b

Peptidoglycan analysis reveals that synergistic deacetylase activity in vegetative Clostridium difficile impacts the host response [Glycobiology and Extracellular Matrices]

Clostridium difficile is an anaerobic and spore-forming bacterium responsible for 15–25% of postantibiotic diarrhea and 95% of pseudomembranous colitis. Peptidoglycan is a crucial element of the bacterial cell wall that is exposed to the host, making it an important target for the innate immune system. The C. difficile peptidoglycan is largely N-deacetylated on its glucosamine (93% of muropeptides) through the activity of enzymes known as N-deacetylases, and this N-deacetylation modulates host–pathogen interactions, such as resistance to the bacteriolytic activity of lysozyme, virulence, and host innate immune responses. C. difficile genome analysis showed that 12 genes potentially encode N-deacetylases; however, which of these N-deacetylases are involved in peptidoglycan N-deacetylation remains unknown. Here, we report the enzymes responsible for peptidoglycan N-deacetylation and their respective regulation. Through peptidoglycan analysis of several mutants, we found that the N-deacetylases PdaV and PgdA act in synergy. Together they are responsible for the high level of peptidoglycan N-deacetylation in C. difficile and the consequent resistance to lysozyme. We also characterized a third enzyme, PgdB, as a glucosamine N-deacetylase. However, its impact on N-deacetylation and lysozyme resistance is limited, and its physiological role remains to be dissected. Finally, given the influence of peptidoglycan N-deacetylation on host defense against pathogens, we investigated the virulence and colonization ability of the mutants. Unlike what has been shown in other pathogenic bacteria, a lack of N-deacetylation in C. difficile is not linked to a decrease in virulence.




b

Fluctuation in O-GlcNAcylation inactivates STIM1 to reduce store-operated calcium ion entry via down-regulation of Ser621 phosphorylation [Molecular Bases of Disease]

Stromal interaction molecule 1 (STIM1) plays a pivotal role in store-operated Ca2+ entry (SOCE), an essential mechanism in cellular calcium signaling and in maintaining cellular calcium balance. Because O-GlcNAcylation plays pivotal roles in various cellular function, we examined the effect of fluctuation in STIM1 O-GlcNAcylation on SOCE activity. We found that both increase and decrease in STIM1 O-GlcNAcylation impaired SOCE activity. To determine the molecular basis, we established STIM1-knockout HEK293 (STIM1-KO-HEK) cells using the CRISPR/Cas9 system and transfected STIM1 WT (STIM1-KO-WT-HEK), S621A (STIM1-KO-S621A-HEK), or T626A (STIM1-KO-T626A-HEK) cells. Using these cells, we examined the possible O-GlcNAcylation sites of STIM1 to determine whether the sites were O-GlcNAcylated. Co-immunoprecipitation analysis revealed that Ser621 and Thr626 were O-GlcNAcylated and that Thr626 was O-GlcNAcylated in the steady state but Ser621 was not. The SOCE activity in STIM1-KO-S621A-HEK and STIM1-KO-T626A-HEK cells was lower than that in STIM1-KO-WT-HEK cells because of reduced phosphorylation at Ser621. Treatment with the O-GlcNAcase inhibitor Thiamet G or O-GlcNAc transferase (OGT) transfection, which increases O-GlcNAcylation, reduced SOCE activity, whereas treatment with the OGT inhibitor ST045849 or siOGT transfection, which decreases O-GlcNAcylation, also reduced SOCE activity. Decrease in SOCE activity due to increase and decrease in O-GlcNAcylation was attributable to reduced phosphorylation at Ser621. These data suggest that both decrease in O-GlcNAcylation at Thr626 and increase in O-GlcNAcylation at Ser621 in STIM1 lead to impairment of SOCE activity through decrease in Ser621 phosphorylation. Targeting STIM1 O-GlcNAcylation could provide a promising treatment option for the related diseases, such as neurodegenerative diseases.




b

N-acetylglucosamine drives myelination by triggering oligodendrocyte precursor cell differentiation [Molecular Bases of Disease]

Myelination plays an important role in cognitive development and in demyelinating diseases like multiple sclerosis (MS), where failure of remyelination promotes permanent neuro-axonal damage. Modification of cell surface receptors with branched N-glycans coordinates cell growth and differentiation by controlling glycoprotein clustering, signaling, and endocytosis. GlcNAc is a rate-limiting metabolite for N-glycan branching. Here we report that GlcNAc and N-glycan branching trigger oligodendrogenesis from precursor cells by inhibiting platelet-derived growth factor receptor-α cell endocytosis. Supplying oral GlcNAc to lactating mice drives primary myelination in newborn pups via secretion in breast milk, whereas genetically blocking N-glycan branching markedly inhibits primary myelination. In adult mice with toxin (cuprizone)-induced demyelination, oral GlcNAc prevents neuro-axonal damage by driving myelin repair. In MS patients, endogenous serum GlcNAc levels inversely correlated with imaging measures of demyelination and microstructural damage. Our data identify N-glycan branching and GlcNAc as critical regulators of primary myelination and myelin repair and suggest that oral GlcNAc may be neuroprotective in demyelinating diseases like MS.




b

Ischemic stroke disrupts the endothelial glycocalyx through activation of proHPSE via acrolein exposure [Molecular Bases of Disease]

Infiltration of peripheral immune cells after blood-brain barrier dysfunction causes severe inflammation after a stroke. Although the endothelial glycocalyx, a network of membrane-bound glycoproteins and proteoglycans that covers the lumen of endothelial cells, functions as a barrier to circulating cells, the relationship between stroke severity and glycocalyx dysfunction remains unclear. In this study, glycosaminoglycans, a component of the endothelial glycocalyx, were studied in the context of ischemic stroke using a photochemically induced thrombosis mouse model. Decreased levels of heparan sulfate and chondroitin sulfate and increased activity of hyaluronidase 1 and heparanase (HPSE) were observed in ischemic brain tissues. HPSE expression in cerebral vessels increased after stroke onset and infarct volume greatly decreased after co-administration of N-acetylcysteine + glycosaminoglycan oligosaccharides as compared with N-acetylcysteine administration alone. These results suggest that the endothelial glycocalyx was injured after the onset of stroke. Interestingly, scission activity of proHPSE produced by immortalized endothelial cells and HEK293 cells transfected with hHPSE1 cDNA were activated by acrolein (ACR) exposure. We identified the ACR-modified amino acid residues of proHPSE using nano LC–MS/MS, suggesting that ACR modification of Lys139 (6-kDa linker), Lys107, and Lys161, located in the immediate vicinity of the 6-kDa linker, at least in part is attributed to the activation of proHPSE. Because proHPSE, but not HPSE, localizes outside cells by binding with heparan sulfate proteoglycans, ACR-modified proHPSE represents a promising target to protect the endothelial glycocalyx.




b

Molecular architecture and domain arrangement of the placental malaria protein VAR2CSA suggests a model for carbohydrate binding [Glycobiology and Extracellular Matrices]

VAR2CSA is the placental-malaria–specific member of the antigenically variant Plasmodium falciparum erythrocyte membrane protein 1 (PfEMP1) family. It is expressed on the surface of Plasmodium falciparum-infected host red blood cells and binds to specific chondroitin-4-sulfate chains of the placental proteoglycan receptor. The functional ∼310 kDa ectodomain of VAR2CSA is a multidomain protein that requires a minimum 12-mer chondroitin-4-sulfate molecule for specific, high affinity receptor binding. However, it is not known how the individual domains are organized and interact to create the receptor-binding surface, limiting efforts to exploit its potential as an effective vaccine or drug target. Using small angle X-ray scattering and single particle reconstruction from negative-stained electron micrographs of the ectodomain and multidomain constructs, we have determined the structural architecture of VAR2CSA. The relative locations of the domains creates two distinct pores that can each accommodate the 12-mer of chondroitin-4-sulfate, suggesting a model for receptor binding. This model has important implications for understanding cytoadherence of infected red blood cells and potentially provides a starting point for developing novel strategies to prevent and/or treat placental malaria.




b

The structure of a family 110 glycoside hydrolase provides insight into the hydrolysis of {alpha}-1,3-galactosidic linkages in {lambda}-carrageenan and blood group antigens [Enzymology]

α-Linked galactose is a common carbohydrate motif in nature that is processed by a variety of glycoside hydrolases from different families. Terminal Galα1–3Gal motifs are found as a defining feature of different blood group and tissue antigens, as well as the building block of the marine algal galactan λ-carrageenan. The blood group B antigen and linear α-Gal epitope can be processed by glycoside hydrolases in family GH110, whereas the presence of genes encoding GH110 enzymes in polysaccharide utilization loci from marine bacteria suggests a role in processing λ-carrageenan. However, the structure–function relationships underpinning the α-1,3-galactosidase activity within family GH110 remain unknown. Here we focus on a GH110 enzyme (PdGH110B) from the carrageenolytic marine bacterium Pseudoalteromonas distincta U2A. We showed that the enzyme was active on Galα1–3Gal but not the blood group B antigen. X-ray crystal structures in complex with galactose and unhydrolyzed Galα1–3Gal revealed the parallel β-helix fold of the enzyme and the structural basis of its inverting catalytic mechanism. Moreover, an examination of the active site reveals likely adaptations that allow accommodation of fucose in blood group B active GH110 enzymes or, in the case of PdGH110, accommodation of the sulfate groups found on λ-carrageenan. Overall, this work provides insight into the first member of a predominantly marine clade of GH110 enzymes while also illuminating the structural basis of α-1,3-galactoside processing by the family as a whole.




b

Structural and biochemical characteristics of two Staphylococcus epidermidis RNase J paralogs RNase J1 and RNase J2 [Protein Structure and Folding]

RNase J enzymes are metallohydrolases that are involved in RNA maturation and RNA recycling, govern gene expression in bacteria, and catalyze both exonuclease and endonuclease activity. The catalytic activity of RNase J is regulated by multiple mechanisms which include oligomerization, conformational changes to aid substrate recognition, and the metal cofactor at the active site. However, little is known of how RNase J paralogs differ in expression and activity. Here we describe structural and biochemical features of two Staphylococcus epidermidis RNase J paralogs, RNase J1 and RNase J2. RNase J1 is a homodimer with exonuclease activity aided by two metal cofactors at the active site. RNase J2, on the other hand, has endonuclease activity and one metal ion at the active site and is predominantly a monomer. We note that the expression levels of these enzymes vary across Staphylococcal strains. Together, these observations suggest that multiple interacting RNase J paralogs could provide a strategy for functional improvisation utilizing differences in intracellular concentration, quaternary structure, and distinct active site architecture despite overall structural similarity.




b

{alpha}2-Macroglobulin-like protein 1 can conȷugate and inhibit proteases through their hydroxyl groups, because of an enhanced reactivity of its thiol ester [Protein Structure and Folding]

Proteins in the α-macroglobulin (αM) superfamily use thiol esters to form covalent conjugation products upon their proteolytic activation. αM protease inhibitors use theirs to conjugate proteases and preferentially react with primary amines (e.g. on lysine side chains), whereas those of αM complement components C3 and C4B have an increased hydroxyl reactivity that is conveyed by a conserved histidine residue and allows conjugation to cell surface glycans. Human α2-macroglobulin–like protein 1 (A2ML1) is a monomeric protease inhibitor but has the hydroxyl reactivity–conveying histidine residue. Here, we have investigated the role of hydroxyl reactivity in a protease inhibitor by comparing recombinant WT A2ML1 and the A2ML1 H1084N mutant in which this histidine is removed. Both of A2ML1s' thiol esters were reactive toward the amine substrate glycine, but only WT A2ML1 reacted with the hydroxyl substrate glycerol, demonstrating that His-1084 increases the hydroxyl reactivity of A2ML1's thiol ester. Although both A2ML1s conjugated and inhibited thermolysin, His-1084 was required for the conjugation and inhibition of acetylated thermolysin, which lacks primary amines. Using MS, we identified an ester bond formed between a thermolysin serine residue and the A2ML1 thiol ester. These results demonstrate that a histidine-enhanced hydroxyl reactivity can contribute to protease inhibition by an αM protein. His-1084 did not improve A2ML1's protease inhibition at pH 5, indicating that A2ML1's hydroxyl reactivity is not an adaption to its acidic epidermal environment.




b

The cation diffusion facilitator protein MamM's cytoplasmic domain exhibits metal-type dependent binding modes and discriminates against Mn2+ [Molecular Biophysics]

Cation diffusion facilitator (CDF) proteins are a conserved family of divalent transition metal cation transporters. CDF proteins are usually composed of two domains: the transmembrane domain, in which the metal cations are transported through, and a regulatory cytoplasmic C-terminal domain (CTD). Each CDF protein transports either one specific metal or multiple metals from the cytoplasm, and it is not known whether the CTD takes an active regulatory role in metal recognition and discrimination during cation transport. Here, the model CDF protein MamM, an iron transporter from magnetotactic bacteria, was used to probe the role of the CTD in metal recognition and selectivity. Using a combination of biophysical and structural approaches, the binding of different metals to MamM CTD was characterized. Results reveal that different metals bind distinctively to MamM CTD in terms of their binding sites, thermodynamics, and binding-dependent conformations, both in crystal form and in solution, which suggests a varying level of functional discrimination between CDF domains. Furthermore, these results provide the first direct evidence that CDF CTDs play a role in metal selectivity. We demonstrate that MamM's CTD can discriminate against Mn2+, supporting its postulated role in preventing magnetite formation poisoning in magnetotactic bacteria via Mn2+ incorporation.




b

Polydisperse molecular architecture of connexin 26/30 heteromeric hemichannels revealed by atomic force microscopy imaging [Protein Structure and Folding]

Connexin (Cx) protein forms hemichannels and gap junctional channels, which play diverse and profound roles in human physiology and diseases. Gap junctions are arrays of intercellular channels formed by the docking of two hemichannels from adjacent cells. Each hexameric hemichannel contains the same or different Cx isoform. Although homomeric Cxs forms have been largely described functionally and structurally, the stoichiometry and arrangement of heteromeric Cx channels remain unknown. The latter, however, are widely expressed in human tissues and variation might have important implications on channel function. Investigating properties of heteromeric Cx channels is challenging considering the high number of potential subunit arrangements and stoichiometries, even when only combining two Cx isoforms. To tackle this problem, we engineered an HA tag onto Cx26 or Cx30 subunits and imaged hemichannels that were liganded by Fab-epitope antibody fragments via atomic force microscopy. For Cx26-HA/Cx30 or Cx30-HA/Cx26 heteromeric channels, the Fab-HA binding distribution was binomial with a maximum of three Fab-HA bound. Furthermore, imaged Cx26/Cx30-HA triple liganded by Fab-HA showed multiple arrangements that can be derived from the law of total probabilities. Atomic force microscopy imaging of ringlike structures of Cx26/Cx30-HA hemichannels confirmed these findings and also detected a polydisperse distribution of stoichiometries. Our results indicate a dominant subunit stoichiometry of 3Cx26:3Cx30 with the most abundant subunit arrangement of Cx26-Cx26-Cx30-Cx26-Cx30-Cx30. To our knowledge, this is the first time that the molecular architecture of heteromeric Cx channels has been revealed, thus providing the basis to explore the functional effect of these channels in biology.




b

Heme oxygenase-2 is post-translationally regulated by heme occupancy in the catalytic site [Protein Structure and Folding]

Heme oxygenase-2 (HO2) and -1 (HO1) catalyze heme degradation to biliverdin, CO, and iron, forming an essential link in the heme metabolism network. Tight regulation of the cellular levels and catalytic activities of HO1 and HO2 is important for maintaining heme homeostasis. HO1 expression is transcriptionally regulated; however, HO2 expression is constitutive. How the cellular levels and activity of HO2 are regulated remains unclear. Here, we elucidate the mechanism of post-translational regulation of cellular HO2 levels by heme. We find that, under heme-deficient conditions, HO2 is destabilized and targeted for degradation, suggesting that heme plays a direct role in HO2 regulation. HO2 has three heme binding sites: one at its catalytic site and the others at its two heme regulatory motifs (HRMs). We report that, in contrast to other HRM-containing proteins, the cellular protein level and degradation rate of HO2 are independent of heme binding to the HRMs. Rather, under heme deficiency, loss of heme binding to the catalytic site destabilizes HO2. Consistently, an HO2 catalytic site variant that is unable to bind heme exhibits a constant low protein level and an enhanced protein degradation rate compared with the WT HO2. Finally, HO2 is degraded by the lysosome through chaperone-mediated autophagy, distinct from other HRM-containing proteins and HO1, which are degraded by the proteasome. These results reveal a novel aspect of HO2 regulation and deepen our understanding of HO2's role in maintaining heme homeostasis, paving the way for future investigation into HO2's pathophysiological role in heme deficiency response.




b

Representative cancer-associated U2AF2 mutations alter RNA interactions and splicing [Molecular Bases of Disease]

