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11. Getting Special Drawing Rights Right: Opportunities for Re-channelling SDRs to Vulnerable Countries

Author:
Jürgen K. Zattler
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Many developing countries are still grappling with the consequences of the pandemic and the associated high debt burdens while facing huge financing needs, inter alia related to climate change. In response, the International Monetary Fund (IMF) issued $650 billion in Special Drawing Rights (SDRs). The G7 and G20 have committed to re-channelling SDR 100 billion of their allocation to developing countries (on-lending, recycling and re-channelling are used interchangeably in this policy brief). The question now is how to implement these commitments in a way that promotes the global transformation and at the same time supports debt sustainability. It is important to note that there are certain restrictions on the re-channelling of SDRs. Most importantly, the re-channelling must be consistent with the SDR’s status as an international reserve asset. There are different interpretations of these requirements. The IMF has encouraged the use of the Poverty Reduction and Growth Trust (PRGT) and the Resilience and Sustainability Trust (RST) for re-channelling. It has also signalled general support for re-channelling SDRs to the multilateral development banks (MDBs). The European Central Bank (ECB) has taken a more restrictive stance. Does the re-channelling of SDRs through the above-mentioned IMF trusts (“the current on-lending option”) effectively support the global transformation? Measured against this objective, the current on-lending regime has two shortcomings. First, it does not sufficiently link foreign exchange support to deep structural transformation. Second, it does not allow funds to be leveraged in the private capital market. In this policy brief, we discuss a promising alternative: recycling SDRs for MDB hybrid capital (“the hybrid capital option”). This option can overcome the two drawbacks of the current system. At the same time, it has its own challenges. Moreover, both the current on-lending option and the hybrid capital option raise concerns about debt sustainability. If implemented in their current forms, they would risk exacerbating vulnerable countries’ debt problems. It would therefore be desirable to modify these options to better integrate debt implications. This could be done by using the on-lent SDRs primarily for programmes that are not “expenditure-based”, but rather help to improve the composition of expenditure and revenue in a socially equitable manner, for example the introduction of regulatory standards, feebates and carbon pricing, or the phasing out of fossil fuel subsidies. Such an approach could have the added benefit of making previously sceptical member states more receptive to the hybrid capital proposal. The mid-term review of the RST, scheduled for May 2024, as well as the full review in 2025 provide good opportunities to further explore some of the issues raised in this policy brief. In addition, the brief identifies three ways in which interested shareholders of the IMF and MDBs could advance the debate on the hybrid capital option.
Topic:
Development, Sustainability, COVID-19, and Multilateral Development Banks (MDBs)
Political Geography:
Global Focus

12. "The Dead Became Uncountable": Mass Atrocities in Sudan

Author:
Danica Damplo
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
Simon-Skjodt Center for the Prevention of Genocide, United States Holocaust Memorial Museum
Abstract:
On April 15th, 2023, fighting broke out in Sudan between the Sudanese Armed Forces (SAF), headed by Abdel Fattah al-Burhan, and a powerful paramilitary group known as the Rapid Support Forces (RSF), headed by Mohamed Hamdan Dagalo (Hemedti). The conflict has killed more than 13,000 people and displaced more than 7.3 million people.1 The RSF and its allied militias reignited a campaign of widespread, systematic, and ethnically-motivated violence in the region of Darfur, targeting non-Arab communities. Efforts by the United States (US) and others have failed to secure a durable ceasefire or to protect a new generation in Darfur from the risk of genocide. The conflict that began in April is a continuation of the cycles of violence that have persisted in Sudan for decades, including a period of mass atrocities in 2003-2005 in Darfur, for which former Sudanese President Omar al-Bashir was charged with genocide, crimes against humanity and war crimes by the International Criminal Court (ICC).2 The SAF and RSF had previously joined forces in 2019 to oust al-Bashir following widespread protests in which the Sudanese people called for transitional justice and a transition to democracy. However, in 2021, the SAF and RSF overthrew the transitional government that had replaced al-Bashir. In April 2023, disagreements between al-Burhan and Hemedti exploded into open warfare.3 While earlier conflicts had spared Sudan’s capital, since April civilians in Khartoum and nearby Omdurman have endured violent clashes, aerial bombardment, sexual violence, and a humanitarian crisis. The conflict spread, with the RSF seeking to control the Darfur region and branching out from the west, and the SAF based out of the city of Port Sudan in the east. The RSF is supplied by the United Arab Emirates (UAE), while the SAF is supported by Egypt.4 In June 2023, the United States Holocaust Memorial Museum sounded the alarm about the dire risk of genocide in Darfur.5 That risk remains high today. None of the conditions referenced in this warning have improved since June, and the numbers of civilians killed or harmed has risen dramatically. Among the communities at greatest risk today are those who survived genocide twenty years ago and who have continued to suffer since. This brief will detail mass atrocities underway in Sudan, highlight present and future risks not only in Darfur but elsewhere, and offer policy options for an effective response.
Topic:
Civil War, Armed Conflict, Atrocity Prevention, Protection, and Rapid Support Forces (RSF)
Political Geography:
Africa, Sudan, and Darfur

