Geostrategic environment (october 18, 2022 am)

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All that is taken up here, in the complexity of open sources, does not necessarily reflect the opinion of The Global Eye

TOPICS

• (Crypto Currencies) Eduardo Levy Yeyati and Sebastián Katz, Brookings. Throughout financial history, many speculative manias have been characterized by a repeated mix of basic ingredients: from the enthusiasm of uninformed investors motivated by “disruptive” innovations, the inevitable illusion of easy profits to the infallible reference to the “paradigm shift” that will supposedly sustain the momentum over time, often conveniently seasoned with abundant global liquidity. Cryptomania: The good, the bad, and the ugly
• (Perspectives) Danielle Resnick, Brookings. Spiraling food prices and global supply chain disruptions precipitated by the Ukraine war, the COVID-19 pandemic, climate change, and regional conflicts have worsened hunger for millions of people, requiring humanitarian and resilience-building responses to be urgently scaled up. These current crises and urgent needs, discussed in more detail elsewhere in this report, amplify longstanding structural deficiencies in the global food system, which is inadequate for sustainably ending poverty and hunger as envisaged by the United Nations’ 2030 Agenda (Barrett et al. 2020; Webb et al. 2020). Several high-level gatherings in recent years have reinforced this message, including the UN Food Systems Summit in September 2021, the UN Climate Change Conference (COP26) in November 2021, and the Nutrition for Growth Summit in December 2021 (von Braun et al. 2021). Yet the crucial topic of food systems governance, which plays a core role in determining whether people have nutritious and sustainable diets, has largely been marginalized in these global assemblies (Canfield, Anderson, and McMichael 2021). Food Systems Transformation And Local Governance
• (Perspectives) Ajay Chhibber, Atlantic Council. This paper outlines reforms for Bretton Woods Institutions – such as the World Bank Group (WGB), the International Monetary Fund (IMF), and the World Trade Organization (WTO). The world needs a Bretton Woods 2.0 for the twenty-first century. The challenges that led to World War II — inequality, protectionism, and rising nationalism — have resurfaced and created the dire need for reform of these institutions. Modernizing the Bretton Woods Institutions for the twenty-first century
• (Perspectives) Nisha Narayanan, Atlantic Council. The Bretton Woods institutions continue to serve as the champions of international development and financial stability, but several factors create a challenge for their continued effectiveness and relevance. The growing finance gap from rising poverty, income and gender inequality and poor infrastructure are threatening global sustainable development. Emerging and developing countries, still recovering from pandemic, are also dealing with challenges related to climate change, food and energy security issues and access to technological innovation. Both the International Monetary Fund (IMF) and the World Bank, on their own, will not be able to effectively tackle these issues in the long-run. An increasingly connected world had led to the emergence of new and increasingly relevant, actors in the global development field. Changing Bretton Woods Institutions: How non-state and quasi-state actors can help drive the global development agenda
• (Perspectives) Hung Tran, Atlantic Council. Since their creation in 1944, the International Monetary Fund (IMF) and other Bretton Woods Institutions (BWI) have made significant contributions to the growth and stability of the world economy. However, they are now faced with enormous challenges going forward in the remainder of the twenty-first century. A century likely marked by increasing frequency of climate-related acute events, global inflation, rising public debt beyond sustainable levels, and growing geoeconomic rivalry among the world’s largest economies. The evolution of the IMF: A case for IMF 1.5 before Bretton Woods 2.0
• (Press Freedom) Joseph Lemoine and James Storen, Atlantic Council. The past few years have seen a dramatic shift in the way leaders treat their countries’ press. The result is that 85 percent of the world’s population has experienced a decline in press freedom in their country over the past five years, while trends in the suppression of independent press and media polarization are on the rise. Stifling the press is stifling progress. Here’s how policymakers can intervene