High-throughput sequencing of hematologic malignancies and other cancers has revealed recurrent mis-sense mutations of genes encoding pre-mRNA splicing factors. The essential splicing factor U2AF2 recognizes a polypyrimidine-tract splice-site signal and initiates spliceosome assembly. Here, we investigate representative, acquired U2AF2 mutations, namely N196K or G301D amino acid substitutions associated with leukemia or solid tumors, respectively. We determined crystal structures of the wild-type (WT) compared with N196K- or G301D-substituted U2AF2 proteins, each bound to a prototypical AdML polypyrimidine tract, at 1.5, 1.4, or 1.7 Å resolutions. The N196K residue appears to stabilize the open conformation of U2AF2 with an inter-RNA recognition motif hydrogen bond, in agreement with an increased apparent RNA-binding affinity of the N196K-substituted protein. The G301D residue remains in a similar position as the WT residue, where unfavorable proximity to the RNA phosphodiester could explain the decreased RNA-binding affinity of the G301D-substituted protein. We found that expression of the G301D-substituted U2AF2 protein reduces splicing of a minigene transcript carrying prototypical splice sites. We further show that expression of either N196K- or G301D-substituted U2AF2 can subtly alter splicing of representative endogenous transcripts, despite the presence of endogenous, WT U2AF2 such as would be present in cancer cells. Altogether, our results demonstrate that acquired U2AF2 mutations such as N196K and G301D are capable of dysregulating gene expression for neoplastic transformation.




b

Characterizing human {alpha}-1,6-fucosyltransferase (FUT8) substrate specificity and structural similarities with related fucosyltransferases [Protein Structure and Folding]

Mammalian Asn-linked glycans are extensively processed as they transit the secretory pathway to generate diverse glycans on cell surface and secreted glycoproteins. Additional modification of the glycan core by α-1,6-fucose addition to the innermost GlcNAc residue (core fucosylation) is catalyzed by an α-1,6-fucosyltransferase (FUT8). The importance of core fucosylation can be seen in the complex pathological phenotypes of FUT8 null mice, which display defects in cellular signaling, development, and subsequent neonatal lethality. Elevated core fucosylation has also been identified in several human cancers. However, the structural basis for FUT8 substrate specificity remains unknown.Here, using various crystal structures of FUT8 in complex with a donor substrate analog, and with four distinct glycan acceptors, we identify the molecular basis for FUT8 specificity and activity. The ordering of three active site loops corresponds to an increased occupancy for bound GDP, suggesting an induced-fit folding of the donor-binding subsite. Structures of the various acceptor complexes were compared with kinetic data on FUT8 active site mutants and with specificity data from a library of glycan acceptors to reveal how binding site complementarity and steric hindrance can tune substrate affinity. The FUT8 structure was also compared with other known fucosyltransferases to identify conserved and divergent structural features for donor and acceptor recognition and catalysis. These data provide insights into the evolution of modular templates for donor and acceptor recognition among GT-B fold glycosyltransferases in the synthesis of diverse glycan structures in biological systems.




b

The heptameric structure of the flagellar regulatory protein FlrC is indispensable for ATPase activity and disassembled by cyclic-di-GMP [Protein Structure and Folding]

The bacterial enhancer-binding protein (bEBP) FlrC, controls motility and colonization of Vibrio cholerae by regulating the transcription of class-III flagellar genes in σ54-dependent manner. However, the mechanism by which FlrC regulates transcription is not fully elucidated. Although, most bEBPs require nucleotides to stimulate the oligomerization necessary for function, our previous study showed that the central domain of FlrC (FlrCC) forms heptamer in a nucleotide-independent manner. Furthermore, heptameric FlrCC binds ATP in “cis-mediated” style without any contribution from sensor I motif 285REDXXYR291 of the trans protomer. This atypical ATP binding raises the question of whether heptamerization of FlrC is solely required for transcription regulation, or if it is also critical for ATPase activity. ATPase assays and size exclusion chromatography of the trans-variants FlrCC-Y290A and FlrCC-R291A showed destabilization of heptameric assembly with concomitant abrogation of ATPase activity. Crystal structures showed that in the cis-variant FlrCC-R349A drastic shift of Walker A encroached ATP-binding site, whereas the site remained occupied by ADP in FlrCC-Y290A. We postulated that FlrCC heptamerizes through concentration-dependent cooperativity for maximal ATPase activity and upon heptamerization, packing of trans-acting Tyr290 against cis-acting Arg349 compels Arg349 to maintain proper conformation of Walker A. Finally, a Trp quenching study revealed binding of cyclic-di-GMP with FlrCC. Excess cyclic-di-GMP repressed ATPase activity of FlrCC through destabilization of heptameric assembly, especially at low concentration of protein. Systematic phylogenetic analysis allowed us to propose similar regulatory mechanisms for FlrCs of several Vibrio species and a set of monotrichous Gram-negative bacteria.




b

Cholesterol sensing by CD81 is important for hepatitis C virus entry [Protein Structure and Folding]

CD81 plays a central role in a variety of physiological and pathological processes. Recent structural analysis of CD81 indicates that it contains an intramembrane cholesterol-binding pocket and that interaction with cholesterol may regulate a conformational switch in the large extracellular domain of CD81. Therefore, CD81 possesses a potential cholesterol-sensing mechanism; however, its relevance for protein function is thus far unknown. In this study we investigate CD81 cholesterol sensing in the context of its activity as a receptor for hepatitis C virus (HCV). Structure-led mutagenesis of the cholesterol-binding pocket reduced CD81–cholesterol association but had disparate effects on HCV entry, both reducing and enhancing CD81 receptor activity. We reasoned that this could be explained by alterations in the consequences of cholesterol binding. To investigate this further we performed molecular dynamic simulations of CD81 with and without cholesterol; this identified a potential allosteric mechanism by which cholesterol binding regulates the conformation of CD81. To test this, we designed further mutations to force CD81 into either the open (cholesterol-unbound) or closed (cholesterol-bound) conformation. The open mutant of CD81 exhibited reduced HCV receptor activity, whereas the closed mutant enhanced activity. These data are consistent with cholesterol sensing switching CD81 between a receptor active and inactive state. CD81 interactome analysis also suggests that conformational switching may modulate the assembly of CD81–partner protein networks. This work furthers our understanding of the molecular mechanism of CD81 cholesterol sensing, how this relates to HCV entry, and CD81's function as a molecular scaffold; these insights are relevant to CD81's varied roles in both health and disease.




b

Antibiotic binding releases autoinhibition of the TipA multidrug-resistance transcriptional regulator [Gene Regulation]

Investigations of bacterial resistance strategies can aid in the development of new antimicrobial drugs as a countermeasure to the increasing worldwide prevalence of bacterial antibiotic resistance. One such strategy involves the TipA class of transcription factors, which constitute minimal autoregulated multidrug resistance (MDR) systems against diverse antibiotics. However, we have insufficient information regarding how antibiotic binding induces transcriptional activation to design molecules that could interfere with this process. To learn more, we determined the crystal structure of SkgA from Caulobacter crescentus as a representative TipA protein. We identified an unexpected spatial orientation and location of the antibiotic-binding TipAS effector domain in the apo state. We observed that the α6–α7 region of the TipAS domain, which is canonically responsible for forming the lid of antibiotic-binding cleft to tightly enclose the bound antibiotic, is involved in the dimeric interface and stabilized via interaction with the DNA-binding domain in the apo state. Further structural and biochemical analyses demonstrated that the unliganded TipAS domain sterically hinders promoter DNA binding but undergoes a remarkable conformational shift upon antibiotic binding to release this autoinhibition via a switch of its α6–α7 region. Hence, the promoters for MDR genes including tipA and RNA polymerases become available for transcription, enabling efficient antibiotic resistance. These insights into the molecular mechanism of activation of TipA proteins advance our understanding of TipA proteins, as well as bacterial MDR systems, and may provide important clues to block bacterial resistance.




b

Identification and biochemical characterization of Asp t 36, a new fungal allergen from Aspergillus terreus [Protein Structure and Folding]

Aspergillus terreus is an allergenic fungus, in addition to causing infections in both humans and plants. However, the allergens in this fungus are still unknown, limiting the development of diagnostic and therapeutic strategies. We used a proteomic approach to search for allergens, identifying 16 allergens based on two-dimensional immunoblotting with A. terreus susceptible patient sera. We further characterized triose-phosphate isomerase (Asp t 36), one of the dominant IgE (IgE)-reactive proteins. The gene was cloned and expressed in Escherichia coli. Phylogenetic analysis showed Asp t 36 to be highly conserved with close similarity to the triose-phosphate isomerase protein sequence from Dermatophagoides farinae, an allergenic dust mite. We identified four immunodominant epitopes using synthetic peptides, and mapped them on a homology-based model of the tertiary structure of Asp t 36. Among these, two were found to create a continuous surface patch on the 3D structure, rendering it an IgE-binding hotspot. Biophysical analysis indicated that Asp t 36 shows similar secondary structure content and temperature sensitivity with other reported triose-phosphate isomerase allergens. In vivo studies using a murine model displayed that the recombinant Asp t 36 was able to stimulate airway inflammation, as demonstrated by an influx of eosinophils, goblet cell hyperplasia, elevated serum Igs, and induction of Th2 cytokines. Collectively, our results reveal the immunogenic property of Asp t 36, a major allergen from A. terreus, and define a new fungal allergen more broadly. This allergen could serve as a potent candidate for investigating component resolved diagnosis and immunotherapy.




b

The C-terminal region of the plasmid partitioning protein TubY is a tetramer that can bind membranes and DNA [Protein Structure and Folding]

Bacterial low-copy-number plasmids require partition (par) systems to ensure their stable inheritance by daughter cells. In general, these systems consist of three components: a centromeric DNA sequence, a centromere-binding protein and a nucleotide hydrolase that polymerizes and functions as a motor. Type III systems, however, segregate plasmids using three proteins: the FtsZ/tubulin-like GTPase TubZ, the centromere-binding protein TubR and the MerR-like transcriptional regulator TubY. Although the TubZ filament is sufficient to transport the TubR-centromere complex in vitro, TubY is still necessary for the stable maintenance of the plasmid. TubY contains an N-terminal DNA-binding helix-turn-helix motif and a C-terminal coiled-coil followed by a cluster of lysine residues. This study determined the crystal structure of the C-terminal domain of TubY from the Bacillus cereus pXO1-like plasmid and showed that it forms a tetrameric parallel four-helix bundle that differs from the typical MerR family proteins with a dimeric anti-parallel coiled-coil. Biochemical analyses revealed that the C-terminal tail with the conserved lysine cluster helps TubY to stably associate with the TubR-centromere complex as well as to nonspecifically bind DNA. Furthermore, this C-terminal tail forms an amphipathic helix in the presence of lipids but must oligomerize to localize the protein to the membrane in vivo. Taken together, these data suggest that TubY is a component of the nucleoprotein complex within the partitioning machinery, and that lipid membranes act as mediators of type III systems.




b

A structural and kinetic survey of GH5_4 endoglucanases reveals determinants of broad substrate specificity and opportunities for biomass hydrolysis [Protein Structure and Folding]

Broad-specificity glycoside hydrolases (GHs) contribute to plant biomass hydrolysis by degrading a diverse range of polysaccharides, making them useful catalysts for renewable energy and biocommodity production. Discovery of new GHs with improved kinetic parameters or more tolerant substrate-binding sites could increase the efficiency of renewable bioenergy production even further. GH5 has over 50 subfamilies exhibiting selectivities for reaction with β-(1,4)–linked oligo- and polysaccharides. Among these, subfamily 4 (GH5_4) contains numerous broad-selectivity endoglucanases that hydrolyze cellulose, xyloglucan, and mixed-linkage glucans. We previously surveyed the whole subfamily and found over 100 new broad-specificity endoglucanases, although the structural origins of broad specificity remained unclear. A mechanistic understanding of GH5_4 substrate specificity would help inform the best protein design strategies and the most appropriate industrial application of broad-specificity endoglucanases. Here we report structures of 10 new GH5_4 enzymes from cellulolytic microbes and characterize their substrate selectivity using normalized reducing sugar assays and MS. We found that GH5_4 enzymes have the highest catalytic efficiency for hydrolysis of xyloglucan, glucomannan, and soluble β-glucans, with opportunistic secondary reactions on cellulose, mannan, and xylan. The positions of key aromatic residues determine the overall reaction rate and breadth of substrate tolerance, and they contribute to differences in oligosaccharide cleavage patterns. Our new composite model identifies several critical structural features that confer broad specificity and may be readily engineered into existing industrial enzymes. We demonstrate that GH5_4 endoglucanases can have broad specificity without sacrificing high activity, making them a valuable addition to the biomass deconstruction toolset.




b

Mapping the transition state for a binding reaction between ancient intrinsically disordered proteins [Molecular Biophysics]

Intrinsically disordered protein domains often have multiple binding partners. It is plausible that the strength of pairing with specific partners evolves from an initial low affinity to a higher affinity. However, little is known about the molecular changes in the binding mechanism that would facilitate such a transition. We previously showed that the interaction between two intrinsically disordered domains, NCBD and CID, likely emerged in an ancestral deuterostome organism as a low-affinity interaction that subsequently evolved into a higher-affinity interaction before the radiation of modern vertebrate groups. Here we map native contacts in the transition states of the low-affinity ancestral and high-affinity human NCBD/CID interactions. We show that the coupled binding and folding mechanism is overall similar but with a higher degree of native hydrophobic contact formation in the transition state of the ancestral complex and more heterogeneous transient interactions, including electrostatic pairings, and an increased disorder for the human complex. Adaptation to new binding partners may be facilitated by this ability to exploit multiple alternative transient interactions while retaining the overall binding and folding pathway.




b

Bacterial iron detoxification at the molecular level [Protein Structure and Folding]

Iron is an essential micronutrient, and, in the case of bacteria, its availability is commonly a growth-limiting factor. However, correct functioning of cells requires that the labile pool of chelatable “free” iron be tightly regulated. Correct metalation of proteins requiring iron as a cofactor demands that such a readily accessible source of iron exist, but overaccumulation results in an oxidative burden that, if unchecked, would lead to cell death. The toxicity of iron stems from its potential to catalyze formation of reactive oxygen species that, in addition to causing damage to biological molecules, can also lead to the formation of reactive nitrogen species. To avoid iron-mediated oxidative stress, bacteria utilize iron-dependent global regulators to sense the iron status of the cell and regulate the expression of proteins involved in the acquisition, storage, and efflux of iron accordingly. Here, we survey the current understanding of the structure and mechanism of the important members of each of these classes of protein. Diversity in the details of iron homeostasis mechanisms reflect the differing nutritional stresses resulting from the wide variety of ecological niches that bacteria inhabit. However, in this review, we seek to highlight the similarities of iron homeostasis between different bacteria, while acknowledging important variations. In this way, we hope to illustrate how bacteria have evolved common approaches to overcome the dual problems of the insolubility and potential toxicity of iron.




b

Evolving the naturally compromised chorismate mutase from Mycobacterium tuberculosis to top performance [Protein Structure and Folding]

Chorismate mutase (CM), an essential enzyme at the branch-point of the shikimate pathway, is required for the biosynthesis of phenylalanine and tyrosine in bacteria, archaea, plants, and fungi. MtCM, the CM from Mycobacterium tuberculosis, has less than 1% of the catalytic efficiency of a typical natural CM and requires complex formation with 3-deoxy-d-arabino-heptulosonate 7-phosphate synthase for high activity. To explore the full potential of MtCM for catalyzing its native reaction, we applied diverse iterative cycles of mutagenesis and selection, thereby raising kcat/Km 270-fold to 5 × 105 m−1s−1, which is even higher than for the complex. Moreover, the evolutionarily optimized autonomous MtCM, which had 11 of its 90 amino acids exchanged, was stabilized compared with its progenitor, as indicated by a 9 °C increase in melting temperature. The 1.5 Å crystal structure of the top-evolved MtCM variant reveals the molecular underpinnings of this activity boost. Some acquired residues (e.g. Pro52 and Asp55) are conserved in naturally efficient CMs, but most of them lie beyond the active site. Our evolutionary trajectories reached a plateau at the level of the best natural enzymes, suggesting that we have exhausted the potential of MtCM. Taken together, these findings show that the scaffold of MtCM, which naturally evolved for mediocrity to enable inter-enzyme allosteric regulation of the shikimate pathway, is inherently capable of high activity.




b

Unique active-site and subsite features in the arabinogalactan-degrading GH43 exo-{beta}-1,3-galactanase from Phanerochaete chrysosporium [Enzymology]