13. Risk of Mass Atrocities in India

Author:
Simon-Skjodt Center for the Prevention of Genocide
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
Simon-Skjodt Center for the Prevention of Genocide, United States Holocaust Memorial Museum
Abstract:
Rising levels of discrimination and dehumanization of minority communities in India is putting millions at an increased risk of mass atrocities. India has ranked in the top 15 countries at risk of mass killing since the Early Warning Project’s 2017–18 assessment, including its highest rank of second in the world last year.1 Since coming to power in 2014, Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) have promoted a Hindu nationalist ideology that characterizes India’s Muslim minority population of approximately 200 million people, 14% of the population, as a threat to the security and success of India.2 This identity-based ideology also threatens the safety of other minorities and excluded groups, such as Christian communities and Dalits.3 India’s constitution enshrines egalitarian principles, including nondiscrimination on the basis of religious identity.4 In 2021, a study conducted by the Pew Research Center found that more than 3 out of 4 Indians of all faiths believed that religious tolerance is an important part of being “truly Indian.”5 However, proponents of a decades old Hindu nationalist ideology, Hindutva, believe instead that “Hinduism—not the precarious balancing of all ethnic and religious communities residing in India—is the ultimate source of the country’s identity,” and it is this ideology that is embraced by the BJP and Prime Minister Modi.6 Scott Straus, a leading scholar on mass atrocities, has summarized research about risk factors for anticipating whether mass atrocities are likely to occur in a particular country, and these include: the presence of instability or armed conflict; adherence by political elites to an exclusionary ideology; and a history of discrimination (with impunity) against a particular group.7 Today instability in India is arguably geographically limited, as with the outbreak of conflict in May 2023 in Manipur. India has experienced more widespread inter-communal violence and mass atrocities in the past, with an uneven record of accountability or redress. The BJP today promotes an exclusionary nationalist ideology which privileges the rights of Hindus and presents religious minorities, particularly Muslims, as social and cultural outsiders, and as political and physical threats. This is demonstrated through discriminatory legislation, and a barrage of hate speech, including by political and religious leaders, that has tipped into outright incitement to violence. If nothing is done to address these risks, India may continue to experience a rise in the number of violent (and fatal) attacks against religious minorities, an escalation in the scale of the violence, and an increased level of state involvement in atrocities. Many countries, including the United States, view India as an important strategic partner on multiple fronts, including economically and politically as a counter to China's influence in the region. This can make discussions of mass atrocity risk more sensitive, but it should also demonstrate the ways in which mass atrocities in India could reverberate. For example, violence in states along India’s borders with Pakistan, Bangladesh, and Burma could exacerbate insecurity in India’s neighbors. Discrimination and mass violence in India could also undermine the assumptions of stability and shared values on which global initiatives are being built.8
Topic:
Minorities, Discrimination, Narendra Modi, Atrocity Prevention, Protection, and Bharatiya Janata Party (BJP)
Political Geography:
South Asia and India

14. India’s Service Sector: New Areas for Future Cooperation

Author:
Hyoungmin Han
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Given the growing significance of the Indo-Pacific region, the strategic importance of India is on the rise. With its considerable population and economic potential, India offers many opportunities for cooperation in various sectors. However, past cooperation between Korea and India has focused on the manufacturing sector. In order to consolidate economic ties be-tween Korea and India and to access the growing Indian market, cooperation in various industries, including services, is necessary. In this article, we will explore key aspects of India’s service industry and policy implications for better cooperation between two countries.
Topic:
Economics, International Cooperation, Markets, Bilateral Relations, and Manufacturing
Political Geography:
South Asia, India, South Korea, and Indo-Pacific

15. China's Trade Strategies and Korea-China Cooperation Plans

Author:
Seung Shin Lee, Sang Baek Hyun, Su Yeob Na, and Young Sun Kim
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
As uncertainties in the global trade environment expand, China's trade strategy is changing, and these changes are expected to have a significant impact on our trade environment with China. This paper analyzed China's policies on new trade issues such as supply chain reorganization, digital trade, climate change response and proposed policy implications.
Topic:
Climate Change, International Cooperation, Bilateral Relations, Trade, and Digital Policy
Political Geography:
China, Asia, and South Korea

