, Economy, Regional Integration, and Deterrence
- Political Geography:
- Europe, Germany, and Baltic States
35. Democratic-values against authoritarianism? In the end it will be [again] the economy, stupid!
- Author:
- Ekrem Eddy Güzeldere
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- Hellenic Foundation for European and Foreign Policy (ELIAMEP)
- Abstract:
- Opposition parties around the world (e.g., in Hungary, Poland, Brazil and Turkey) have started to form alliances against authoritarian and illiberal leaders. The introduction of a presidential system in Turkey in 2018 made political parties join forces, since 50+1% would be needed to win the presidential elections. Since May 2018, first four and now six opposition parties have formed the so-called “Millet [Nation] Alliance”; almost all the polls place the Alliance well ahead of the government AKP-MHP alliance. In 2019, Millet Alliance candidates were able to win the municipal elections in Istanbul and Ankara. In May 2022, the Millet Alliance published ten clear, value-based principles, ranging from non-discrimination to freedom of the press, religion and thought through to the independence of the judiciary. The parties of the Millet Alliance are not remembered for defending democratic values in the past, but will they now? On topics like the Kurdish issue or refugees, the Millet Alliance is often harsher and more exclusionary than the government. However, the economic situation and the candidate put forward by the Millet Alliance More will be more decisive for the elections than a debate over values. Turkey does not have a choice between black and white, but rather between different shades of gray
- Topic:
- Authoritarianism, Democracy, Economy, Domestic Politics, and AKP
- Political Geography:
- Turkey and Middle East
36. German strengths and weaknesses in the Russo-Ukrainian war
- Author:
- Emmanuel Comte
- Publication Date:
- 06-2022
- Content Type:
- Policy Brief
- Institution:
- Hellenic Foundation for European and Foreign Policy (ELIAMEP)
- Abstract:
- The Russian attack on Ukraine has activated a series of tropes about the international balance of power in Europe. Most mainstream opinion outlets have published criticisms of Germany for supposedly being dependent on Russia and threatening the European security system by hesitating when decisive action is required. The following points serve to reintroduce some facts into the conversation. The current war in Ukraine is primarily the result of German-Russian rivalry. The war is a case of an established power, Russia, miscalculating in its efforts to prevent a rising power, Germany, from absorbing a nation within its sphere of cooperation: Ukraine. Germany’s strategy has been subtle, seeking to manage through economic interdependence an international conflict predicated upon balance of power considerations. Since circa 1900, Turkey has also played a key role in the German security system in the Black Sea region. With the benefit of hindsight, Germany’s strategy has been the most appropriate to the situation, given that Russia has been completely isolated while Germany is surrounded by allies. Germany’s problems today are not in its Russian policy, but rather in self-defeating ideologies which include the “Green” movement and economic statism.
- Topic:
- Security, Foreign Policy, Economy, Regional Politics, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, Ukraine, and Germany
37. Responding to Afghanistan’s Humanitarian Crisis: The Potential Role of Digital Payments
- Author:
- Michael Pisa
- Publication Date:
- 05-2022
- Content Type:
- Policy Brief
- Institution:
- Center for Global Development
- Abstract:
- Afghanistan’s humanitarian crisis continues to worsen, with the World Food Programme (WFP) reporting that 22.8 million people—more than half the country’s population—are projected to be acutely food insecure in 2022, including 8.7 million at risk of famine-like conditions.[1] Even before the Taliban took over the country on August 15, 2021, Afghanistan’s economy was buckling under the weight of the country’s worst drought in decades, a deteriorating security situation, and the COVID-19 pandemic.[2] Financial flows into Afghanistan collapsed immediately after the Taliban takeover, as foreign aid was cut, private sector activity fell sharply, and foreign banks and money service providers (collectively: “financial service providers” or FSPs) refused to process payments into the country for fear of inadvertently violating sanctions and anti-money laundering and the countering the financing of terrorism (AML/CFT) regulations. The exceptional nature of the situation hampers efforts to resume normal financial flows to Afghanistan. Never before has an organization designated as a terrorist group by the United States assumed control of an entire jurisdiction.[3] The United States and other countries responded to this novel circumstance by freezing the country’s foreign exchange reserves held abroad; keeping in place sanctions that criminalize most transactions with the Taliban; and denying official recognition of the Taliban as the legitimate head of the Afghan state, which has prevented the Afghan central bank (Da Afghanistan Bank or DAB) from maintaining correspondent accounts with foreign banks. Cumulatively, these measures have limited access to US dollars in the Afghan economy, leaving Afghans unable to pay for the food, fuel, and imported intermediate inputs their economy relies on.