Arabinogalactan proteins (AGPs) are plant proteoglycans with functions in growth and development. However, these functions are largely unexplored, mainly because of the complexity of the sugar moieties. These carbohydrate sequences are generally analyzed with the aid of glycoside hydrolases. The exo-β-1,3-galactanase is a glycoside hydrolase from the basidiomycete Phanerochaete chrysosporium (Pc1,3Gal43A), which specifically cleaves AGPs. However, its structure is not known in relation to its mechanism bypassing side chains. In this study, we solved the apo and liganded structures of Pc1,3Gal43A, which reveal a glycoside hydrolase family 43 subfamily 24 (GH43_sub24) catalytic domain together with a carbohydrate-binding module family 35 (CBM35) binding domain. GH43_sub24 is known to lack the catalytic base Asp conserved among other GH43 subfamilies. Our structure in combination with kinetic analyses reveals that the tautomerized imidic acid group of Gln263 serves as the catalytic base residue instead. Pc1,3Gal43A has three subsites that continue from the bottom of the catalytic pocket to the solvent. Subsite −1 contains a space that can accommodate the C-6 methylol of Gal, enabling the enzyme to bypass the β-1,6–linked galactan side chains of AGPs. Furthermore, the galactan-binding domain in CBM35 has a different ligand interaction mechanism from other sugar-binding CBM35s, including those that bind galactomannan. Specifically, we noted a Gly → Trp substitution, which affects pyranose stacking, and an Asp → Asn substitution in the binding pocket, which recognizes β-linked rather than α-linked Gal residues. These findings should facilitate further structural analysis of AGPs and may also be helpful in engineering designer enzymes for efficient biomass utilization.




b

Seeded fibrils of the germline variant of human {lambda}-III immunoglobulin light chain FOR005 have a similar core as patient fibrils with reduced stability [Molecular Biophysics]

Systemic antibody light chains (AL) amyloidosis is characterized by deposition of amyloid fibrils derived from a particular antibody light chain. Cardiac involvement is a major risk factor for mortality. Using MAS solid-state NMR, we studied the fibril structure of a recombinant light chain fragment corresponding to the fibril protein from patient FOR005, together with fibrils formed by protein sequence variants that are derived from the closest germline (GL) sequence. Both analyzed fibril structures were seeded with ex-vivo amyloid fibrils purified from the explanted heart of this patient. We find that residues 11-42 and 69-102 adopt β-sheet conformation in patient protein fibrils. We identify arginine-49 as a key residue that forms a salt bridge to aspartate-25 in the patient protein fibril structure. In the germline sequence, this residue is replaced by a glycine. Fibrils from the GL protein and from the patient protein harboring the single point mutation R49G can be both heterologously seeded using patient ex-vivo fibrils. Seeded R49G fibrils show an increased heterogeneity in the C-terminal residues 80-102, which is reflected by the disappearance of all resonances of these residues. By contrast, residues 11-42 and 69-77, which are visible in the MAS solid-state NMR spectra, show 13Cα chemical shifts that are highly like patient fibrils. The mutation R49G thus induces a conformational heterogeneity at the C terminus in the fibril state, whereas the overall fibril topology is retained. These findings imply that patient mutations in FOR005 can stabilize the fibril structure.




b

Determinants of replication protein A subunit interactions revealed using a phosphomimetic peptide [Molecular Biophysics]

Replication protein A (RPA) is a eukaryotic ssDNA-binding protein and contains three subunits: RPA70, RPA32, and RPA14. Phosphorylation of the N-terminal region of the RPA32 subunit plays an essential role in DNA metabolism in processes such as replication and damage response. Phosphorylated RPA32 (pRPA32) binds to RPA70 and possibly regulates the transient RPA70-Bloom syndrome helicase (BLM) interaction to inhibit DNA resection. However, the structural details and determinants of the phosphorylated RPA32–RPA70 interaction are still unknown. In this study, we provide molecular details of the interaction between RPA70 and a mimic of phosphorylated RPA32 (pmRPA32) using fluorescence polarization and NMR analysis. We show that the N-terminal domain of RPA70 (RPA70N) specifically participates in pmRPA32 binding, whereas the unphosphorylated RPA32 does not bind to RPA70N. Our NMR data revealed that RPA70N binds pmRPA32 using a basic cleft region. We also show that at least 6 negatively charged residues of pmRPA32 are required for RPA70N binding. By introducing alanine mutations into hydrophobic positions of pmRPA32, we found potential points of contact between RPA70N and the N-terminal half of pmRPA32. We used this information to guide docking simulations that suggest the orientation of pmRPA32 in complex with RPA70N. Our study demonstrates detailed features of the domain-domain interaction between RPA70 and RPA32 upon phosphorylation. This result provides insight into how phosphorylation tunes transient bindings between RPA and its partners in DNA resection.




b

A highly potent CD73 biparatopic antibody blocks organization of the enzyme active site through dual mechanisms [Methods and Resources]

The dimeric ectonucleotidase CD73 catalyzes the hydrolysis of AMP at the cell surface to form adenosine, a potent suppressor of the immune response. Blocking CD73 activity in the tumor microenvironment can have a beneficial effect on tumor eradication and is a promising approach for cancer therapy. Biparatopic antibodies binding different regions of CD73 may be a means to antagonize its enzymatic activity. A panel of biparatopic antibodies representing the pairwise combination of 11 parental monoclonal antibodies against CD73 was generated by Fab-arm exchange. Nine variants vastly exceeded the potency of their parental antibodies with ≥90% inhibition of activity and subnanomolar EC50 values. Pairing the Fabs of parents with nonoverlapping epitopes was both sufficient and necessary whereas monovalent antibodies were poor inhibitors. Some parental antibodies yielded potent biparatopics with multiple partners, one of which (TB19) producing the most potent. The structure of the TB19 Fab with CD73 reveals that it blocks alignment of the N- and C-terminal CD73 domains necessary for catalysis. A separate structure of CD73 with a Fab (TB38) which complements TB19 in a particularly potent biparatopic shows its binding to a nonoverlapping site on the CD73 N-terminal domain. Structural modeling demonstrates a TB19/TB38 biparatopic antibody would be unable to bind the CD73 dimer in a bivalent manner, implicating crosslinking of separate CD73 dimers in its mechanism of action. This ability of a biparatopic antibody to both crosslink CD73 dimers and fix them in an inactive conformation thus represents a highly effective mechanism for the inhibition of CD73 activity.




b

MMP activation-associated aminopeptidase N reveals a bivalent 14-3-3 binding motif [Protein Structure and Folding]

Aminopeptidase N (APN, CD13) is a transmembrane ectopeptidase involved in many crucial cellular functions. Besides its role as a peptidase, APN also mediates signal transduction and is involved in the activation of matrix metalloproteinases (MMPs). MMPs function in tissue remodeling within the extracellular space and are therefore involved in many human diseases, such as fibrosis, rheumatoid arthritis, tumor angiogenesis, and metastasis, as well as viral infections. However, the exact mechanism that leads to APN-driven MMP activation is unclear. It was previously shown that extracellular 14-3-3 adapter proteins bind to APN and thereby induce the transcription of MMPs. As a first step, we sought to identify potential 14-3-3–binding sites in the APN sequence. We constructed a set of phosphorylated peptides derived from APN to probe for interactions. We identified and characterized a canonical 14-3-3–binding site (site 1) within the flexible, structurally unresolved N-terminal APN region using direct binding fluorescence polarization assays and thermodynamic analysis. In addition, we identified a secondary, noncanonical binding site (site 2), which enhances the binding affinity in combination with site 1 by many orders of magnitude. Finally, we solved crystal structures of 14-3-3σ bound to mono- and bis-phosphorylated APN-derived peptides, which revealed atomic details of the binding mode of mono- and bivalent 14-3-3 interactions. Therefore, our findings shed some light on the first steps of APN-mediated MMP activation and open the field for further investigation of this important signaling pathway.




b

Humanin selectively prevents the activation of pro-apoptotic protein BID by sequestering it into fibers [Protein Structure and Folding]

Members of the B-cell lymphoma (BCL-2) protein family regulate mitochondrial outer membrane permeabilization (MOMP), a phenomenon in which mitochondria become porous and release death-propagating complexes during the early stages of apoptosis. Pro-apoptotic BCL-2 proteins oligomerize at the mitochondrial outer membrane during MOMP, inducing pore formation. Of current interest are endogenous factors that can inhibit pro-apoptotic BCL-2 mitochondrial outer membrane translocation and oligomerization. A mitochondrial-derived peptide, Humanin (HN), was reported being expressed from an alternate ORF in the mitochondrial genome and inhibiting apoptosis through interactions with the pro-apoptotic BCL-2 proteins. Specifically, it is known to complex with BAX and BID. We recently reported the fibrillation of HN and BAX into β-sheets. Here, we detail the fibrillation between HN and BID. These fibers were characterized using several spectroscopic techniques, protease fragmentation with mass analysis, and EM. Enhanced fibrillation rates were detected with rising temperatures or pH values and the presence of a detergent. BID fibers are similar to those produced using BAX; however, the structures differ in final conformations of the BCL-2 proteins. BID fibers display both types of secondary structure in the fiber, whereas BAX was converted entirely to β-sheets. The data show that two distinct segments of BID are incorporated into the fiber structure, whereas other portions of BID remain solvent-exposed and retain helical structure. Similar analyses show that anti-apoptotic BCL-xL does not form fibers with humanin. These results support a general mechanism of sequestration of pro-apoptotic BCL-2 proteins into fibers by HN to inhibit MOMP.




b

A combinatorial native MS and LC-MS/MS approach reveals high intrinsic phosphorylation of human Tau but minimal levels of other key modifications [Neurobiology]

Abnormal changes of neuronal Tau protein, such as phosphorylation and aggregation, are considered hallmarks of cognitive deficits in Alzheimer's disease. Abnormal phosphorylation is thought to precede aggregation and therefore to promote aggregation, but the nature and extent of phosphorylation remain ill-defined. Tau contains ∼85 potential phosphorylation sites, which can be phosphorylated by various kinases because the unfolded structure of Tau makes them accessible. However, methodological limitations (e.g. in MS of phosphopeptides, or antibodies against phosphoepitopes) led to conflicting results regarding the extent of Tau phosphorylation in cells. Here we present results from a new approach based on native MS of intact Tau expressed in eukaryotic cells (Sf9). The extent of phosphorylation is heterogeneous, up to ∼20 phosphates per molecule distributed over 51 sites. The medium phosphorylated fraction Pm showed overall occupancies of ∼8 Pi (± 5) with a bell-shaped distribution; the highly phosphorylated fraction Ph had 14 Pi (± 6). The distribution of sites was highly asymmetric (with 71% of all P-sites in the C-terminal half of Tau). All sites were on Ser or Thr residues, but none were on Tyr. Other known posttranslational modifications were near or below our detection limit (e.g. acetylation, ubiquitination). These findings suggest that normal cellular Tau shows a remarkably high extent of phosphorylation, whereas other modifications are nearly absent. This implies that abnormal phosphorylations at certain sites may not affect the extent of phosphorylation significantly and do not represent hyperphosphorylation. By implication, the pathological aggregation of Tau is not likely a consequence of high phosphorylation.




b

Structural transitions in Orb2 prion-like domain relevant for functional aggregation in memory consolidation [Molecular Biophysics]

The recent structural elucidation of ex vivo Drosophila Orb2 fibrils revealed a novel amyloid formed by interdigitated Gln and His residue side chains belonging to the prion-like domain. However, atomic-level details on the conformational transitions associated with memory consolidation remain unknown. Here, we have characterized the nascent conformation and dynamics of the prion-like domain (PLD) of Orb2A using a nonconventional liquid-state NMR spectroscopy strategy based on 13C detection to afford an essentially complete set of 13Cα, 13Cβ, 1Hα, and backbone 13CO and 15N assignments. At pH 4, where His residues are protonated, the PLD is disordered and flexible, except for a partially populated α-helix spanning residues 55–60, and binds RNA oligos, but not divalent cations. At pH 7, in contrast, His residues are predominantly neutral, and the Q/H segments adopt minor populations of helical structure, show decreased mobility and start to self-associate. At pH 7, the His residues do not bind RNA or Ca2+, but do bind Zn2+, which promotes further association. These findings represent a remarkable case of structural plasticity, based on which an updated model for Orb2A functional amyloidogenesis is suggested.




b

Molecular characterization of the RNA-protein complex directing -2/-1 programmed ribosomal frameshifting during arterivirus replicase expression [Protein Structure and Folding]

Programmed ribosomal frameshifting (PRF) is a mechanism used by arteriviruses like porcine reproductive and respiratory syndrome virus (PRRSV) to generate multiple proteins from overlapping reading frames within its RNA genome. PRRSV employs −1 PRF directed by RNA secondary and tertiary structures within its viral genome (canonical PRF), as well as a noncanonical −1 and −2 PRF that are stimulated by the interactions of PRRSV nonstructural protein 1β (nsp1β) and host protein poly(C)-binding protein (PCBP) 1 or 2 with the viral genome. Together, nsp1β and one of the PCBPs act as transactivators that bind a C-rich motif near the shift site to stimulate −1 and −2 PRF, thereby enabling the ribosome to generate two frameshift products that are implicated in viral immune evasion. How nsp1β and PCBP associate with the viral RNA genome remains unclear. Here, we describe the purification of the nsp1β:PCBP2:viral RNA complex on a scale sufficient for structural analysis using small-angle X-ray scattering and stochiometric analysis by analytical ultracentrifugation. The proteins associate with the RNA C-rich motif as a 1:1:1 complex. The monomeric form of nsp1β within the complex differs from previously reported homodimer identified by X-ray crystallography. Functional analysis of the complex via mutational analysis combined with RNA-binding assays and cell-based frameshifting reporter assays reveal a number of key residues within nsp1β and PCBP2 that are involved in complex formation and function. Our results suggest that nsp1β and PCBP2 both interact directly with viral RNA during formation of the complex to coordinate this unusual PRF mechanism.




b

Role of phospholipid synthesis in the development and differentiation of malaria parasites in the blood [Microbiology]

The life cycle of malaria parasites in both their mammalian host and mosquito vector consists of multiple developmental stages that ensure proper replication and progeny survival. The transition between these stages is fueled by nutrients scavenged from the host and fed into specialized metabolic pathways of the parasite. One such pathway is used by Plasmodium falciparum, which causes the most severe form of human malaria, to synthesize its major phospholipids, phosphatidylcholine, phosphatidylethanolamine, and phosphatidylserine. Much is known about the enzymes involved in the synthesis of these phospholipids, and recent advances in genetic engineering, single-cell RNA-Seq analyses, and drug screening have provided new perspectives on the importance of some of these enzymes in parasite development and sexual differentiation and have identified targets for the development of new antimalarial drugs. This Minireview focuses on two phospholipid biosynthesis enzymes of P. falciparum that catalyze phosphoethanolamine transmethylation (PfPMT) and phosphatidylserine decarboxylation (PfPSD) during the blood stages of the parasite. We also discuss our current understanding of the biochemical, structural, and biological functions of these enzymes and highlight efforts to use them as antimalarial drug targets.




b

Lipid-tuned Zinc Transport Activity of Human ZnT8 Protein Correlates with Risk for Type-2 Diabetes [Molecular Bases of Disease]

Zinc is a critical element for insulin storage in the secretory granules of pancreatic beta cells. The islet-specific zinc transporter ZnT8 mediates granular sequestration of zinc ions. A genetic variant of human ZnT8 arising from a single nonsynonymous nucleotide change contributes to increased susceptibility to type-2 diabetes (T2D), but it remains unclear how the high risk variant (Arg-325), which is also a higher frequency (>50%) allele, is correlated with zinc transport activity. Here, we compared the activity of Arg-325 with that of a low risk ZnT8 variant (Trp-325). The Arg-325 variant was found to be more active than the Trp-325 form following induced expression in HEK293 cells. We further examined the functional consequences of changing lipid conditions to mimic the impact of lipid remodeling on ZnT8 activity during insulin granule biogenesis. Purified ZnT8 variants in proteoliposomes exhibited more than 4-fold functional tunability by the anionic phospholipids, lysophosphatidylcholine and cholesterol. Over a broad range of permissive lipid compositions, the Arg-325 variant consistently exhibited accelerated zinc transport kinetics versus the Trp-form. In agreement with the human genetic finding that rare loss-of-function mutations in ZnT8 are associated with reduced T2D risk, our results suggested that the common high risk Arg-325 variant is hyperactive, and thus may be targeted for inhibition to reduce T2D risk in the general populations.




b

Economy Must Not Get Stuck Between Lockdown and Recovery

2 July 2020

Creon Butler

Research Director, Trade, Investment & New Governance Models: Director, Global Economy and Finance Programme
Despite recent outbreaks in several countries which had appeared to be close to excluding the virus, focusing on suppression and elimination is the best economic as well as health strategy.

2020-07-02-Plane-Virus-Business

An almost empty British Airways passenger plane flies from Milan to London. Photo by Laurel Chor/Getty Images.

