Premier Li Keqiang's government work report was a pragmatic and concrete one, pointing out challenges as well as strengths and opportunities, according to a US-based China scholar.

The report, delivered by Premier Li at the opening of the fourth session of the 12th National People's Congress (NPC) on Saturday, is now being deliberated by some 3,000 deputies.

Cheng Li, director of the John L. Thornton China Center of the Brookings Institution, said the report tells people that the Chinese economy is facing difficulties as a result of structural reforms, the need for better environmental protection and the impact of a sluggish global economy.

"It tells the public that such economic challenges will last for a period of time, so the report does not give the public an unachievable expectation," Cheng Li said.

Meanwhile, the report has also elaborated on China's strength, such as the potential to be unleashed in urbanization, the development of the service sector, the employment policy and the innovation policy, according to Cheng Li.

"So this is a report that neither gives the public too high an expectation nor disappointment," said Cheng Li, whose research has focused on the transformation of Chinese leaders and technological development in China.

Cheng Li believes that this is especially important during the coming two years, or the beginning years of the 13th Five-Year Plan (2016-2020), when there won't be excessive high economic growth rate, something he said China also does not need.

In the work report, China's gross domestic product (GDP) growth in 2016 has been set between 6.5 percent and 7 percent. It is the first time since 1995 for the target to be in a range rather than one single number.

China's economy grew by 6.9 percent in 2015, the lowest in a quarter of a century, but it was still among the highest in the world.

According to the report, an average annual growth of at least 6.5 percent should be maintained in the coming five years in order to achieve the goals of doubling GDP and household income by 2020 from the 2010 levels.

It also says that by 2020, the contribution from scientific and technological advances should account for 60 percent of GDP growth.

Cheng Li said structural reforms will bring a lot of challenges, all of which would require dealing with by the Chinese government.

He described the goals in the work report as very specific. "There isn't much empty content and slogan type of things," he said.

"It is what the Chinese public wants to see... and it's a relatively balanced and good report, one quite pertinent to China's situation today," Cheng Li said.

He hoped that the report had emphasized more that many of the challenges are also opportunities. "It is just the beginning and the potential is huge," he said, citing how areas such as environmental protection could help job creation and business opportunities.

To Cheng Li, the potential opportunities will help small- and medium-sized companies, large companies, Chinese companies overseas and foreign-funded companies in China break new ground.

Cheng Li said the growth targets set in the 13th Five-Year Plan are quite reasonable. "More than 90 percent of what's in the 12th Five-Year Plan (2011-2015) had been achieved, and there is a better reason to achieve what's in the 13th Five-Year Plan," he said.

This piece was originally published by China Daily.

China’s approach to Europe is a contrasting mix of economic opportunism and strategic vision.

A continent gripped by economic weakness and debt is crying out for Chinese investment, and Chinese state enterprises and funds are eagerly participating in the sale of the century, buying up ports, prime real estate and technology firms from Greece to the U.K.

At the same time, Beijing views Europe as the terminus for its massively ambitious “One Belt, One Road” project – a string of ports, logistics hubs and other trading infrastructure stretching all the way from Southeast Asia to the north of England.

Yet a populist backlash against China is building in Europe: recent street demonstrations by European workers over Chinese steel dumping have highlighted the risks of a relationship that increasingly looks troubled.

In their book “China’s Offensive in Europe,” Philippe Le Corre, a visiting fellow at the Brookings Institution, and Alain Sepulchre, a senior adviser with BCG in Hong Kong, analyze China’s rapidly expanding footprint on the continent — and what it means in global terms. They set out some of their thinking in a written Q&A with China Real Time:

You title your book “China’s Offensive in Europe.” This sounds somewhat alarming. Should we be worried?

It may have sounded slightly alarming a few years ago, but China’s economic intentions toward Europe are not just about creating jobs and value: they are about spreading influence on a weakened and somewhat divided continent (the U.K. being perhaps the most obvious example) that is also far away from the U.S., the country seen by China as the ultimate competitor. Europe is part of “the West” where China is willing to leave more than footprints.