WORLDS

• (Armenia – Azerbaijan) Vasif Huseynov, The Jamestown Foundation. On October 6, on the sidelines of the first gathering of the European Political Community, historic meetings were held between the leaders of Armenia and Azerbaijan as well as those of France and Turkey in Prague. In Prague, Armenia and Azerbaijan Make a Critical Move Toward Peace
• (China) Philippe Aguignier, Institut Montaigne. Chinese authorities have had to deal with numerous episodes of financial instability since economic reforms put China on a path of fast economic growth in the late seventies. Some of the past episodes turned almost systemic, while some were linked to one-off events and therefore more easily contained. Some were anticipated and preemptively managed, while others were utterly unforeseen. So far, all of them have been successfully handled, although, most of the time, symptoms rather than the deep roots of the problems have been addressed, so instability bouts keep reoccurring. The 2022 episode affecting the real estate sector echoes previous ones which were managed without addressing the root causes of instability. A walk through previous chapters of this story illustrates these points. Financial Instability in China: The Road to Evergrande
• (China) Tianlei Huang, Nicolas Véron, PIIE. After rising at an almost continuous pace for at least a decade, the share of private sector ownership among China’s largest companies has dropped since 2021. It is tempting to infer that President Xi Jinping’s statist policies have brought an end to the age of private-sector expansion in China. But such a conclusion would be simplistic and premature. Several factors beyond China’s turn toward state dirigisme are driving the recent pause in the rise of the private sector, including global commodity price increases and China’s property crisis. China’s private sector advance pauses, but the trend is unclear
• (China) Brookings. Eswar Prasad, a professor at Cornell University and senior fellow at Brookings, discusses China’s economic risks and opportunities with David Dollar as China’s 20th Communist Party Congress continues this week. Prasad and Dollar look at the general shape of China’s economy, it’s housing market, renminbi strength relative to the dollar, and whether President Xi Jinping will continue with a command-led economy that limits independence and innovation among enterprises. Checking in on China’s economy during the 20th Party Congress
• (China) Victor Shih, Atlantic Council. Despite being the second largest economy in the world and the largest trading partner for a majority of the world’s economies, China has an inadequate voice in traditional international economic institutions, leaving many of its experts and policymakers dissatisfied. For example, on a per capita basis, 170 out of 189 member countries in the World Bank Group’s International Bank for Reconstruction and Development (IBRD), have more voting power than China. This paper examines different aspects of the dissatisfaction that Chinese scholars and officials’ have with existing global governance institutions (GGIs), with a special focus on the World Trade Organization (WTO) and the International Monetary Fund (IMF). It also discusses the underlying aspirations that drive proposed changes to various GGIs according to discussions with Chinese experts. How China would like to reshape international economic institutions
• (China) Atlantic Council. China’s Twentieth Communist Party Congress kicked off Sunday with a major speech from Xi Jinping, as he prepares to assume a third five-year term as party general secretary. How should the world read his approach to the economy, Taiwan, and more? Experts from across the Atlantic Council are weighing in throughout the congress. Experts react: Tracking the biggest takeaways from China’s Communist Party Congress
• (Europe) Giovanni Sgaravatti, Simone Tagliapietra, Cecilia Trasi, Bruegel. Russia’s invasion of Ukraine has triggered a quick and profound reorientation of energy policy in Europe. The aim is to decouple Europe from Russian fossil fuels, while accelerating the green transition. Russia cut about 80% of its gas supplies to Europe during spring and summer 2022, making the reorientation increasingly urgent. The European Union has sought to define the direction and speed of this restructuring of energy policy reshape through the REPowerEU strategy. However, crucial energy policy decisions have been taken by EU countries at national level. National energy policy responses to the energy crisis
• (Europe) Alicia García-Herrero, Niclas Poitiers, Bruegel. The proposed European Chips Act over-emphasises semiconductor production subsidies, focusing too little on increasing value-added in research. Europe’s promised semiconductor subsidies need to be better targeted
• (Europe – Oceania) Céline Pajon, IFRI. This Briefing argues that climate change challenges require an innovative, transformative approach to deliver results on mitigation, adaptation, and compensation for loss and damage. Europe and Oceania are two leading actors that already have a fruitful record of cooperation, and are willing to step up their cooperation to lead this transition to a new model. A Green-Blue Alliance in Motion: Pacific Island Countries and Europe Fighting Climate Change
• (Germany – Ukraine) Liana Fix, CFR. Germany is providing critical weapon systems to Ukraine in the grinding war with Russia, but it remains reluctant to lead on European security. On the Ukraine War, Germany Has a Leadership Problem. Here’s Why
• (Honduras) Ryan C. Berg, Matthew Carusi, CSIS. Special economic zones (SEZs) are autonomous zones designed to facilitate free-trade operations. SEZs can be broken down into the following types of zones: free-trade zones, which are duty-free areas to warehouse and transit goods; enterprise zones, which provide tax benefits to underperforming industries; specialized zones, which include technology parks; and freeports—the largest type of economic zones, combining work and residential spaces. A 2008 World Bank report defined SEZs as having the following characteristics: a geographically secured area, a single management system, eligibility for benefits based on the location within the zone, and a separate customs area.  Engines of Prosperity: The Promise of the Zones for Employment and Economic Development (ZEDEs) in Honduras