Lockdowns are being eased in many countries, but from different starting points in terms of prevalence of the virus, and with different near-term trade-offs between protecting life and easing constraints on economic activity.

The pressure to ease is understandable. The IMF estimates $10tn has been spent so far on official support measures worldwide, and forecasts global GDP will contract by an unprecedented 4.9% in 2020.

However, the WHO director general, Dr Tedros Adhanom Ghebreyesus, recently insisted that there is an ‘urgent responsibility to do everything we can with the tools we have now to suppress transmission and save lives’, even as research into vaccines and therapeutics continues.

Focusing on suppressing and eliminating the virus as quickly as possible is not just the best strategy for saving life, it also makes most sense in terms of minimising the long-term economic damage from the pandemic.

The alternatives remain uncertain

Neither a vaccine nor improved treatment are currently sufficiently certain to be the focal point for an economic recovery strategy. Despite optimism about vaccine development, there is no certainty of a decisive outcome by a given date. And, even if a vaccine proved effective, manufacturing and distributing it to 8bn people will present an unprecedented set of logistical and economic challenges and take many months, if not years.

In the meantime, although substantial progress has been made in reducing loss of life among those made seriously ill by the virus - and who have access to advanced medical facilities - it remains highly dangerous for a significant proportion of the population - around 20% in advanced economies.

An alternative containment strategy based on gradually reducing the prevalence of the virus in the population by maintaining an “R” number (replication coefficient) just below one will be both economically costly and highly risky when compared with a decisive push to eliminate the virus quickly.

With an R number just below one it is true the virus may eventually disappear, but only over a lengthy period, during which economically damaging social distancing measures will have to stay in place, dragging out the impact on both demand and supply.

Wage support measures to limit ‘economic scarring’ will have to be maintained, and kickstarting the economy with a conventional fiscal stimulus will be difficult, if not impossible, especially when the ability - or willingness - of consumers to spend is still heavily constrained either by social distancing measures or a lack of confidence.

There is also a major risk when the R number is close to one that the virus could suddenly take off again, leading to a complete failure of the strategy.

Benefits of suppress and eliminate

A successful policy focused on suppressing and eliminating the virus offers much better prospects. First, the government can then protect the vast bulk of the economy within its territory, even if it means continuing travel restrictions for some time vis-a-vis countries that are less committed to or less successful in eliminating the virus.

Some sectors - particularly long-haul air transport - will be hard hit, but other critical high value or employment intensive sectors - such as domestic hospitality, leisure and the arts - will be able to make a substantial recovery. To put it bluntly, the authorities may have to hold back some sectors to save others. Such a strategy would also ensure an economy can participate sustainably in free travel zones with other countries.

Second, a drive to suppress and eliminate the virus in the shortest possible timeframe, and then maintain that status, will help authorities communicate clearly to the public the overarching framework guiding the application of social distancing measures, and the nature of the ‘new normal’ economy that can be expected to emerge over the medium to long-term.

Achieving such clarity will enhance the public’s trust in the government’s strategy and hence responsiveness to government instructions. It will also minimise unnecessary and costly adaptations by business and increase its ability to target new opportunities arising from the genuine long-term changes brought about by the crisis.

In addition, a suppress and eliminate strategy is the only sure way to address the disproportionate impact of the virus on ethnic minorities and the poor, and to put an end to the isolation of the millions who currently have to shield themselves.

We know that suppressing the virus almost completely within a given territory is possible because some countries have already done it - notably New Zealand, South Korea, and Taiwan. Some which started with a serious epidemic, such as China, Spain and Italy, have also managed to reach a point where almost complete elimination within their territory can be envisaged.

Renewed outbreaks are likely to happen, particularly while the virus remains in active circulation globally. But this does not invalidate the underlying suppress and eliminate strategy.

Key policies to suppress and eliminate the virus include: a rapid and decisive national lockdown to reduce the disease to levels low enough for test, trace and quarantine systems to identify and suppress local outbreaks; social distancing measures for a limited period or in a specific locality to limit spread while, as far as possible, minimising economic impact; and effective quarantine and track systems applied at borders to prevent the disease from being re-introduced by non-essential travellers and returning nationals.

The precise form of these policies is evolving rapidly as we learn more about the virus. For example, if there is a need today to stop a rapidly escalating epidemic in a given territory, it won’t necessarily mean adopting exactly the same package of lock down measures across the board as were applied three months ago. Several activities had to cease then simply because the virus was spreading so fast there was no time to put in place effective mitigation measures. This does not have to be repeated.

In addition, the benefits of the widespread use of face masks are now much better understood. As is the value of deploying a battery of measures, each one only partially effective on its own but, in combination, with a decisive impact. Financial support measures may need to be adjusted or extended to underpin local lockdowns and, at any given point, the authorities will need to work within an overall budget for relaxation measures and prioritise - getting pupils back in school may mean holding back easing of restrictions elsewhere.

Choosing an effective strategy inevitably means making tough choices. Delaying short-term recovery measures, even by a matter of weeks in whole economies or specific localities, can make a decisive difference to delivering a long-term sustainable economic outcome. The authorities may also be forced to hold back some economic sectors, possibly even leading to permanent damage, as the price of a general recovery. But if we are not ready to make these choices, the economy may become permanently stuck in a halfway house between lockdown and recovery.




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Clearer Role for Business Regulators Needed in Monitoring Trade Agreements

6 July 2020

Dr Jennifer Ann Zerk

Associate Fellow, International Law Programme
As the economic recovery from coronavirus is worked through, careful steps are needed to ensure actions to enforce human rights commitments in trade agreements do not worsen human rights impacts.

2020-07-06-Cambodia-Workers-Rights

Garment workers hold stickers bearing US$177 during a demonstration to demand an increase of their minimum salary in Phnom Penh, Cambodia. Photo by Omar Havana/Getty Images.

Trade policy is a blunt instrument for realizing human rights. Although many trade agreements now include commitments on human rights-related issues - particularly labour rights - not everyone agrees that linking trade to compliance with human rights norms is appropriate, let alone effective.

Sceptics point out that such provisions may become an excuse for interference or ‘disguised protectionism’ and admittedly anyone would be hard-pressed to identify many concrete improvements which can be directly attributed to social and human rights clauses in trade agreements.

This lack of discernible impact has a lot to do with weak monitoring and enforcement. A more fundamental problem is the tendency of trading partners to gloss over – both in the way that commitments are framed and in subsequent monitoring efforts – significant implementation gaps between the standards states sign up to, and the reality.

Working from ‘baseline’ international standards and treating each state’s human rights treaty ratification record as an indicator of compliance does offer objective verifiability. But it also means underlying economic, structural, cultural, social, and other problems, often go unidentified and unaddressed in the trading relationship.

Regulatory failings of trading partners

Those with sufficient leverage can use dispute resolution or enforcement proceedings to signal displeasure at the regulatory failings of their trading partners, as recently shown by the European Commission (EC) in relation to labour violations by trading partners – against South Korea under the 2011 EU-South Korea Free Trade Agreement (FTA) and Cambodia under the EU’s Generalised Scheme of Preferences (GSP) scheme.

These actions do show a more proactive and rigorous EU approach to monitoring and enforcement and have been largely welcomed – especially by trade unions – as a necessary political response to persistent failings by the states to address violations of fundamental labour rights. However, claiming any major victories on behalf of the workers who produce the goods being traded seems premature.

The ‘implementation gaps’ - between human rights commitments made in a state-to-state context and the reality of the human rights situation on the ground - mean there may be cases where enforcement action under a trading arrangement, such as the removal of trade preferences, may actually make things worse. Some local unions have expressed concern that the EU action against Cambodia may be detrimental to vulnerable migrant women factory workers, especially in the context of a worsening economic situation due to the pandemic.

Making stakeholder voices heard

There are routes through which people with first-hand knowledge of human rights-related problems arising from trading relationships – such as labour rights abuses in global supply chains – can make their voices heard. Unions have used consultative bodies set up under trade agreements to highlight labour abuses in trading partner countries - this helped to shift the Commission’s strategy towards South Korea.

But the rather vague and open-ended mandates of these consultative bodies, and their reliance on cash-strapped civil society organisations to do much of the heavy lifting, means they are not a solid basis for systematic follow-up of human rights problems.

And yet, every country is likely to have a number of agencies with interests and expertise in these issues. Beyond labour inspectorates, this could include environmental regulators, licensing bodies, ombudsmen, national healthcare bodies, special-purpose commissions, ‘responsible business’ oversight and certification bodies, local government authorities and national human rights institutions.

At present these groups are barely mentioned in trade agreements with monitoring frameworks for human rights. And if they do feature, there tends to be little in the agreement terms to guarantee their participation.

To seriously address implementation gaps, there needs to be much greater and more systematic use of these domestic regulatory bodies in human rights monitoring and enforcement activities. These bodies are potentially vital sources of information and analysis about the many different social, economic, environmental and human rights consequences of trade, and can also contribute to designing and delivering ‘flanking measures’ needed to assist with the mitigation of human rights-related risks or adverse impacts which have been detected.

Looking further ahead, monitoring practitioners may find - as those involved in the EU GSP+ scheme have already noticed - that close and visible engagement with domestic regulatory bodies helps strengthen a regulator in getting clearer political support and better resources. It can also help with greater ‘buy-in’ to human rights reform agendas, creating conditions for a positive legacy in the form of more confident, committed, and capable domestic regulatory bodies.

Paying more attention to synergies that exist between the work of domestic regulatory bodies and the principles and objectives which cause states to seek human rights commitments from their trading partners is a vital contribution to the concept of ‘building back better’ from the present crisis.

The goal should be to move from the present system – which veers between largely ineffective consultative arrangements and adversarial, often high stakes, dispute resolution – to more cooperative and collaborative systems which draw more proactively from the knowledge and expertise of domestic regulatory bodies, not only in the identification and monitoring of risks, but also in the delivery of jointly agreed strategies to address them.

This article is part of the Chatham House Global Trade Policy Forum, promoting research and policy recommendations on the future of global trade.




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Tackling Malnutrition: Harnessing the Power of Business

8 July 2020

Simon Pringle

Associate Fellow, Energy, Environment and Resources Programme
Malnutrition negatively impacts individuals, families, societies and economies around the world. Now is the time to align corporate, government and third sector efforts to relegate it to the past.

GettyImages-1175994321.jpg

A view of a market area in Goma, Democratic Republic of Congo on 10 October 2019. Congo is among the countries with the highest number of acutely malnourished people on a global level. Photo by JC Wenga/Anadolu Agency via Getty Images.

Many people are aware that the scourge of malnutrition affects a vast number of individuals and communities around the world. However, most tend to view it as a problem to be addressed by governments, charities or donors, rather than the corporate sector.

Certainly, when considered at a societal scale, malnutrition makes the complexities of delivering inclusive growth all the harder. It ratchets up the public health burden while restricting the potential for at-risk populations to take part in productive employment.  Economies are hindered, lives are blighted and the potential for people to reach their full potential can be severely limited.

A number of upcoming summits represent a window of opportunity to address nutrition in the context of resilience, particularly in the wake of COVID-19 and the much-referenced ambition for governments to ‘build back better’. The opportunity is there to foster a true partnership between governments, third sector organizations and businesses of all sizes, sectors and geographies to work for the betterment of society and deliver benefits to all participants in such a partnership. 

So what is the role of business in relation to nutrition - where does it sit on their list of priorities and why should it matter to them? A new Chatham House report represents an important contribution to the discussion about the role of business in addressing malnutrition. Through thorough research and direct engagement with businesses, it seeks to find out if malnutrition is on the corporate radar and the extent to which it is considered a material issue.

Surprisingly, whilst many large corporates recognize malnutrition as a matter for concern, this is typically defined only in the context of CSR programmes or related ambitions. These types of commitments have their limitations though; most notably the fact that the communities more severely affected by malnutrition typically sit outside of the sphere of influence of the multi-national companies with the greatest ability to mobilize resources and make an impact. Where populations are marginalized, operating within the informal economy and living in settings that are too fragile for large-scale business investment, corporate CSR programmes are unlikely to have a meaningful impact.

Report Launch: The Business Case for Investment in Nutrition

As COVID-19 pushes UN targets to end global hunger and malnutrition even further off-course, now is the time for businesses to step up and improve nutrition in their workforce and beyond.

The report also asked businesses whether they considered malnutrition to have a material impact on their ability to create value, protect value and manage risk. In the majority of instances the answer was no. This may be surprising, particularly given the evidence provided by new modelling – done for this report using a purpose-built model by Vivid Economics – that illustrates the costs posed to business by malnutrition within a population. On an immediate and direct level, the impacts can be considerable due to lost or reduced productivity from the employee base. However, if even that immediate impact is addressed, the externalities associated with malnutrition can come back and have a negative effect on businesses and investors alike.

When reflecting on externalities and the landscape of risk within which business operates, it is worth considering climate change by way of comparison. Climate change is well embedded in the risk profiling of most progressive and well-managed corporates – although in some instances meaningful action may be well overdue. That said, it is recognized that the direct and indirect impacts have the potential to conspire and permanently reduce shareholder, stakeholder and societal value. 

Similarly, if left unchecked, the externalities associated with malnutrition will undoubtedly contribute to an increased level of risk in terms of both operating and investment environments. This is both an issue of social equity and enlightened self-interest given that good nutrition is key to the success of many of the Sustainable Development Goals (SDGs), and is essential to driving sustainable economic growth. One of the lessons of the COVID-19 pandemic is the manner in which widespread malnutrition can significantly reduce the resilience of populations to external risks, including the outbreaks of infectious disease. We need only to look at the impact of climate stress and related events to understand how closely linked malnutrition is – or may become – to the incidence of social unrest and armed conflict in low-income countries.

Progressive companies and investors have already identified the ability to drive inclusive and sustainable growth as a compelling imperative for investment. In this context, the potential for improved nutrition – both in the workforce and amongst the communities upon which the firms depend – should be a true priority. As fund managers seek increasingly meaningful insight into the way that companies within their portfolio(s) create value, protect value and manage risk, the scope of environmental and social governance is expanding. Many recognize the link between delivering on the SDG agenda and protecting or enhancing shareholder value into the longer term. This is a powerful lever for change, particularly when considering that good nutrition is integral to the success of the ambitions laid out by the various SDGs. Successfully delivering against nutrition-focused targets could unlock growth in developing markets and create an enabling environment for achieving the broader SDG agenda. This may in turn help companies to deliver enduring shareholder value in a way that does not undermine their corporate sustainability commitments.

So, given the insights provided by this report, what can businesses do that have the potential to make a practical and effective impact? There are three main action points around which the private sector can galvanize its efforts and work in partnership to deliver a meaningful impact. 

The first action point is a basic requirement to be proactive and make supportive interventions with existing and future workforces, ensuring that staff are well fed and have appropriate facilities for breastfeeding and childcare. Beyond that foundational commitment, the second action point is to work to build impactful and well-governed partnerships to work within local communities and deliver outcomes at an appropriate scale. The third and final action point sets out the importance of reporting. Businesses should thoroughly assess the impacts of their operations, investments and influence. They should be transparent about those impacts and report both on the current situation and the commitments made to deliver on measurable targets.

Malnutrition is a scourge; it negatively impacts individuals, families, societies and economies. Now is the time to align corporate, government and third sector efforts to consign it to the past. We just need leaders to be bold enough to seize the opportunity.




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Is Evaluating COVID-19 About the WHO or Country Responses?

11 July 2020

Dr Charles Clift

Senior Consulting Fellow, Global Health Programme
Striking the right balance in membership and terms of reference is challenging for the evaluation panel set up to examine the coordinated international health response to coronavirus.

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Examining the global response of indivudual countries and the World Health Organization (WHO) to coronavirus. Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images.

When the resolution was passed by World Health Organization (WHO) member states at the World Health Assembly (WHA) in May requesting an evaluation ‘at the earliest appropriate moment’ of lessons learned from the WHO-coordinated international health response to COVID-19, it was generally thought the appropriate moment would be when the pandemic was on the wane.

Yet the Independent Panel for Pandemic Preparedness and Response has actually been established at a time when - as noted by WHO director-general Dr Tedros Adhanom Ghebreyesus in his announcement of the panel - the pandemic is still accelerating.

In most of the world the virus is not under control, and cases have actually doubled in the last six weeks. So why now?

Emphasis on global solidarity

Throughout the pandemic so far, Dr Tedros has emphasised two main points – the need for urgent action by countries, and the imperative need for global solidarity. In announcing the panel, he said this is the ‘defining crisis of our age’ and that ‘we cannot defeat this pandemic as a divided world … the COVID-19 pandemic is a test of global solidarity and global leadership’.

He may well see establishing the panel now - when the pandemic still has a long way to run - as an opportunity to reinforce messages which have hitherto seemed to fall on deaf ears, notably saying ‘we are in the midst of the battle of our lives, and we have to do better’. And he has also said that we should learn lessons now that will be useful in the continuing fight against the pandemic.