Overall, how do you assess the relationship between the EU and China? What are the opportunities and the risks?

On one hand, China has offered to take part in major EU projects such as the European Strategic Investment Fund, launched by the European Commission to relaunch European infrastructure. It will probably become the biggest non-European stakeholder in the ESIF. But on the other hand, there is an attempt by China to divide the EU at various levels. A typical example is the “16+1” group created by China and sixteen Eastern and Central European countries in 2011. Once a year, leaders of these countries meet with Chinese Premier Li Keqiang. Last year in Suzhou, they also met with President Xi Jinjping. Seven countries signed memorandums of understanding with China on “one-belt, one-road.” Three of them hosted Mr. Xi recently, and were offered substantial Chinese investment promises. China has also tried to establish similar platforms with Southern Europe and Nordic countries, so far without success, but there is a risk that a large number of smaller countries (some of them non-EU members, a good example being Serbia which is getting a Chinese-made high-speed railway) will take a separate approach from the rest of Europe when dealing with China. This is not what Europe needs now.

How coordinated is Chinese investment in Europe? Is there a master plan in Beijing?

There is no “master plan” to take over Europe. First, Europe was part of the “China goes out” [investment] policy in the late 1990s. It then started accelerating with opportunities in 2008-2009 during the euro-debt crisis (and thanks to a favorable exchange rate), when China bought eurobonds and started buying into European infrastructure such as Athens’ Piraeus Harbor (which it now controls). Now, Chinese investment is taking a different dimension through the cultivation of individual European countries via the “one belt, one road” initiative as was demonstrated by Mr. Xi’s visits to the Czech Republic in May, and to Poland and Serbia more recently. Although many aspects of OBOR remain unclear, Europe is definitely a final destination for this project.

Would “Brexit” make the U.K. a less attractive destination for Chinese capital?

As a financial center, London would remain attractive to Chinese investors who would still use it as an renminbi trading hub – but they would also use Frankfurt, Paris and Luxembourg, where they have started trading, too. As for the British market, it would be treated as a medium-sized economy with some prospects but a much less important group than the 450-million consumer common market. For all its flaws, the EU is a powerful trade block with clear interlocutors on issues of importance to China, such as the Market Economy Status. Finally, it is not clear if the U.K. would remain a top destination for Chinese investments. Real estate is one thing, but projects such as the “Northern Power House,” a massive development plan in the north of England, have little chance to receive Chinese financial support if the U.K. votes to exit the EU on Thursday.

Chinese companies are on a buying spree in Europe. This is good news for job creation, yet it also creates anxiety, particularly in Germany, about the loss of key technologies. How do you see this playing out?

Overall, the mood within European elites is about welcoming Chinese investments providing they play the European way. So far Chinese investors have been targeting primarily nonsensitive sectors or companies in financial trouble. The case of [German robot maker Kuka being acquired by Chinese home appliance giant Midea] is quite unique as it involves some specific high-tech content in a sector which is of huge potential. The fact that the Chinese acquirer is perceived as low-tech and very aggressive in its domestic and international expansion strengthens the anti-China Inc. feeling.

Is there a danger of a real populist backlash in Europe against perceived unfair Chinese trading practices, including steel dumping?

It is already happening with the recent (nonbinding, but overwhelming) vote on May 12 by the European Parliament against granting market economy status to China by the end of 2016. Members of the European Parliament are directly elected by the European people, and they reflect the continent’s worries over unfair trade practices from China. These are sensitive times in Europe, and China’s message is obviously not popular with European grassroots where people worry about jobs and the future of the continent’s economy.

What is behind the debate on giving China market economy status?

It is a complicated issue for Europeans as the EU itself is based on the rule of law. In this case, the law is the 2001 World Trade Organization agreement that says that China should receive MES by December 2016. Economics and politics are two other factors European leaders cannot avoid: both France and Germany are facing general elections in 2017 and populism is on the rise everywhere. It would be suicidal to grant the status to China now, as almost none of the criteria to be a market economy have been met – except perhaps the upcoming deadline. A compromise will be needed with mitigating measures at the very least, and in the current political context, it will obviously take time.