16. Korea-India Economic Cooperation in the Indo-Pacific Era

Author:
Jeong Gon Kim, Kyunghoon Kim, Jonghun Pek, Yoo Jin Nam, and Wondeuk Cho
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
With the geopolitical and geoeconomic importance of the Indo-Pacific region in the spotlight, India's strategic value has come to the fore. The Korean government has included cooperation with India as a key task under its Indo-Pacific Strategy. This article aims to contribute to the establishment of economic cooperation with India from a medium- to long-term strategic perspective. Accordingly, this article analyzes the strategic changes of major countries towards India and India's response strategies, and the emerging agendas of economic cooperation between India and major countries. Lastly, this article proposes policy directions and key agendas for Korea-India economic cooperation.
Topic:
Economics, Bilateral Relations, Geopolitics, and Economic Cooperation
Political Geography:
India, Asia, South Korea, and Indo-Pacific

17. Assessing ASEAN Economic Integration Progress and South Korea’s Approach Focusing on TBT and SPS

Author:
Sungil Kwak
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
TBT (Technical Barriers to Trade) and SPS (Sanitary and Phytosanitary Measures) have two attributes. They act as barriers to trade expansion by protecting producers, but their importance has grown in terms of consumer protection measures after the COVID-19 pandemic. Rather than eliminating related regulations, achieving harmonization within the ASEAN region can simultaneously serve two objectives: expanding trade between South Korea and ASEAN and improving consumer protection. We assess the level of regional economic integration by measuring regulatory distances among ASEAN member states. We also measure regulatory distances between South Korea and ASEAN, and between Japan and ASEAN. We estimate the impact of ASEAN's TBT and SPS on the export performance of countries exporting goods to the ASEAN region.
Topic:
Regulation, Exports, Trade, ASEAN, COVID-19, and Economic Integration
Political Geography:
Asia and South Korea

18. Japan’s Supply Chain Policy and its Implications for South Korea

Author:
Gyu-Pan Kim
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This WEB paper analyzed Japan's supply chain policy in line with the implementation of Japan's Economic Security Promotion Act in May 2022, and presented policy implications such as supply chain cooperation between Korea and Japan. First, this paper analyzed the US-led reorganization of the global supply chain and the Japanese government's response to it. In particular, the Japanese government's economic security policy was evaluated from the perspective of how Japan approaches the US-led the global supply chain reorganization. Second, the Japanese government's supply chain policy was analyzed, focusing on the supply chain policy for some critical materials under the Economic Security Promotion Act. Finally, this paper proposed ways for Korea and Japan to cooperate in reshaping the global supply chain led by the United States.
Topic:
Security, Economics, and Supply Chains
Political Geography:
Japan, Asia, South Korea, and United States of America

19. Korea’s Global Value Chain Strategies amid Rising Trade Disputes

Author:
Won Seok Choi
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This article explores the challenges and transformations in global economic governance, particularly in the context of China's rise, widening trade disputes, and the retreat of globalization. It discusses the reorganization of global supply chains and their implications for Korea, focusing on the policies of key countries like the United States, the European Union (EU), and China towards stabilizing and reorganizing supply chains, with an emphasis on transitioning to a green industrial structure and improving domestic industrial competitiveness, particularly in the semiconductor and secondary battery industries. Accordingly, this article analyzes Korea's dependency on imports for semiconductors and secondary batteries, noting significant increases in imports and the diversification of import sources. The analysis reveals Korea's high import dependence on specific countries for critical goods and materials, emphasizing the importance of supply chain cooperation with countries that have global export competitiveness.
Topic:
Economics, Globalization, Governance, Trade, Industry, and Value Chains
Political Geography:
Asia and South Korea

20. EU's “Open Strategic Autonomy” and its Implications for Korea

Author:
Youngook Jang
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This brief explores the shifting global trade landscape characterized by weakening globalization and rising protectionism, exacerbated by events such as the US-China trade disputes, COVID-19 pandemic, and Russia's invasion of Ukraine. It discusses how these factors have prompted a trend towards 'Open Strategic Autonomy' (OSA) in the European Union (EU), as evidenced by newly suggested industrial and trade policies. The EU's experiences during the pandemic and energy dependence on Russia have emphasized the need for resilient supply chains. The analysis draws from Jang et al. (2023) to examine how the EU's OSA has evolved in response to these changes, offering insights for policy implications for Korea.
Topic:
European Union, Trade, Supply Chains, Strategic Autonomy, and Russia-Ukraine War
Political Geography:
China, Asia, South Korea, and United States of America