Establishing both the membership of the panel and its terms of reference has been left largely in the hands of the co-chairs – distinguished ex-politicians Helen Clark of New Zealand and Ellen Johnson Sirleaf of Liberia. But they will have to construct the panel in close consultation with member states on the basis of their proposals for membership – a process that will likely be fraught by the divisive politics which have already so upset Dr Tedros.

In addition, embedded in the mandate from the WHA resolution is the phrase ‘WHO-coordinated international health response’ – negotiated language which is intentionally ambiguous and reveals an unresolved tension.

Does it mean the panel should principally focus on WHO’s performance, which is what several countries – including the US – want to see? Or should it give at least equal weight to the way countries have responded individually and collectively, as Dr Tedros and the WHO may want to see?

These different interpretations mean both the construction of the panel and its terms of reference could be highly contentious. Most countries, including China and the US but also others, will not want their responses to be subjected to independent investigation. Nor will they want to include panel members likely to be critical of their responses. This suggests the possibility that there will be political pressure to focus the enquiry principally on the performance of WHO rather than that of countries – an outcome Dr Tedros would not welcome.

It remains to be seen how the co-chairs will manage these highly political issues, and avoid the panel becoming an extension of ‘pandemic politics’ by other means. Can it come to definitive conclusions in the midst of a pandemic and, if so, how likely are they to be heeded?

It is also highly likely that several other reviews will be launched, wholly independently of oversight by WHO and its member states, as happened following the 2014 Ebola outbreak. This provides opportunities for a variety of perspectives on both the performance of WHO, and of individual countries.

Already, The Lancet has announced its own Commission on COVID-19 with a broad mandate covering both the health and economic responses to the pandemic. Both this and the Independent Panel for Pandemic Preparedness and Response are likely to be only the first of many COVID-19 reviews.




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West Bank Annexation: International Rhetoric vs. Action

14 July 2020

Reni Zhelyazkova

Programme Coordinator, Middle East and North Africa Programme

Professor Yossi Mekelberg

Senior Consulting Research Fellow, Middle East and North Africa Programme
Israel may have delayed announcing its plans to annex West Bank lands but the international community now needs to transform its rhetoric into action if there is to be a lasting solution to the Israel-Palestine conflict, argue Reni Zhelyazkova and Yossi Mekelberg.

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Houses are pictured in the Maale Adumim settlement in the West Bank east of Jerusalem. The Israeli government has delayed plans to annex Jewish settlements in the West Bank and in the Jordan Valley. Photo: Getty Images

Observers of the Israel-Palestine conflict have been anticipating Israeli Prime Minister, Benjamin Netanyahu’s, announcement to annex parts of the West Bank. It has been a tumultuous year for Israeli politics which has seen three inconclusive elections and resulted in a sharing of power between Netanyahu and Benny Gantz of the Blue and White party. However, since the coalition government was sworn in, Netanyahu has appeared to not lose any time in moving forward with his plans.

Annexation has long been Netanyahu’s political aspiration and was part of his recent re-election platform but the anticipated announcement from the Israeli government didn’t come straight away. The determining factor in the delay was the inability to reach an agreement with Washington about the scope of the annexation while divisions within the Israeli government itself, in addition to international condemnation from the region and beyond, has also played a part.

Discussions around annexation have so far yielded one major outcome: it has introduced a different rhetoric by the Trump-Netanyahu axis even though things on the ground don’t necessarily follow. Ever since President Donald Trump took office in 2016, there has been a marked change in Washington’s language around the Israel-Palestine conflict. It has shifted towards legitimizing Israel’s expansionist ambitions in the West Bank while marginalizing, and considerably weakening, the Palestinian Authority (PA) through a series of punitive measures.

This has further damaged relations between Israel and Palestine and has resulted in a fundamental change in the public discourse around the conflict, from emphasizing a just solution based on self-determination for both sides, to focusing on a de-facto one-state solution.

But how has the discourse shifted so dramatically in less than four years? First came the announcement of the US embassy move to Jerusalem, and with it, recognition of the city as Israel’s capital. In his statement, President Trump avoided recognizing Palestinian claims over Jerusalem and did not acknowledge their historical connection with the city. When the PA rejected the move, the US administration then retaliated by cutting aid and development funding and closing the PLO mission in Washington stating: ‘We have permitted the PLO office to conduct operations that support the objective of achieving a lasting...peace between Israelis and the Palestinians … However, the PLO has not taken steps to advance the start of...meaningful negotiations with Israel.’

On the question of Israel’s settlements in the West Bank, the current US administration has shied away from calling them ‘illegal’ despite being deemed illegitimate under international law and condemned on numerous occasions by the UN Security Council, the UN General Assembly, the EU, the Arab League and the Palestinians themselves. US Secretary of State, Mike Pompeo, has even gone as far as saying that the establishment of Israeli settlements in the West Bank is not inconsistent with international law.

The culmination of US discourse in recent months has been the unveiling of the ‘Peace to Prosperity’ plan. The language of the proposal, once again, has shown partiality towards Israel by not mentioning the illegality of Israel’s occupation of the West Bank, or that of settlements, and entirely ignoring previous Palestinian positions or acknowledging their sensitivities. There is little doubt that the current US administration understands the power of rhetoric and has been using it to change the trajectory of discussions away from a two-state solution towards an outcome that would only serve Israeli interests.

Indeed, US rhetoric has empowered Netanyahu immensely too, ushering in a new reality that has rendered a Palestinian state nothing more than a hypothetical option. The language, combined with a multitude of unilateral actions, is helping to dismantle any efforts towards a two-state solution and the upholding of previous international agreements.

Many European and regional governments have condemned any move towards annexation. Indeed, 1,000 European parliamentarians from across political lines have urged Israel to abandon its plans. This has notably included, German Foreign Minister, Heiko Mass, whose first overseas visit during the coronavirus crisis was to Israel to reinforce Germany’s position against unilateral action.

But actions speak louder than words, and in the case of the US, its rhetoric has been matched by action unlike its EU counterparts whose statements of condemnation have rarely been followed by concrete action. For instance, the EU ratified a landmark aviation agreement with Israel just days before 1 July and economic, technological and scientific cooperation between Israel and Europe has never been stronger casting doubt on the strength of political will among EU countries to take action against Israel.

In the Middle East, the United Arab Emirates has been the most vociferous in disapproving Israel’s annexation plans. However, again, it is important to look beyond the rhetoric. Cooperation between the UAE and Israel has in fact increased in recent years mainly due to common opposition to Iran’s regional influence but also due to shared interests. In May, for instance, the first publicly acknowledged commercial flight between the UAE and Israel landed at Ben Gurion airport carrying aid aimed at mitigating the effects of COVID-19 in the Palestinian territories. But, to many, it looked like a stepping-stone towards a normalization of relations between Abu Dhabi and Jerusalem.

Similarly, Jordan and Egypt have also expressed their concern but it is difficult to imagine a scenario where either country would go as far as abrogating peace agreements that they currently have in place with Israel.

In spite of this, the global response has overwhelmingly been critical of Israel’s plans to annex parts of the West Bank. This has demonstrated some level of unity among world leaders which has not been seen for some time and may have played a significant role in delaying the Israeli government’s plans. In parallel, united international condemnation has also prevented the US from dominating the Israeli-Palestinian conflict entirely.

While the US approach has played a key role in the Israel-Palestine conflict so far, it remains to be seen how the international community will translate its voice into action to prevent the annexation of occupied Palestinian land.




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Flaring in MENA: The Multibillion Dollar Decarbonization Lever

15 July 2020

Adel Hamaizia

Associate Fellow, Middle East and North Africa Programme

Dr Mark Davis

CEO, Capterio
The climate crisis and ‘energy transition’ is driving a response from the oil and gas industry to decarbonize, with flaring – the deliberate combustion of gas associated with oil production – as a critical lever, especially in the Middle East and North Africa, write Adel Hamaizia and Mark Davis.

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Iraqi Southern Oil Company engineers look towards the flares in the Zubair oil field in southern Iraq. Photo by ESSAM -AL-SUDANI/AFP via Getty Images.

Flaring is a significant source of economic and environmental waste. Except when safety-related, flared gas can often be captured and monetised using low-cost proven solutions.

In doing so, governments can improve health and safety, reduce emissions (of carbon dioxide, methane, and particulates) and add value by driving up revenue, increasing reserves and production, creating jobs and improving the industry’s ‘social license to operate’.

Flare capture also helps countries to deliver on the Paris Agreement and the UN’s Sustainable Development Goal #13 while, for example, providing affordable alternatives for heating and cooking.

The Middle East and North Africa (MENA) region accounts for 40% of the world’s flaring. In the region, flaring has increased year-on-year - apart from 2018 - to almost six billion cubic feet of gas per day, generating up to 300-500 million tonnes of CO2-equivalent emissions per year.

These emissions result not only from the combustion of gas, but also from the venting, from inefficient flares, of un-combusted methane, a more potent greenhouse gas. Yet much of this is avoidable.

There are many commercially attractive options to reduce flaring in MENA. The key is to use the right proven technology and to be agile in commercial structuring. And the prize could be a boost to MENA’s annual revenues by up to $200 per second (up to $6.4 billion per year) by delivering wasted gas to market by pipeline, as power or in liquid form.

The chart highlights the abundance of flaring across the MENA region, and in many cases, their proximity to population centres. While Iran, Iraq, and Algeria generate 75% of MENA’s flaring, Saudi Arabia, Kuwait, UAE and Qatar are notable for their relatively low ‘flaring intensity’ i.e. flaring normalized to oil production.

In today’s world of lower energy prices, it makes sense to monetise every molecule. Even more so for national oil companies, which are responsible for most of the flaring, since they are not only the custodians of their countries’ natural resources, but they also generate a dominant source of government revenue.

Most oil producers in MENA have already made commitments to the World Bank’s flaring-reduction initiatives (e.g. ‘Zero Routine Flaring by 2030’), but to date, delivery is mostly lacking. Three main issues have hindered progress.

Firstly, operators, regulators, and governments highlight that flaring is often not ‘sufficiently on the radar’. Flaring is often underreported if not ignored or denied - although satellite detection gives unavoidable transparency. In MENA alone, more than 1,700 flare clusters are visible every day from space.

Secondly, flare capture is sometimes not perceived to be economically viable due to costs, taxes, or inappropriate technology. Thirdly, there are often issues around resources, especially concerning management bandwidth, delivery capabilities or financing.

Yet these issues can be solved if the right proven technologies are combined with the right commercial structures. To accelerate flare capture projects, stakeholders in the MENA hydrocarbons sector must consider several complementary, action-oriented initiatives.

In particular, they should:

  • Promote transparency and disclosure to drive greater awareness of flaring. Governments, regulators and operators must understand the real scale of their gas flaring opportunity and be capable of acting, as a recent report for the EBRD on Egypt highlighted. Compliance with clear standards for measuring, monitoring and verification is critical.
  • Advance policies and incentives which encourage action. Better commercial terms will incentivise and accelerate flare investments. Stronger penalties will help, but independent and capable regulators must actually enforce these penalties. Through the use of such clear anti-flaring policies, Norway’s flaring intensity is almost 20 times lower than the MENA region.
  • Improve the investment climate, beyond economics and open access to a broader range of players. Local market failures can be avoided by reducing the complexity and cost of in-country operations and by removing excessive, rigid, or redundant regulations. By enabling greater ‘third-party’ access to gas and power projects and infrastructure, new players can accelerate change by deploying new technologies and new operating models. Better third-party access will also unlock ideas, capital, skills and project-specific financing options. Algeria is making steps towards such liberalisation through its new 2019 Hydrocarbon Law.
  • Reduce subsidies and improve energy efficiency and reduce demand, increase gas exports and boost national revenues. Countries with large subsidies on transport fuels and power, such as Algeria and Iraq, stand to gain the most.
  • Encourage collaboration between stakeholders in industry and government by creating working groups to radiate best practices, build capacity, deploy technology and local content, such as the flare minimization programme in Saudi Arabia or Iraq’s major flare-to-power project operated by the Basrah Gas Company.

The industry needs to prepare for a greener world after COVID-19 and investors and consumers are demanding cleaner fuels. Since gas is widely viewed as a transition fuel, MENA governments and stakeholders must work to eliminate its wastage and seize the revenue, production and environmental opportunities that flare capture projects offer.

There is much new leadership in the region in government and critical institutions with new mandates for change. The time to act is now.




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The Folly and Risk of Lopez Obrador’s Washington Trip

15 July 2020

Arturo Sarukhan

Associate Fellow, US and the Americas Programme (based in the US)
President Andres Manuel Lopez Obrador’s decision to travel to the US was met with concern and incredulity in Mexico and bafflement among many Democrats in the US. Being seen as a close ally to Donald Trump could be detrimental to the future of bilateral relations.

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Demo against Donald Trump's migration policies at the San Ysidro port of entry in Tijuana, Baja California state, Mexico. Photo by GUILLERMO ARIAS/AFP via Getty Images.

For a leader who had not travelled abroad since his inauguration – skipping G20 and APEC summits and the UN General Assembly – and who is probably one of the most intellectually incurious and disinterested Mexican presidents of the modern era when it comes to global issues, President Andres Manuel Lopez Obrador could have certainly waited until after the US elections in November to travel to Washington and personally engage with President Donald Trump .

Instead, Lopez Obrador – who has sought at all cost to avoid conflict with his US counterpart, having decided that bending the knee was a better option than standing his ground with Trump – waded straight into electoral politics in the US, despite his repeated assurances to the contrary.

The decision to travel now to Washington was fraught with political and diplomatic challenges, not least the fact that President Trump will use President Lopez Obrador as an electoral prop.

To American audiences, at a time when the US is riven by social and political convulsion unseen in 50 years since the Vietnam War and the civil rights movement, meeting with Trump in Washington just before the general campaign starts was seen by many as a pat on the back for a polarizing and unpopular president.

In Mexico, most discussion has been about the merits and timing of the visit, with one El Financiero newspaper poll conducted a week before showing public support (59%) for the trip, while a post-visit Reforma newspaper survey showed that a substantial majority of those polled (69%) believe a Biden victory in November is a better outcome for Mexico.

While it’s true that Lopez Obrador returned to Mexico unscathed, his visit – and his baffling Rose Garden remarks stating that Trump (the most anti-Mexican US president in modern history) has shown respect to Mexico and Mexicans – is certainly a slap in the face to migrants in the US, 11 million of whom are Mexicans, to American NGOs and activists that defend the rights of migrants and enlightened immigration and asylum policies, and a boon to Trump’s dog-whistle xenophobia and chauvinism.

Lopez Obrador’s words added insult to injury by asserting the US president has never imposed anything on Mexico, blithely ignoring Trump’s March 2019 threat to impose punitive tariffs on Mexico unless the country deterred and stopped Central American transmigration flows through Mexico on their way to the US.

Certainly if the purpose of the visit was to celebrate the July 1 entry into force of the USMCA – a spin made even more hollow by the fact that Canadian Prime minister Justin Trudeau decided to skip the event – then Lopez Obrador should have been reaching out to the Speaker Nancy Pelosi and the Democratic leadership to meet and thank them too, given the important role they played in supporting the revamping of NAFTA and the ratification of the USMCA.

The best-case scenario is that the meeting between the presidents will be leveraged by both governments to address looming hurdles with the entry into force of the USMCA.

But Trump still seems intent on wielding punitive tariffs and mercantilist measures to extract concessions from either Canada or Mexico. And across the border, the Lopez Obrador government – and his party in Congress – continue enacting abrupt policy shifts and changes to the rules across different sectors of the economy that bode ill for the level playing field required under the USMCA.

What could have easily been achieved via a virtual event has now morphed into a second successive Mexican government jumping on the Trump electoral bandwagon, after Enrique Peña Nieto’s ill-advised invitation to then-candidate Trump to travel to Mexico, and a new opportunity for the US president to ‘pimp’ Mexico for his campaign purposes. Perceptions have certainly deepened among Democrats that Lopez Obrador prefers to see Trump re-elected.

Although Lopez Obrador’s aim was to buy Mexico time between now and January of next year by hoping this visit will contain Trump’s anti-Mexican tirades on the campaign trail, whether or not Trump stops using Mexico as a political-electoral piñata is yet to be seen. I would not hold my breath.

Moreover, for a leader whose default position is ‘the best foreign policy is domestic policy’, the trip lays bare a paradox in Lopez Obrador’s mantra. It is precisely Mexico’s domestic weaknesses and failings that create foreign policy vulnerabilities, particularly vis-à-vis the Trump administration. And it is likely these will be used in the coming weeks and months to once again to pressure Mexico in what has become Trump’s ‘Sinatra Policy’ towards his southern neighbour: 'My Way'.