Europe complains that while its markets are wide open to Chinese investment, China is closing up. German Chancellor Angela Merkel has called for greater reciprocity. How can China be persuaded to level the playing field?

European cumulative overseas direct investment into China is far bigger than what China has been investing so far into Europe. China is still considered an emerging market, typically showing some kind of protectionism. At the same time, China is often not sympathetic to reciprocity be it in politics or business. Two ways could be considered to pressure China. One way – as we have just heard from Chancellor Merkel – is to be offensive by blocking some Chinese investments in deemed sensitive areas (similarly to what is taking place in the US through the CFIUS mechanism) and by finding alternative suitors to firms like Kuka that China wants to acquire. Another way would be to use the pan-European card. In many cases, European businesses and / or political bodies have been battling each other for Chinese investments. This has been going on for years, and it is time for Europeans to partner vis-a-vis China.

On her recent visits to China, Ms. Merkel has spoken out strongly on issues from human rights to the South China Sea. This compares quite markedly with the approach to China adopted by Britain, which tends to avoid sensitive issues. What accounts for Ms. Merkel’s frankness?

There is still a Chinese fascination for Germany’s economic and technological model, which has no equivalent in Europe. Although the German trade surplus with China is shrinking, many German industrial brands are recognized and vastly respected in China (Audi, Siemens, BMW, BASF…). German technology and brands give Germany an incentive. In addition, Ms. Merkel, who has been in power for almost 11 years, is seen by Beijing as Europe’s clear leader. David Cameron is only considered as his country’s prime minister, with little influence on decisions taken within the EU. The fact Ms. Merkel has spoken frankly and repeatedly about sensitive issues has not weakened her – it is the opposite. A good lesson for others, perhaps?

What is the experience so far of European companies bought by Chinese firms?

The experience so far has been a mixed bag. On the workforce front, most companies have been expanding rather than the opposite, but some have been downsizing their labor force at least initially. A typical challenge lies more at the top management / governance level: Chinese owners tend to over-manage or under-manage dispatching too many or too few skilled managers, governing too tightly or too loosely. The right balance has not been found yet. The most ‘non value-added’ factor is probably on the transfer of technology side. In many instances, Chinese investors have not been able to fully leverage the European technology content into their domestic operations. 

This interview originally appeared in the Wall Street Journal. 

The announcement of King Abdullah’s death puts Saudi Arabia in the hands of his designated successor, Prince Salman. Salman has his own health issues and faces an immediate crisis on the kingdom’s southern border in Yemen. Continuity will be Salman’s hallmark, including close ties to Washington.

Now King Salman, born Dec. 31, 1935, who is also defense minister, has been chairing cabinet meetings for several months and handling almost all foreign travel responsibilities for the monarchy since he became the heir in 2012. He has visited China, Japan, India, Pakistan, the Maldives, and France since becoming crown prince after the death of his predecessor, Prince Nayif. He has hosted a series of Saudi allies like Pakistani Prime Minister Nawaz Sharif and Egypt’s president, Abdel Fattah Al-Sisi, who paid their last respects quietly to Abdullah in the last week.

Before becoming crown prince, Salman was governor of Riyadh province for 48 years. When he became governor in 1963, Riyadh had 200,000 inhabitants; today, it has more than seven million. Salman presided over this remarkable transformation with a record for good governance and a lack of corruption. Since most of the royal princes and princesses live in Riyadh, he was also the family sheriff, ensuring any transgressions were dealt with smoothly and quietly with no publicity. He knows where all the bodies are hidden.

Salman also oversaw the collection of private funds to support the Afghan mujahideen in the 1980s, working very closely with the kingdom’s Wahhabi clerical establishment. In the early years of the war, before the U.S. and the kingdom ramped up their secret financial support for the anti-Soviet insurgency, this private Saudi funding was critical to the war effort. At the war’s peak, Salman was providing $25 million a month to the mujahideen. He was also active in raising money for the Bosnian Muslims in the war with Serbia.