• (India – Europe) Institut Montaigne. India and the European Union are facing the global energy crisis and the geopolitical turmoil resulting from Russia’s invasion of Ukraine. Although this crisis has pushed them to widely diverge in their policies toward imports of Russian resources, room for greater cooperation certainly exists: both regions are net importers of fossil fuels and face many common challenges. Ahead of COP27, what will India and Europe do to adapt their transition plans to the new geopolitical situation? What is the pathway for much-needed enhanced cooperation between Europe and India? Joseph Dellatte our Research Fellow at Institut Montaigne, gives us an overview.  Towards COP27: An Agenda for India-Europe Climate Policy Cooperation
• (Iran) Nicholas Carl, Zachary Coles, Dana Alexander Gray, and Frederick W. Kagan, ISW. The Islamic Revolutionary Guards Corps (IRGC) began a three-day military exercise along the Iran-Azerbaijan border on October 17 likely to threaten Azerbaijan for allegedly hosting Israeli intelligence agents. Iran Crisis Update, October 17
• (Japan) Kenji E. Kushida, Carnegie Endowment for International Peace. Japan’s venture capital industry has grown to unprecedented prominence. Fueled by increasing social legitimacy and support from the Kishida administration, Japan’s venture capital is poised to drive the startup ecosystem to the next level. Japan’s Venture Capital Industry: Snapshot of Growth and Transformation
• (Russia) Richard Arnold, The Jamestown Foundation. With the coming of the new academic year in Russia, the Cossack movement celebrated its achievements in enrolling so many young people in their education institutions; “300,000 young Cossacks” are now being educated in such institutions. This number offers support both for the success of the regime’s ideological indoctrination and the contention that Russia’s Cossack societies are becoming increasingly consequential domestic actors in their own right (see EDM, August 10). 300,000 Young People in Cossack Education
• (Russia – Africa) Mary Blankenship and Aloysius Uche Ordu, Brookings. Unlike broader Russian narratives that exploit existing grievances of African audiences, most disinformation does not gain the same traction or attention on Twitter. Russian disinformation in Africa: What’s sticking and what’s not
• (Russia – Ukraine) Pavel K. Baev, The Jamestown Foundation. Fast-moving developments in various tactical battlefields of Russia’s war against Ukraine have notably slowed during the past week, and Moscow is actively seeking to prolong this procrastination. Russia Tries to Extend and Exploit a Pause in War
• (Russia – Ukraine) Karolina Hird, Kateryna Stepanenko, Riley Bailey, and Frederick W. Kagan, ISW. Russian forces conducted a series of drone and missile strikes against residential areas and critical infrastructure throughout Ukraine on October 17. Russian Offensive Campaign Assessment, October 17
• (USA) David Adesnik, FDD. “The United States welcomes the rise of a stable, peaceful, and prosperous China.” These words from the Obama administration’s 2015 National Security Strategy already belong to a bygone era. On Wednesday, U.S. President Joe Biden, who was vice president when the earlier document was drafted, released his own National Security Strategy. And it couldn’t strike a more different tone. “We will prioritize maintaining an enduring competitive edge over [China],” the document pledges, blasting China for trying “to become the world’s leading power.” Russia, too, is no longer described in rosy terms as a potential partner but as an “immediate and persistent threat” to global peace and stability. Put simply, the Biden strategy is a 180-degree turn from the last Democratic administration. Instead, the new document affirms what the Trump administration first concluded in its 2017 strategy: “[G]reat power competition [has] returned.”. Biden’s New National Security Strategy: A Lot of Trump, Very Little Obama
• (USA) Dany Bahar, Carlos Daboin Contreras, and Greg Wright, Brookings. Dozens of empirical studies have found that immigration benefits American workers. Even immigrant workers with little formal education have, with some exceptions, been found to have negligible effects on the wages of similarly educated workers. The immigrant workforce supports millions of US jobs
• (USA) Josephine Wolff, Brookings. As the Biden administration has worked in recent months to develop cryptocurrency regulations, the U.S. government finds itself caught between two extremes: unwilling to actively block cryptocurrency transactions for fear of restricting a growing and potentially lucrative industry but also determined not to give up completely on policing illegal cryptocurrency payments and going after their role in the cybercrime ecosystem. The competing priorities facing U.S. crypto regulations
• (USA) Alan Berube, Christine Baker-Smith, and Teryn Zmuda, Brookings. March 2022 marked the first anniversary of the passage of the American Rescue Plan Act (ARPA). It also marked nearly one year since states, counties, cities, and tribal governments began receiving their shares of the $350 billion ARPA provided toward public sector fiscal recovery. How cities and counties expanded their American Rescue Plan commitments in early 2022
• (USA) Darrell M. West, Brookings. With the 2022 U.S. midterm elections around the corner, political tensions are running high and there are concerns about election security. Conservative pundits are casting doubt on the integrity of the vote, citing problems with fake mail-in ballots or rigged voting machines. Meanwhile, concerns linger across the political spectrum regarding the possibility of foreign adversaries launching cyberattacks to manipulate the results of the vote or interfere with the campaign itself. TechTank Podcast Episode 55: How to improve election security
• (USA – Germany) Jacob Poushter, Sarah Austin, Pew Research Center. As daunting challenges from Russia, China and a flagging global economy ripple across the world, Americans and Germans continue to say that relations between their countries are good.  U.S.-German Relationship Remains Strong
• (Venezuela – Russia) Carlos Solar, RUSI. Venezuela’s partnership with Russia is likely to become ever closer as a result of Moscow’s growing international isolation. Is Russia’s War in Ukraine Aiding the Survival of the Venezuelan Regime?