Perception is indeed reality, and Lopez Obrador – and more importantly Mexico – can ill-afford to be perceived as Trump’s patsies at this juncture of American history. As many expected, it only took four hours after President Lopez Obrador’s White House remarks for Trump-supporting Hispanic-outreach social media accounts to start piggybacking on them. Campaign officials have also specifically said they will likely use his quotes in TV ads aimed at Hispanic voters later this year.

In addition, there is a potentially bumpy road ahead for Mexico’s relationship with the Democratic Party. The statements and tweets issued by former vice-president Joe Biden, Biden campaign surrogates and officials, prominent Hispanic Democrats in Congress, and the Democratic National Chair signal as such, as does a letter sent the same day of the visit by Democratic representatives regarding outstanding labour issues in Mexico related to USMCA compliance and enforcement.

This trip could have a long-standing impact for Mexico’s relationship with the US – and US society – and the voters that will determine the future of this country in the decades to come. Lopez Obrador’s meeting with Trump could well become a ‘travel now, pay later’ moment in Mexico-US relations.




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Emerging Economies: Where is the Debt Problem?

16 July 2020

David Lubin

Associate Fellow, Global Economy and Finance Programme
Just two months ago it appeared self-evident that emerging economies faced a devastating inability to service their foreign debt, mostly denominated in dollars. That has turned out to be wrong, for now at least.

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Yes Bank branch of Malcha Marg, in New Delhi, India. Photo by Vipin Kumar/Hindustan Times via Getty Images.

Back in April, nervousness about external debts reached its peak when highly-respected economists Carmen Reinhart and Kenneth Rogoff suggested emerging economies with less than a AAA credit rating be offered a moratorium on all their external debt service payments.

Although such a proposal might make sense if emerging economies were actually facing any serious shortage of access to foreign exchange, it is a difficult case to make. What we should worry about is not the external debt of emerging economies, but rather the large increases in government debts denominated in their own currencies.

In the first six months of 2020, borrowers from emerging economies issued more than $400 billion of Eurobonds to international investors, up by one-fifth over the same period in 2019. Most of these bonds were sold by borrowers with relatively high credit ratings, but many of the poorest countries do not fear for their access to international capital markets - largely because the US Federal Reserve increased global supply of dollars to a point where their availability is beyond question.

Much of the panic about emerging economies’ external debt comes from ‘sticker shock’ - the bald fact that developing countries’ external debt rose by $4.1 trillion in the decade to 2018 generates much hand-wringing.

But the increase in gross external debt of developing countries looks a lot scarier than the net increase in debt, which sets off a country’s foreign assets - mostly foreign exchange reserves - against its liabilities. And it is net that counts.

At the end of 2018, foreign exchange reserves covered 70% of the external debt of low and middle income developing countries - much lower than a decade ago, when that coverage was above 100%. But in the 1980s and 1990s – two decades of financial instability largely because of excessive foreign debt – the coverage was 15%. By that measure, we are far from crisis territory.

Complacency about the external debt burden of developing countries is quite wrong. But, if complacency is misplaced, so is panic.

The debt growing most worryingly is the domestic debt of governments. There are large, systemically important emerging economies who will suffer eye-watering increases in public debt this year thanks to a combination of collapsing GDP and the fiscal effort needed to save lives.

In Brazil, public debt is rising from 75% GDP last year to a level that could top 100% in 2020. South African public debt is rising from just over 60% last year to something close to 80% GDP. These are truly unprecedented levels of debt.

So why worry about a government’s domestic debt? These are debts which are denominated in these countries’ own currency. So surely the central bank can just print the currency needed to repay their obligations if more conventional solutions – such as tax increases – will not work.

But it is one thing for the US Federal Reserve to increase supply of dollars on a massive scale, since the world is hungry for them - it is quite another thing if emerging economies do the same with their currencies which almost entirely lack the many attractions of the dollar. That remains the currency of the pre-eminent global superpower whose capital markets offer legal certainty and depth of liquidity. And other highly developed economies have a similar privilege.

And yet printing money – in effect, asking the central bank to finance budget deficits – does seem as though it could become a more attractive option for many emerging countries. Importantly, international fund managers have lost interest in buying bonds issued by emerging economy governments in their local currencies. Just a few years ago, foreign investors owned more than 40% of South Africa’s public debt. That has fallen sharply to 30% and is unlikely to rise.

Monetising budget deficits was once anathema, since it was routinely associated with uncontrolled rates of inflation - bad news not only for firms trying to decide whether to invest but also for the poor, who suffer disproportionately when inflation accelerates.

Right now there are emerging economies – such as Indonesia – whose central banks lend directly to the government, and the sky has not fallen in. The rupiah has been remarkably stable this year. However, there are other examples – Argentina, Turkey – where central bank financing of government deficits has been associated with uncomfortably high inflation rates.

This needs careful watching. The biggest risk is the accumulation of public debt threatening longer-term growth. If firms stop investing because they worry about the risks to the value of their currency as domestic public debt explodes, emerging economies will have a tough time growing their way out of these debts.

It could be this, rather than the external debt of emerging economies, that is the biggest risk to the post-coronavirus economic environment in the developing world.




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New Fighting Brings Three-year Armenian-Azerbaijani Truce to an End

16 July 2020

Laurence Broers

Associate Fellow, Russia and Eurasia Programme
Deadly clashes at the border between Armenia and Azerbaijan have followed renewed disappointment in the peace process, and cast a new shadow over its future.

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A man shows a piece of shrapnel after attacks carried out by the Armenian army at Dondar Kuscu village near Tovuz, Azerbaijan. Photo by Aziz Karimov/Getty Images.

Although the Armenian-Azerbaijani conflict is focused on the Line of Contact around Nagorny Karabakh, a new - and significant - outbreak of violence has happened some 300 kilometres away on high ground along the de jure Armenia-Azerbaijan border.

Although not a first, violence in this area has generally been contained by the proximity of major transport and infrastructure arteries, and of civilian populations on both sides of the border. Plus, unlike in Nagorny Karabakh, the extended deterrents conferred by Armenia’s membership of the Collective Security Treaty Organization (CSTO) and bilateral agreements with Russia are also – theoretically at least – in force.

Despite this, battlespaces opened rapidly, with bombardment of civilian homes, drone strikes and cyberattacks on government and other sites being widely reported by both sides. At the time of writing, combined reported casualties were already at least 16, the highest for a single incident since April 2016’s ‘four-day war’.

Most are known to be Azerbaijani combatants, including the highest-ranking Azerbaijani serviceman to be killed in action since the 1990s – the respected Major General Polad Hashimov. And, although rumoured to be removed soon anyway following a campaign of negative briefing, Azerbaijani foreign minister Elmar Mammadyarov was publicly blamed in the immediate aftermath for ‘meaningless’ diplomacy and dismissed. He was replaced by education minister Jeyhun Bayramov.

Origins of the clashes

How the fighting began remains unclear. The escalation did not appear to result from a coordinated offensive operation of the kind that led to the four-day war, nor are there obvious strategic goals for either side in terms of the international border. There does appear to have been an element of surprise as an Azerbaijani vehicle unexpectedly encountered a new Armenian post, triggering deadly artillery exchanges.

Unclear boundaries in highland terrain may have played a role. Although referred to as the international border, the de jure boundary between Armenia and Azerbaijan - previously an inconsequential internal administrative boundary in the Soviet Union - is not clearly demarcated in many areas and does not coincide with lines of actual control.

Here, as in Nakhichevan - Azerbaijan’s exclave bordering Armenia and Iran - Armenian and Azerbaijani forces have been engaged in long-term, incremental competition for tactical advantage by claiming higher ground in ‘no man’s lands’. But in remote and cartographically ambiguous areas, the precise location of borders - and even place-names - are unclear, and rival forces can unexpectedly meet their adversaries.

Although clear strategic objectives appear absent, what might then have been a lesser incident escalated purposefully into a crisis – suggesting a political rationale.

A missed opportunity for a negotiations reset

Both Armenia and Azerbaijan began 2020 with unfinished consolidations of domestic power - whether bottom-up in the case of Armenia’s ‘Velvet Revolution’, or top-down in the case of Azerbaijan elite renewal. COVID-19 then added further challenges, with the government of Armenia facing significant domestic criticism for its handling of the pandemic, while numerous opposition activists in Azerbaijan were arrested, and the country’s economic vulnerability to external shocks was highlighted.

But throughout this, the frontlines did remain calm - as they generally have since the three-year period from 2014-2017 which witnessed regular skirmishes, use of heavy weaponry and four days of intensive combat in April 2016. In January 2019, the OSCE Minsk Group made the often-cited announcement that the foreign ministers of Armenia and Azerbaijan had agreed on the necessity of ‘preparing their populations for peace’.

Although the quietest year on the frontline since the 1990s then followed, neither side invested seriously in a peace strategy. After a reasonable start and moves towards humanitarian cooperation, relations between President Ilham Aliyev and Prime Minister Nikol Pashinyan eventually visibly soured.

Several moves, such as the go-ahead for new infrastructure in the occupied territories and Pashinyan’s attendance at de facto leader Arayik Harutyunyan’s inauguration in Nagorny Karabakh, were received in Azerbaijan as evidence of Armenian insincerity towards the peace process.

More inflammatory rhetoric then resumed, leading the OSCE Minsk Group to call for calm at the end of June. As recently as July 7, President Aliyev expressed public criticism of the peace process and emphasised the validity of Azerbaijan’s right to use force.

Each new round of Armenian-Azerbaijani fighting serves as an audit of the various restraining factors preventing a larger war. A Russian-Euro-Atlantic-Iranian consensus on proactively containing any new Armenian-Azerbaijani war appears to still hold, although senior-level attention from US secretary of state Mike Pompeo trailed that of his counterparts.

Russia acted quickly to offer mediation, reflecting the reality that any large-scale Armenia-Azerbaijan war would test Russia’s extended deterrence guarantees to Armenia. As in April 2016, Turkey has been vigorous in its support of Azerbaijan, raising concerns in Armenia and drawing oblique warnings from Russia. On the other hand, the CSTO - much to Armenian chagrin - dithered, initially calling then postponing a meeting citing the need for more time to study the situation.

Unprecedented spontaneous demonstrations in Baku called for war with Armenia, broke into the Azerbaijani parliament and, in some cases, articulated anti-government slogans. In the absence of reliable polling, such protests cannot be taken as evidence of a popular consensus in favour of war.

But they do underline the importance of the conflict as the one issue in Azerbaijan where open protest is accepted as legitimate and cannot easily be dispersed. As losses over the past week are counted, the dismissal of the foreign minister may not be sufficient to quell public anger.

Prospects are now real of a return to the dynamics in 2014-15: recursive low-level violence aimed at influencing the diplomatic calendar and public opinion while remaining below the deterrence threshold for triggering active external involvement.




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EU Budget Battle Could Undermine its International Ambitions

17 July 2020

Alice Billon-Galland

Research Associate, Europe Programme

Vassilis Ntousas

Stavros Niarchos Foundation Academy Fellow, Europe Programme
EU’s heated budget negotiations risk producing a compromise at the expense of its longer-term international agenda.

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German Chancellor Angela Merkel (L) talks with French President Emmanuel Macron (C) and President of European Council Charles Michel (R) during an EU summit on 17 July 2020 in Brussels, Belgium. Photo by Thierry Monasse/Getty Images.

With all EU economies still reeling from COVID-19, the ongoing heated deliberations on the bloc’s next budget, which will determine the amount of money matching its priorities for the next seven years, have taken on an urgency rarely felt in Brussels.

Relying in part on an unprecedentedly large volume of jointly issued debt, the European Commission’s plan for a €750 billion coronavirus recovery instrument is embedded within a revamped proposal for the EU’s long-term budget, of €1.1 trillion for the 2021-27 period. 

Now the ball is in the member states’ court. All seem to agree that getting the EU budget right is crucial to fostering an economic recovery and ensuring the Union is on the right track towards its long-term pre-COVID objectives, from increasing its strategic autonomy to reaching climate neutrality by 2050. However, stark differences persist as to what that means in practice.

Most of the core divisions predate the pandemic’s outbreak. In a special European Council meeting in February, leaders failed to find common ground on the Union’s first post-Brexit budget. Net contributor countries, such as Austria, Denmark, Sweden and the Netherlands — the so-called ‘Frugal Four’— refused to agree to higher overall spending and instead advocated for cuts in the Common Agricultural Policy or cohesion funds, meeting the resistance of states like France and Portugal.

These early divisions foreshadowed the risk of a budget compromise that would leave little space for new policy priorities. The COVID-induced economic crisis has made a traditionally fraught political process even more difficult, putting the squeeze on what were previously priority areas of funding.

The Frugal Four agree on the need for the coronavirus recovery plan but vehemently oppose the volume of grants or the issuance of too much common debt in the proposed instrument, reflecting the unpopularity of these proposals with their domestic audiences. Hungary has also threatened to derail progress on the EU’s rescue plan if rule of law criteria are weaved into mechanisms for the allocation of EU funding.

As European leaders reconvene at the 17-18 July Council meeting, EU Council President Michel proposed a revised 'negotiating box' in preparation for the discussions. The document, which tries to bridge these intra-bloc divisions, bolts the demands for short-term recovery onto the EU’s longer-term ambitions. For instance, it sets an increased target of 30 per cent of funding to go toward climate-related projects, which is necessary for the Union’s green transformation. It also retains the link between the rule of law and EU funding — despite Budapest’s opposition — which is critical for the bloc’s internal accountability and transparency, and external credibility. Furthermore, it proposes a set of new mechanisms through which the EU can sustainably raise its own revenue, including a plastics levy as well as more controversial carbon border tax and digital levy.

Yet in several other critical ways, Michel’s proposals fall short. This is particularly true for some of the more ‘geopolitical’ goals of the Union, as previously expressed by Commission president Ursula von der Leyen, or the repeated calls by the Union’s high representative that the EU should learn to use the language of power.

For all the rhetoric around the EU’s need to boost its ability to act more autonomously in the field of security and defence, reductions in important thematic programmes in this domain could result in a critical loss of momentum, if confirmed. For instance, in Michel’s proposals, flagship defence initiatives such as the European defence fund and the military mobility plan are facing cuts of about 39 per cent and 74 per cent respectively (to some €7 billion for the former and €1.5 billion for the latter) compared with the initial Commission proposal of 2018.

Moreover, the tragic developments at the Greece-Turkey border in the beginning of the year might have brought migration back to the forefront of the EU’s attention, but the overall funding for migration and border management is also significantly lower compared to initial proposals. This serves as another example of a discrepancy between the figures on the table today and those that the EU commission had previously regarded as necessary to address the challenges the bloc faces.

Similarly, under the Council president’s latest proposal, the combined funding allocated for the EU’s external action (under the ‘Neighbourhood and the World’ heading) is lower than the figures in the Commission’s May announcements – from €118.2 billion to €113.9 billion overall. This represents an increase compared to the previous EU budget, but it is not in line with the elevated ambitions recognized by the Commission in May, which have only been made more compelling by the pandemic.

Brokering a deal in EU budget negotiations has always been a brutal affair, requiring sacrifices and compromise under the pressure of a ticking clock. 2020 was never likely to be an exception to this rule; but the pandemic has complicated the politics and raised the stakes.

The risk is that the budget negotiations lead to a compromise which, while delivering a historic coronavirus package, does not adequately support some of the key elements of the Union’s long-term agenda, especially its international ambitions.




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Unrest Threatens Ethiopia’s Transition Under Abiy Ahmed

24 July 2020

Abel Abate Demissie

Associate Fellow, Africa Programme

Ahmed Soliman

Research Fellow, Horn of Africa, Africa Programme
Ethiopia is experiencing a turbulent transition. The uncompromising approach of political forces threatens to tear the country apart and reverse the hard-won gains made in recent years.

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Burned buildings which were set on fire during the violence after the assassination of Oromo's pop singer Hachalu Hundessa are seen in Shashamene, Ethiopia on 12 July 2020. Photo: Getty Images.

Violent unrest in Addis Ababa and the surrounding Oromia region has led to the loss of over 177 lives, with the detention of thousands and widespread destruction to property. The rise of identity-based conflict and related political tension is the most severe test of Prime Minister Abiy Ahmed’s leadership since he came to power two years ago.

Protests erupted after the assassination on the 29th of June of Hachalu Hundessa, a prominent Oromo singer and activist. They spiralled into widespread rioting, looting and arson which devastated some towns. Targeted attacks and killings, particularly against ethnic minorities in Oromia, have damaged communities’ social fabric and heightened regional tensions.

The motives behind Hachalu’s murder are not fully understood. Suspects linked to a militant faction of the Oromo Liberation Front (OLF) have been arrested, while the government has blamed the Tigray People’s Liberation Front (TPLF) and certain prominent activist-politicians for inciting ethnic violence and attempting to derail Ethiopia’s fragile political liberalization. With investigations not yet concluded, any exploitation of this tragedy for political gain and without adequate due process is likely to further erode trust in the government and public institutions. 