Salman’s sons include the first Muslim astronaut, Prince Sultan, and the governor of Medinah, Prince Faysal. Another son, Prince Khaled, is a fighter pilot in the Royal Saudi Air Force and led the first RSAF mission against Islamic State targets in Syria last year. The family controls much of the Saudi media. All will now be up-and-comers.

Salman has his own health issues and has had a stroke. (Persistent rumors of dementia are denied by the palace.) His successor was announced in February 2013 to ensure continuity. Second Deputy Prime Minister Prince Muqrin was born Sept. 15, 1945 and was educated at the Royal Air Force College in England before becoming a pilot in the Royal Saudi Air Force. Later, he was governor of Medinah province and then head of Saudi intelligence. Muqrin is now crown prince.

Abdullah, Salman, and Muqrin are sons of the modern kingdom’s founder, Abdelaziz Ibn Saud, who had 44 recognized sons. The survivors and their heirs constitute the Allegiance Council, which Abdullah created in 2007 to help choose the line of succession. In practice it has only ratified the king’s decisions after the fact.

Muqrin is widely believed to be the last capable son of Ibn Saud. So now that Muqrin has ascended to the crown prince position the kingdom will face the unprecedented challenge of picking a next in line from the grandsons of Ibn Saud. That will raise questions of legitimacy not faced in the last century of Saudi rule.

Abdullah has been the de facto ruler of the kingdom since King Fahd suffered a debilitating stroke in 1995; he became king a decade later when Fahd passed away. A progressive reformer by Saudi standards, Abdullah gave the kingdom 20 years of stability. Salman is likely to provide continuity. The House of Saud values family collegiality and harmony highly. The two previous Saudi kingdoms in the 18th and 19th centuries were wracked by family internal squabbles which their foreign enemies exploited. Eleven of 14 successions were contested and the Saudis ended up in exile in Kuwait until Ibn Saud created the modern kingdom in 1902.

With the Arab world facing its worst crisis in decades, the royals will want to present an image of stability and strength. This is especially true with the collapse of the pro-Saudi government in Yemen, which will be Salman’s first crisis.

The Zaydi Houthi rebels who have all but disposed the pro-American government in Yemen this week have a slogan which reads, “Death to America, death to Israel, curses to the Jews and victory to Islam.” The collapse of President Abd Rabdu Mansour Hadi’s government, which openly supported American drone strikes in Yemen against Al Qaeda in the Arabian Pennisula for the last couple of years, puts a pro-Iranian anti-American Shia militia as the dominant player in a strategically important country. The Bab El Mandab, the straits between Asia and Africa, are one of the choke points of global energy and geopolitics. The leader of the Houthis gave a triumphal speech Tuesday and Iranian diplomats hailed his victory. The Houthis have fought a half-dozen border wars with the Saudis, who spent billions trying to keep them out of power.

The Houthis’ victory also ironically benefits AQAP by polarizing Yemen, the poorest country in the Arab world, between Shia and Sunni with AQAP emerging as the protector of Sunni rights. AQAP is fresh off its attack on Paris and has grown since 2009 into the most dangerous al Qaeda affiliate in the world. It is dedicated to overthrowing the House of Saud. Salman will have his hands full immediately.

This piece was originally published by The Daily Beast. 

As much as the nostalgic might hate to admit it, a new year is coming up. And for climate change negotiators, 2015 is a big one: it’s the make-it-or-break it year for a serious, last-ditch effort at an international agreement to slow runaway climate change. 

A new year brings new, hopeful resolutions. Of course, just as ubiquitous are the pesky memories of past resolutions that one never quite accomplished.

Some resolutions fade, understandably. But failure is less forgivable when the repercussions include the increased exploration of fossil fuels at the expense of our warming world. To avoid the most destructive effects of climate change, we must keep two-thirds of existing fossil fuel reserves underground, instead of providing subsidies to dig them up.

One group not living up to its resolution: the G20 members —19 countries and the European Union that make up 85% of global GDP. At the 2009 G20 summit in Pittsburgh, the group agreed to “rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption.” At the 2013 summit in St. Petersburg, they reaffirmed this resolution. Yet that same year, these countries funneled $88 billion into exploring new reserves of oil, gas, and coal.