- Topic:
- Security, Economy, Humanitarian Crisis, and Digitalization
- Political Geography:
- Afghanistan and Middle East
38. Governing the Global Commons: Challenges and Opportunities for US-Japan Cooperation
- Author:
- Kristi Govella, John Bradford, Kyoko Hatakeyama, Saadia M. Pekkanen, Setsuko Aoki, James Lewis, and Motohiro Tsuchiya
- Publication Date:
- 12-2022
- Content Type:
- Policy Brief
- Institution:
- German Marshall Fund of the United States (GMFUS)
- Abstract:
- The global commons—domains beyond the sovereign jurisdiction of any single state but to which all states have access—are essential to the stability and prosperity of the international order. In addition to the high seas, outer space, the atmosphere, and Antarctica, which are defined as global commons by international law, analysts have also suggested that other domains such as cyberspace may also qualify as potential commons. These domains provide essential public goods such as trade routes, transportation and communication networks, fish stocks, satellite imagery, global positioning, and e-commerce infrastructure that benefit countries around the world. To successfully manage the resources of the global commons and ensure open access to their spaces, effective governance structures must exist to accommodate and integrate the interests and responsibilities of state and non-state actors. Consequently, states have tried to come to agreements in each domain about how to enable broad access, avoid conflict, and enable cooperation. Over time, these discussions have resulted in the creation for each domain of a “regime,” a set of implicit or explicit principles, norms, rules, and decision-making procedures around which actors’ expectations converge (see Box 1). These regimes can take shape in the form of international law, national law, local regulations, private standards, and institutional bodies. They differ dramatically in maturity and complexity: the governance regime of the oceans has developed over the course of centuries, while the rules and norms of cyberspace have only had a few decades to coalesce. However, all these regimes attempt to solve similar dilemmas surrounding shared access and resources.
- Topic:
- Foreign Policy, Science and Technology, Democracy, Economy, Trade, and Defense Cooperation
- Political Geography:
- East Asia, Asia, United States of America, and Indo-Pacific
39. Shift to renewable energy could be a mixed blessing for mineral exporters
- Author:
- Cullen S. Hendrix
- Publication Date:
- 01-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The world’s transition to sustainable energy systems has suddenly become a boon to countries rich in critical minerals used in clean energy technologies like rechargeable batteries, solar panels, wind turbines, and electric vehicles. Among these critical minerals are aluminum, coltan, copper, aluminum, zinc, tin, rare earths, lithium, tantalum, and cobalt. Given that these minerals are key to building sustainable energy systems, vital for ensuring military might, and often extremely valuable, will countries with large, exportable endowments of these minerals fall prey to the resource curse? Hendrix says these countries may find their newfound wealth to be a mixed blessing. The size of the markets for these resources and their marginal production costs suggest that they do not have the potential to generate massive rents the way that oil and gas production have. Given that these rents are the source of many ills—authoritarianism, reduced investment in human capital, poor human rights records—this is good news. But because several of these minerals can be mined artisanally, they may lead to governance challenges related to armed conflict. Their status as strategic resources will invite major power meddling and interventions—but only if mineral-rich economies are forced to align themselves and access to their resources with a major power, like the United States or China. The 20th century’s scramble to secure oil resources led to cursed dynamics in oil-rich societies, but historical precedent is not destiny. Mineral-rich countries may avoid the resource curse, especially if they develop diverse investment and trading relationships to balance major power interests in their mineral wealth and embrace industry- and civil society–led good governance initiatives around mineral resources.
- Topic:
- Economy, Exports, Renewable Energy, Sustainability, and Minerals
- Political Geography:
- Global Focus
40. The European Union renews its offensive against US technology firms
- Author:
- Gary Clyde Hufbauer and Megan Hogan
- Publication Date:
- 02-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The European Union's proposed Digital Markets Act (DMA) contemplates extensive regulation of "gatekeeper" digital platforms—firms that perform a "core platform service" in the European Union (defined as online intermediation, online search, social networking, video sharing, electronic communication, cloud services, or online advertising), have a significant impact on the EU internal market, serve as an important gateway between business users and end-users, and enjoy an entrenched and durable position. Although at least one European firm could qualify as a gatekeeper, Hufbauer and Hogan say, the DMA discriminates against American technology firms by singling them out for the label of "gatekeepers." The European Commission’s proposed DMA targets both US tech giants such as Google, Amazon, Facebook, Apple, and Microsoft and smaller (albeit huge) US tech firms such as Airbnb and PayPal. The authors say the EU goal is to confer competitive advantage on European digital firms, breaching the EU commitment to national treatment of foreign firms, violating their intellectual property rights, and imposing high expenses on the "gatekeepers." At the same time, France is planning to enact its own steep barriers against US and other foreign cloud services.
- Topic:
- Markets, Science and Technology, European Union, Economy, and Digital Policy
- Political Geography:
- Europe and United States of America