Ethiopia’s progress halting under Abiy Ahmed

The prime minister came to power with a vision of national unity – encapsulated in his ideology of Medemer – and implemented a raft of reforms aimed at strengthening institutions and increasing political space, inclusivity and freedoms. Abiy was awarded the 2019 Nobel Peace Prize for Ethiopia’s rapprochement with Eritrea, alongside domestic progress. He was lauded for mediating within the region, including in Sudan following the ouster of Omar al-Bashir.

However, Ethiopia’s simmering ethnic and political divisions have deep roots, with structural problems that have been insufficiently addressed under Abiy’s helm. These include conflicting narratives about Ethiopia’s history, an unfinished federal project and tensions over the division of power between the centre and the regions.

There is also the desire for better representation from various ethnic groups, linked to the pursuit of greater autonomy in many places, notably in the ethnically diverse southern region. Reforms have increased expectations among competing constituencies, heightening tensions further.

There are signs that Ethiopia is sliding dangerously backwards, particularly on security and democracy. The country has seen worsening levels of militant ethno-nationalism and inter-communal violence, a dangerous standoff between the federal government and Tigray region, and an increase in politically motivated deaths.

This has been compounded by the government turning to familiar, heavy-handed and securitized responses to law and order challenges, including intimidation and mass arrests of civilians, opposition politicians and journalists, and shutting off the internet. The Ethiopian Human Rights Commission called for security forces to refrain from punitive measures and pursue conciliatory approaches in implementing the state of emergency measures brought in to deal with COVID-19.

The country is also facing a triple economic shock caused by the pandemic, renewed instability and devastating desert locust swarms. The IMF recently reduced Ethiopia’s GDP growth projections for 2019/2020 to 3.2 percent down from 6.2 percent and the country has estimated that 1.4 million workers will be affected by the pandemic, particularly in the service and manufacturing sectors.

The impact on agriculture, which accounts for a third of GDP and on which most Ethiopian’s depend for their livelihoods, is expected to be severe. In addition to shaking investor confidence, the likely impact on livelihoods, food security and poverty levels makes it harder for the government to maintain public support and could add to instability.

Political turmoil caused by election delay

The situation has been exacerbated by the indefinite postponement of elections that were due in August 2020, as a result of COVID-19.

Efforts to avoid a crisis of legitimacy for the government caused by the end of parliament’s term in October 2020, led to a decision on the way forward being taken by the Council of Constitutional Inquiry (CCI). This group of legal experts led by the President of the Supreme Court, gave the ruling Prosperity Party (PP) an open-ended extension of their term, rubberstamped by the House of Federation, with no limits set on their powers during the interim period.

This decision sets a dangerous precedent and is a missed opportunity to achieve compromise and advance the democratic process. The lack of inclusion has angered opposition groups, with whom the government has had little genuine dialogue. Many in the opposition had advocated for a transitional or technocratic government during the interim, despite risks of further divisions and a vacuum of authority, and accuse the PP of manipulating institutions to stay in power.

Furthermore, the TPLF, the ruling party in the Tigray region and formerly the dominant national political force, is pushing forward with its intention to hold unilateral regional elections. It formed a new regional electoral commission, in spite of objections from the national electoral board and the government, which has implied it could use force to stop the elections. This rising enmity between the PP and the TPLF is extremely worrying and requires immediate de-escalation.

A pathway to genuine dialogue and reconciliation

Ethiopia’s problems can only be resolved through dialogue, compromise and reconciliation. Escalating tensions, particularly between the federal government, Tigray and Oromo opposition groups risk furthering instability and fragmentation. One way to establish confidence would be for a group of respected Ethiopian personalities (elders and religious leaders) to lead a political dialogue, with actors carefully chosen and vetted to ensure the buy-in of government, opposition parties and the public, and supported by Ethiopia’s regional and international partners.

Once established, an initial goal of such a platform would be to induce elites, populist leaders, activists and influential regional media to stop exploiting division and violence for narrow gain. Priority agenda issues include the election timetable and required institutional and legal reforms, the role of the opposition during the interim period, strengthening reconciliation efforts, and the need to carefully manage autonomous security forces within regional states.

The prime minister can still weather the storm and implement his vision of a unified multinational Ethiopia based on the values of democracy, rule of law and justice, but only if the government and other stakeholders do all they can to reduce tensions and preserve peace at this critical juncture. COVID-19 and the associated economic impacts have deepened the country’s multifaceted problems, which can only be resolved by political actors committing themselves towards inclusive dialogue and reconciliation, as they seek to forge a shared common future.




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UK Should Focus on Better Defining Objectives in the Sahel

22 July 2020

Dr Alex Vines OBE

Managing Director, Ethics, Risk & Resilience; Director, Africa Programme
The Sahel is one of Africa’s poorest and most fragile regions witnessing an escalation in jihadist activity and illegal migration, writes Alex Vines.

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Pictured is a Nigerian refugee living in the Awaradi settlement that houses some 9,000 displaced people fleeing violence from Boko Haram. Image: Getty Images.

The UK has been redeploying diplomatic, defence and development capabilities towards the Sahel since 2018 – a strategic pivot intended to deliver development impact, address long term security threats to UK interests and support alliances with international partners.

The Sahel is one of Africa’s poorest and most fragile regions and has witnessed an escalation in jihadist activity, illegal migration and trafficking since a security crisis erupted in Mali in 2012.

The crisis spread to Niger and Burkina Faso and may now spill over into Côte d’Ivoire, Ghana and Senegal. With Nigeria also facing insurgency in the Lake Chad basin, all major regional security and economic anchors in the region are under threat including key UK partners. 

Reviewing the Sahel pivot

This pivot has already resulted in the expanding of UK embassies in Senegal, Mauritania and Mali and public commitments to opening new ones in Chad and Niger.

Back in London, there has also been a large uplift of staff including the setting up of a cross-Whitehall Joint Sahel Department in late 2018 and plans for more UK civil servants to have placements with the French government on the Sahel.

Yet in light of looming economic shocks from Brexit and Covid-19, there has been a lively debate in Whitehall on whether this is stretching UK resources too thin in an area of Africa that does not have close ties with the UK.

UK ministers are this week reviewing the Sahel pivot and will decide if it continues or grinds to a standstill including whether full embassies are opened in Niger and Chad.

This debate is not new. The UK has opened and closed its diplomatic missions in the Sahel in fits and starts since the early 1960s. More recently, MI6 pushed the re-opening of the embassy in Bamako in 2010 foreseeing Mali’s fragility before the current crisis started.

Partnering with the French

But though the Sahel is likely to dominate the Africa peace and security agenda for decades to come, the UK’s serious engagement in the region is not just about strategic foresight.

It also fulfils two other objectives: of partnership with two key bilateral allies, particularly France, and authority and leverage in multilateral fora such as the United Nations, African Union and the EU.

Partnering with the French in the Sahel has become even more important due to Brexit and the need to reinforce relationships with key European partners.

In 2012, David Cameron concluded that the rapid French response to stop a jihadist advance on the Malian capital Bamako was 'in our interests' and authorized the deployment of 330 UK military personnel, two cargo aircraft and a surveillance plane.

In July 2018, the UK announced further support to French led Opération Barkhane sending three Royal Air Force Chinook helicopters – supported by almost 100 personnel  which remain in theatre to this day.

UN commitment

Demonstrating the UK’s commitment to UN peacekeeping has also resulted in the deployment of 250 troops to join a UN peacekeeping mission to Mali later this year.

Based in Gao, these troops will form a long-range reconnaissance capability providing threat awareness, contributing to the protection of civilians and helping to prevent conflict from spilling over to neighbouring states.

This represents one of the biggest British peacekeeping deployments since Bosnia and it will be the most dangerous mission for British forces since Afghanistan.

The UK is also one of the largest humanitarian donors to the region and has contributed over £500 million in bilateral development and humanitarian assistance since 2015.

With COVID-19 now an additional challenge in the Sahel, a significant part of the UK’s £764 million contribution to the global COVID-19 effort will be channelled to the region.

New embassies are 'global Britain' strategy pillars

Keeping an eye on the impact of these initiatives requires a meaningful UK diplomatic network on the ground.

New embassies in the Sahel cost a fraction of maintaining three Chinook helicopters in the region providing the government real time insight in the post-Brexit absence of a regular supply of country analysis from the European External Action Service and support for the UK’s international relationships.

It also underlines the UK’s commitment to UN peacekeeping and standing as a permanent member of the UN Security Council in light of regular discussions of the Sahel.

The tripartite ministerial review of the Sahel pivot by the secretaries of state for foreign affairs, international development and defence that is underway should not penny pinch by reversing the opening of small embassies in Niger and Chad nor threaten the overall strategic focus on the Sahel – most recently welcomed by the House of Lord’s Select Committee on International Relations and Defence in its July report on UK Africa policy.

Instead, UK ministers should focus on better defining what the UK’s specific objectives are in the Sahel and particularly what the UK plans to do about Burkina Faso whose rapidly deteriorating security threatens to over-spill into key UK partner Ghana.

This article was first published in the Daily Telegraph.




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Russia’s Behaviour Risks Weaponizing Outer Space

27 July 2020

Dr Beyza Unal

Deputy Director, International Security Programme

Mathieu Boulègue

Research Fellow, Russia and Eurasia Programme
With negotiations in Vienna between the US and Russia hoping to prevent the weaponization of space, how much do Russia’s satellites pose a threat to the peaceful use of outer space, ask Beyza Unal and Mathieu Boulègue?

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Russia's President, Vladimir Putin, during a video link with cosmonauts on the International Space Station (ISS). Photo: Getty Images.

Days before the publication of last week’s report into Russian activity in the UK, and the subsequent call from several UK parliamentarians for a swift response to the ‘Russian threat’, Russia tested a new anti-satellite weapon capability releasing a small projectile from its Kosmos-2543 sub-satellite.

Kosmos-2543, a small satellite contained inside a larger satellite, Kosmos-2542, and 'birthed’ into orbit in late 2019, recently came under scrutiny in January 2020 when it was reportedly caught ‘buzzing’ US spy satellites in Low Earth Orbit.

By releasing a small projectile from the Kosmos-2543 sub-satellite, the US claims that Russia has launched a new projectile into orbit with relatively high speed – estimated at around 500 km per hour – leading to concerns about the potential of Russia to develop this technology as a weapon to target foreign satellites.

It is not the first time Moscow has relied on a Russian doll – or matryoshka – approach to launching satellites into outer space. In October 2017, a sub-satellite, Kosmos-2521, was ejected from its main satellite, Kosmos-2519, into a high-speed object in low orbit.

The Russian Ministry of Defence has declared that its latest activity is just for ‘routine’ inspections and surveillance of Russia’s other space assets, with the government’s official statement avoiding recognizing the existence of the new object while, at the same time, Kremlin spokesperson, Dmitry Peskov, recalling Russia’s commitment for the ‘complete demilitarization’ of space.

While it is possible that Russia’s matryoshka satellites have indeed been developed to carry out routine repairs of Russia’s space fleet, they also have the potential to interfere with, and destroy, other satellites with such action needing to be considered a threat until Russia demonstrates otherwise.

Russia’s use of outer space

Russia is not the only state investigating anti-satellite weaponry capabilities. There is a wider trend (e.g. China, India, US) to demonstrate advanced space capabilities with nefarious, if not directly offensive, intent. But, for the past few years, Russia in particular, has been provocative in testing its space weapon capabilities. 

For example, in April 2020, Russia launched and tested into low orbit the PL-19 Nudol direct-ascent anti-satellite (DA-ASAT) interceptor missile system from the Plesetsk Cosmodrome demonstrating its space assets with potential offensive capabilities, in particular, Russia’s capacity to destroy satellites in Low Earth Orbit.

In addition, the satellites, Kosmos-2535 and Kosmos-2536, launched in July 2019, are also suspected to be operating beyond their official mission of studying Russian orbital assets. It is reported that these satellites conducted a close proximity activity, coming within one kilometre from each other, which led to the creation of orbital debris.

Russia’s space strategy

By exploiting asymmetric advantages in space, Russia seeks to leverage its capabilities against competitors in space and in other domains, falling in line with its wider military strategy as well as its current Federal Space Programme for 2016 to 2025.

Russian space activities also have a cyber and electronic warfare angle. With the help of remote-sensing capabilities, Russian spy satellites potentially seek to disrupt military and civilian satellite communications and navigation systems. Indeed, in 2018, French authorities publicly accused Russia of seeking to intercept communication satellites for French and Italian armed forces putting data transmission through Western civilian and military satellites at risk of interception.

Furthermore, earlier this year, both Kosmos-2542 and 2543 came within 160 kilometres of a US spy satellite, US KH-11, similarly to Russia ‘buzzing’ around the British Isles or submarine surveillance that Norway and Sweden have been subjected to recently.

Shadowing and tailing in space is regarded as spying and this recent anti-satellite weapon test is part of a trend which demonstrates Russia’s persistent space strategy for close-proximity operations with foreign countries.

Orbital hypocrisy

Despite Russia’s calls for a treaty to prevent the placement of weapons in outer space, there remains little international trust in Russia’s behaviour in space so far with a US-Russia Space Security Exchange meeting scheduled to take place in Vienna on 27 July to discuss outer space stability and security.

This is amid a backdrop of bilateral nuclear arms control talks on the extension of the extant nuclear weapons reduction treaty, New START, which is scheduled to expire in February 2021. There is no guarantee, however, that the talks will achieve anything especially since the future of outer space requires a wider multilateral dialogue with all parties involved – including China.

Anti-satellite tests (ASATs) are a particularly dangerous form of weapon. Not only do they create major vulnerabilities in a domain where so much of humanity depends on for navigation, communications and environmental monitoring, they are also primarily a target for destabilization and undermining global positioning information in times of crisis.

And, perhaps most significantly, they possess the highly destructive potential to create even more space debris in Earth’s orbits that endanger the peaceful use of satellites and could do serious damage to large parts of the economies of developed and developing countries.

Avoiding space warfare

Space is for all but there is a risk that it is being hijacked by a few. It is time to re-assert and reinforce the rules, principles and norms of responsible state behaviour in outer space enshrined in the 1967 Outer Space Treaty and its associated international agreements.

And, because the treaty specifically prohibits stationing nuclear weapons and other weapons of mass destruction in orbit or on celestial bodies, it is necessary to build on it to ban other types of weapons in space.

Space has been militarized since 1957 with the launch of Soviet satellite Sputnik. But the increasing weaponization of space adds more uncertainty, and unveils more vulnerabilities, that states need to address before space warfare becomes a reality.




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COVID-19 Teaches Resilience and the ‘Vulnerability Paradox’

7 August 2020

Dr Gareth Price

Senior Research Fellow, Asia-Pacific Programme

Christopher Vandome

Research Fellow, Africa Programme
Humility from decision-makers, building trust in leaders and institutions, and learning from international experience are critical if countries are to better prepare for the next global crisis.

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An information poster on preventing the spread of COVID-19 in Hanoi, Vietnam. Photo by MANAN VATSYAYANA/AFP via Getty Images.

While we must wait for the final reckoning of most successful national coronavirus responses, it does still appear those countries with memories of MERS and SARS - such as Singapore, Taiwan, Hong-Kong, and South Korea – led the way in being best prepared for COVID-19, with strong contract tracing and isolation measures.

Experience of previous outbreaks informed the containment strategies adopted by countries in East Asia in response to COVID-19. Vietnam reported its first case of COVID-19 in January but, over the following four months with rapid targeted testing, contact tracing and successful containment, only around 300 additional cases with no deaths were confirmed.

These countries learned to be flexible fast when new transmissions occurred, establishing quick lockdown measures targeted at key groups such as Singapore’s schools or South Korea’s night clubs and religious centres. In stark contrast, most European countries were overwhelmed by the pandemic despite enjoying world-class health systems, predictive models, scientific expertise, wealth, and resources.

Asia may have suffered first from coronavirus, but there is no ‘first mover advantage’ in dealing with a pandemic. The more resilient a society, the better placed it is to cope with a variety of risks and challenges. But to become resilient, a society needs to have faced setbacks and learned from them. And to remain resilient, it needs to stay aware of its own vulnerabilities and avoid complacency.

Prior experience of crises and disturbances, coupled with a ‘trial and error’ process of learning to deal with them, makes a society more resilient, whereas high levels of economic welfare and relative lack of recent crises leave some societies less prepared to face shocks. This is known as the ‘vulnerability paradox’.

Within Europe, it has actually been the Greek handling of COVID-19 that so far appears more successful than others. Greece is a country which has suffered a decade of austerity leading to a weakened healthcare system. And with one of Europe’s oldest populations, the Greek government was keenly aware of its own vulnerabilities. This prompted an early lockdown and a rapid increase in intensive care beds.

Although better state capacity and health system capability are clearly positives for mitigating disasters, citizens do tend to be less familiar with risk preparedness. This lack of experience can then breed complacency which threatens societies where risks are often complex, numerous, transboundary and inter-related.

Conversely, the absence of systemic resilience at a national level often puts the onus on family units or local communities – creating resilience as a necessary response to weak government capacity. There is little choice but to learn to look after yourself and your community.

However, although the vulnerability paradox helps explain why prior experience makes a system more resilient, societies need to stay aware of their own vulnerabilities and avoid complacency if they are to continually remain resilient.

Complacency coupled with a belief in the virtues of the free market has left some countries hit harder than others by the pandemic. In normal times, ‘just in time’ business models can be highly efficient compared to holding vast stocks. But it does not require hindsight to know that a global health crisis will see demand for protective equipment soar and these business models severely challenged.

Several societies have also witnessed a decline in trust towards institutions, especially politicians or the media. The deployment of science as justification for political decisions around coronavirus was presumably intended to help garner trust in those decisions. But when the science itself is inexact because of inadequate or emerging knowledge, this strategy is hardly fail-safe.

COVID-19 does provide an opportunity to rebuild trust by rethinking the relationship between the state and its citizens, to engage people more directly in a discussion about societal resilience with empowered citizens, and to rebuild a social contract between state and society in the context of recent significant changes and further potential threats.

It should also provide a salutary wake-up call to a range of ‘strongmen’ leaders prone to portraying issues rather simplistically. Although COVID-19 may be one of the few complex problems to which simplistic measures do apply - such as wearing a mask and using social distancing – these do not provide the whole solution.

Generally, declining trust in politicians reflects the ongoing inability of current politics to deal with a range of societal challenges. COVID-19 is certainly the most sudden and presents the biggest immediate economic shock of recent times, but it is just the latest in a long line of examples of political failure, such as conflict in the Middle East, climate change, terrorism, and cyber-attacks.

Along with the growth of automation and digitization which provide opportunities at the macro-level but threats at a more micro-level, what most of these issues have in common is that national responses are likely to fail. Restoring trust requires re-energized global governance, and this means compromise and humility – qualities which appear in short supply to many current politicians.

But, regardless of political will, building resilience to tackle ongoing or rapidly forthcoming challenges also rubs up against free market beliefs, because building resilience is a long-term investment and comes at a price. But by acknowledging vulnerabilities, avoiding complacency, implementing lessons from past experiences, and learning from others, policymakers will be better prepared for the next crisis.

Reconstructing societies through the prism of resilience creates fundamentally different outcomes to global challenges, and can build trust between elected representatives and the wider population. Accepting the vulnerability paradox and acknowledging that those generally less prone to disasters are actually less able to cope when change happens creates a powerful argument for this new approach.




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Why the Corrupt President of Belarus Deserves Sanctions

10 August 2020

Ryhor Astapenia

Robert Bosch Stiftung Academy Fellow, Russia and Eurasia Programme
Sanctions would be a wake-up call for those who oversaw this brutal and dirty election campaign.

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People protest at a rally of solidarity with political prisoners in Belarus. Photo by Beata Zawrzel/NurPhoto via Getty Images.

Belarusian president Aliaksandr Lukashenka deserves sanctions. This election campaign in Belarus, which culminated in a vote on Sunday is the most brutal and dirty in its history. But, so far, the EU, the UK and the US have only issued familiar-sounding and futile appeals to the Belarusian authorities condemning their actions. Not imposing sanctions is a de facto licence to continue with repression.

Despite all this, the West is unlikely to impose significant sanctions afterwards. There are several questionable reasons for this. First, Western policymakers fear sanctions against Lukashenko will make him more likely to genuflect to Russia. However, relations with Russia have already deteriorated as Belarus accuses Russia of trying to interfere with its domestic affairs.

Sanctions serve as a wake-up call. The Belarusian authorities then might seek - once again - to repair relations with the West and reduce repression for greater assistance in any direct confrontation with Russia.

Second, the West is reluctant to implement sanctions because it has already invested somewhat in warming relations with Belarusian authorities. Punishing Lukashenko could mean burying the - admittedly modest - achievements of a Belarus-West dialogue that started in 2014 after the conflict in Ukraine began.

Even US secretary of state Mike Pompeo met with Lukashenko in Minsk this year, after which Belarus replaced a small but symbolic amount of Russian oil for American. All the same, the West has its conscience to answer to if dialogue is won but repressions continue.

The third reason why the West may not resort to targeted economic sanctions and visa restrictions is a latent concern whether such measures have any effect on democratization processes at all. They may be appropriate punishment, but there is little evidence they ever change the nature of a regime.

According to this logic, if the West imposes sanctions, the Belarusian authorities will continue to crack down with repression because they will have nothing to lose. That said, in previous years, the Belarusian authorities have released political prisoners in response to sticks and carrots brandished by the West. If Belarusian political prisoners did not have a price tag, the authorities would most likely keep everyone in jail.

To be fair, there are reasonable arguments in favour of and against sanctions. But if the West fails to impose them - be it through lack of political will or out of genuine concern about their effectiveness - at least it should focus on helping ordinary Belarusians withstand Lukashenko’s repressions. After the vote, arrested and jailed Belarusian citizens might lack money for lawyers and arbitrarily imposed fines.

If repression spreads further, independent media and human rights organizations will need funds to keep their structures running in the heat of the crackdown. Many entrepreneurs might lose their companies for openly supporting free elections. Thus, if the West will not sanction Lukashenko, it should at least show solidarity with these Belarusians in peril.

This article was originally published in The Telegraph.




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International Donors Can End Lebanon's Corruption

10 August 2020

Dr Lina Khatib

Director, Middle East and North Africa Programme
Change must come from within Lebanon, but Emmanuel Macron and others can help by ending their patronage of a disastrous regime.

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An anti-government protester in Beirut puts up a poster accusing corruption in Lebanon's state judiciary. Photo by Sam Tarling/Getty Images.

In the aftermath of the devastating Beirut port explosion last week, it is not just the role of the Lebanese political class that has come under scrutiny, but that of their international peers too.

Sunday’s international donor conference led by the French president, Emmanuel Macron, raised €253m (£228m) in relief funds, but it also signalled an important change in rhetoric. For the first time, donors affirmed that relief funds would directly go to the Lebanese people, and that longer-term economic assistance would be dependent on Lebanon implementing structural reforms.

This affirmation came hot on the heels of growing international attention on rampant corruption among Lebanon’s ruling political class, which is widely blamed for the port explosion. It sends the message to Lebanon’s rulers that, while their country desperately needs foreign assistance to stand on its feet, no one can help Lebanon if it does not also help itself.

But the communique issued following the conference glossed over the international community’s own role in sustaining Lebanon’s corrupt political class over a period of decades. At the aid conference, Macron said that Lebanon’s future is at stake. What donors need to recognise is that this future is a shared responsibility for them and Lebanon’s leaders alike.

With Lebanon’s debt greater than 170% of its GDP, and with the port explosion costing an estimated $15bn of damage, Lebanon needs foreign assistance to prevent it becoming a failed state. But what it needs even more desperately are reforms that would counter the corruption and lack of accountability that led it to this sorry state of affairs in the first place.

It is Lebanon’s existing political system – a power-sharing pact between different sects rather than a system of governance on the basis of competence – that facilitates its leaders’ reckless behaviour.

The international community is partly responsible for sustaining this system through cascading patronage. For decades, Lebanese leaders grew accustomed to neglecting the national interest and eventually being bailed out by international assistance. Dollar deposits would land in the central bank from Gulf donors, loans would be offered by European countries and foreign aid packages would flow to Lebanese state institutions – only for the majority of this money to end up lining the pockets of the country’s rulers, who frequently overcame their political differences to share state resources between them. The Lebanese state came to exist as a shell in the eyes of its citizens.

Lebanon’s rulers benefited from citizens’ low expectations from the state and the lack of measures ensuring transparency and accountability in the country. They brokered a social contract that cast the leaders as patrons and the people as clients rather than citizens. Foreign powers were well aware of this dynamic but they often turned a blind eye to it, and even nurtured it, because they believed the Lebanese political system brought stability and predictability following the tumultuous civil war.

With time the leaders’ greed grew, and with that the economic situation worsened. Leaders who behaved as de facto local authorities, granting constituents civil service jobs or minor privileges, provided them less and less. There was some international recognition that this dynamic was becoming unsustainable – international donors pledged $11bn during the CEDRE conference of 2018 on condition that Lebanon implemented structural reforms.

And in the wake of Lebanon’s recent economic deterioration, the International Monetary Fund said in April that any discussion of a loan to Lebanon would be subject to more reforms. On both occasions, Lebanon’s rulers ignored the calls for reform, counting on foreign support eventually coming in unconditionally as it used to in the past. International donor follow-up was sluggish.

The port explosion needs to be a wake-up call for any international entity seeking a stable Lebanon. The blast is ultimately the result of the decades during which political classes in Lebanon and outside it fostered the country’s dysfunctional political system. No long-term assistance should flow into Lebanon without strong conditions on transparency and accountability in how this assistance would be employed.

Foreign support is not the problem per se, but rather when it is handed on a plate unconditionally, maintaining the patronage cascade, exacerbating the weakness of state institutions, and further impoverishing Lebanese citizens.

With Lebanon’s economy almost crumbling in the aftermath of the explosion, there is an opportunity for the international community to exert leverage over Lebanese leaders – whose personal wealth grew partially from legal and illegal transactions through the devastated port – so that necessary reforms are implemented. Such leverage would not remove Lebanon’s defective political system, but would pressure its leaders to accept at least some basic reforms.

But for Lebanon to really turn a new page, it needs a new social contract and a new political system based on fairness, transparency and accountability. This is a change that can only start from within Lebanon, but it also depends on the international community abandoning their tacit support of a disastrous political status quo.

This article was originally published in The Guardian.




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Nile Basin States Must Persist with Water Diplomacy

11 August 2020

Owen Grafham

Assistant Director, Energy, Environment and Resources Programme

Ahmed Soliman

Research Fellow, Horn of Africa, Africa Programme

Dr Nouar Shamout

Water Resources and Sustainability (Independent Researcher)
After multiple failed negotiations, any serious breakdown in current talks mediated by the African Union would be dangerous for regional stability. The international community must ramp up its support for this crucial diplomacy to ensure that an agreement is reached.

2020-08-12-Dam-Nile-Ethiopia

The Blue Nile river passes through the Grand Ethiopian Renaissance Dam (GERD) near Guba in Ethiopia. Photo by EDUARDO SOTERAS/AFP via Getty Images.

Ongoing talks between Egypt, Ethiopia and Sudan attempting to find a diplomatic and peaceful solution to the dispute over the Blue Nile Basin offer a unique opportunity for trans-boundary cooperation and have huge significance for a region dealing with multiple complex issues.

With trust clearly at a premium, the continuation of talks demonstrates good faith, but there is an urgent need to strengthen negotiations through all available diplomatic channels. The African Union (AU) is well-placed to continue mediating, but sustained high-level engagement is also needed from regional and international partners such as the EU and US, as well as multilateral support in terms of both financial and technical resources.

A tense history to overcome

At the heart of this dispute is the new Grand Ethiopian Renaissance Dam (GERD) – set to become Africa's biggest hydroelectric dam when complete. Egypt and Sudan, who lie downstream, fear that Ethiopia, as the dam builders, will effectively gain control of the flow of the Nile, a turn of events that radically changes the way that water resources have been shared in the region.

Egypt - widely described as a ‘gift of the Nile’ - is almost entirely dependent on the Nile to meet its various water needs, and is the major beneficiary of the 1929 and 1959 agreements on using the shared river’s water. The 1959 agreement gives Egypt a share of 55.5 billion cubic meters (BCM) annually out of 74 billion available, and a veto right over projects being developed upstream, while Sudan is allocated 18.5 BCM.

Crucially neither of these old agreements recognises the interests of other upstream countries on the Nile, some of which have asserted their own development ambitions on the river over the last two decades and pushed for a new agreement to enshrine equitable rights and harmonious use of the water.

One such country is Ethiopia where the Blue Nile River originates. The GERD is a central part of Ethiopia’s ambitions for economic prosperity. The dam, which is largely self-financed, will have a capacity of 74 BCM when completed, enough to provide abundant cheap energy to power both national and regional developments. Currently, more than half Ethiopia’s 110 million people do not have access to electricity, but demand is increasing by 30 per cent annually.

Unclear impacts

The unclear impact of the GERD – and lower volumes of water – on food security and agriculture complicate the negotiations. Egypt, Ethiopia and Sudan’s populations are set to increase significantly in the coming decades and each are already dealing with significant challenges around food insecurity and nutrition, which in Egypt and Sudan, are partly exacerbated by the colonial-era agricultural structures set up to exploit cash crops.

Any change in water quality would have a huge impact on the 67% of Egyptian farm holdings considered as ‘small’ – the majority of which are on the banks of the Nile. And changes in water volumes might increase desertification and loss of livelihoods, potentially causing civil unrest if not addressed properly.

The environmental impact of the GERD on the complex Nile River system also raises concerns about the river’s ecosystem, the surrounding environment, and the river’s downstream course. Despite talks in 2015 leading to an agreement on declaration of principles, thorough technical studies have not been implemented.

Although there is little evidence that overall water levels in the Nile Basin have reduced in recent years, climate change is causing more variation in the Nile’s flow which increases the risk of flooding and extended droughts. Downstream states are also concerned about impacts from any breaches, damage or failure of the dam, including possible seismic activity.

Of course, the GERD also offers some added value to the downstream states. The dam can help manage floods in Sudan, reduce the significant water loss to evaporation - as in the case of Lake Nasser - and lessen the effect of sediment on downstream dams. In Sudan, where less than one-quarter of the estimated 70 million hectares of arable land is currently cultivated, any reduction in seasonal flooding would boost agricultural output and aid economic recovery. The dam will offer Ethiopia significant opportunities for the trade of cheap renewable energy to Sudan and neighbouring states earning it a possible $1bn a year in revenues. And adopting a more ‘basin-integrated’ management approach can be a springboard for enhanced regional cooperation between the three states.

But geopolitical tensions between the three have escalated since satellite imagery revealed apparent significant filling of the dam prior to reaching any agreement. Ethiopia has long said it would begin filling the dam during its rainy season, but insists the filling occurred naturally through June-July from rainfall and runoff and its first-year target of 4.9 BCM was reached without needing to close the dam gates. Egypt and Sudan have restated their calls for a binding legal agreement on the rules for filling and management of disputes.

Security response not the answer

Internal pressures are particularly acute, with all three countries experiencing public uprisings and regime change in the last decade, and current leaders are under pressure not to appear weak from influential sections of society pushing a hard nationalist line.

Hawkish elements in Egypt have long supported a more securitized response to any potential threats from the GERD, and the recent request from President Sisi that Egyptian air forces be ready to handle targets inside and outside of the country was interpreted as a threat to Turkey in Libya, and Ethiopia.

Egypt has also asked for the GERD to be discussed at the UN Security Council but Ethiopia’s Nobel peace prize-winning prime minister Abiy Ahmed, facing significant internal unrest himself, has made it clear that a costly confrontation is not in anyone’s interests. Meanwhile, Sudan’s transitional government - being jointly run by civilians and the military - is keen to assert its own interests on the Nile but has also played a conciliatory role with its neighbours. Increased engagement of Gulf states in the Horn of Africa and the impacts of conflicts in Libya, Yemen and Syria add more complexity to the overall regional picture.

Certainly none of the major parties sharing the river would benefit from a hard security response to the dam. For Egypt, such a move would torpedo its re-engagement in Sub-Saharan Africa under President Sisi and likely lead to its expulsion from the AU. For Ethiopia, overt conflict would be a huge setback for its development and regional integration ambitions. And Sudan’s nascent transition can ill-afford to be part of another regional conflict.

Thankfully, such an outcome is both highly unlikely and historically rare, and behind the scenes there has been significant progress. Some reports suggest a provisional agreement has been reached on the volume of filling required and the timeframe for the filling to happen. If so, most dispute now revolves around what to do in the event of a drought, provisions for information exchange, and how to translate all this into a binding agreement.

A two-phase approach, consisting of a short-term deal on filling and operating the GERD followed by discussions on future developments and allocation, could be the best way to reach a lasting settlement and replace the extremely outdated existing water-sharing agreements.

Reaching a successful deal between the three countries is not easy as it requires brave leadership and political goodwill, a de-escalation of long-standing rhetoric and brinkmanship, and a willingness to compromise on all sides to ensure the gaps between the countries' positions are significantly narrowed.

What is required is a determined effort to keep the countries talking and provide the solutions which can bridge the parties’ differences, build confidence, and secure the vital diplomatic success so badly needed for wider stability and progress in the region.