Another resolution abandoned.

This year’s G20 summit will convene in Brisbane, Australia (November 15^th - 16^th) — a perfect opportunity to commiserate about the backsliding on the agreement and to develop a new approach that includes some means of holding each other accountable. So how can the G20 follow through on its laudable and necessary pledge?

1. Get help from the experts.

A new report by the Overseas Development Institute and Oil Change International criticizes the G20 for “marry[ing] bad economics with potentially disastrous consequences for climate change.” It points out that every dollar used to subsidize renewables generates twice as much investment as the dollar that subsidizes fossil fuels.

And the G20 can try harder to heed the doctor’s orders. This report outlines specific recommendations, including revamping tax codes to support low carbon development instead.

2. Set a timeline and stick to it.

National timelines for fossil fuel subsidy phase out would be different depending on the governmental structures and budgeting processes of individual countries. Also, countries can utilize the timeline of the incoming international climate treaty, by including a subsidy phase out as part of a mitigation plan to be measured and reported.

3. It’s easier with friends.

The G20 got it right that no one country should have to go it alone. Now it is time to strengthen its methodology for peer review of inefficient fossil fuel subsidies, and agree upon a transparent and consistent system for tracking and reporting.

That said, it can also be easier to cheat with friends. The new report tracks where investments from G20 state-owned energy companies are directed. As it turns out, G20 countries continue to fund each other’s fossil fuel exploration. Instead of cheating together on their own resolution, G20 members should leverage these relationships to advance investments in clean energy.  

4. Hold each other accountable.

The G20 is not the only group that has committed to phase out fossil fuel subsidies. The issue has received support from advocacy groups, religious leaders, and business constituencies alike. The public will be able to better hold leaders accountable if the G20 declares its commitment and progress loud and proud.

Moreover, G20 members and advocacy organizations can make the facts very clear: fossil fuel subsidies do not support the world’s poor, and the public ends up paying for the externalities they cause in pollution and public health. This accountability to addressing concerns of the people can help the G20 stand up to the fossil fuel industry.

5. If at first you don’t succeed…

True, phasing out fossil fuel subsidies is no piece of cake. There is no G20 standard definition of “inefficient subsidies” or timeline for the phase out. It also hasn’t helped that countries report their own data. They can even opt out of this unenforced commitment altogether. Yet the pledge is there, as is the urgency of the issue. New Year’s resolutions take more than just commitments — they take work. This week’s G20 Leaders Summit is a wonderful place to commit to phasing out fossil fuel subsidies. Again.

“Although we are seeing a strengthening recovery in the United States, the overall performance of the global economy continues to fall short of aspirations,” said Treasury Undersecretary for International Affairs Nathan Sheets to a Brookings audience yesterday. In the event, hosted by the Global Economy and Development program and the Economic Studies program at Brookings, Undersecretary Sheets described six “pillars” that form his offices “core policy agenda for the years ahead” to support “a growing and vibrant U.S. economy.”

1. Strengthening and rebalancing global growth. Undersecretary Sheets noted the “persistent and deeper asymmetry in the international economic landscape,” and called for policymakers to “work together toward mutually beneficial growth strategies” such as boosting demand.
2. Deepening engagement with emerging-market giants, such as China, India, Mexico, and Brazil. On India, for example, the undersecretary noted that “faster growth, deeper financial markets, and greater openness to trade and foreign investment promise to raise incomes, reduce poverty, and bring many more Indians into the global middle class.”
3. Framing a resilient global financial system. “To be sustained,” he said, “growth must be built on a resilient financial foundation.” (See also Federal Reserve Governor Lael Brainard’s remarks yesterday on the Fed’s role in financial stability.)
4. Enhancing access to capital in developing countries. “Expanding access to financial services for the over 2 billion unbanked people in the world promises to open new possibilities as the financial wherewithal in these populations grows,” he said.
5. Promoting open trade and investment. Undersecretary Sheets explained that “Increased U.S. access to foreign markets, and the consequent rise in exports of our goods and services, is an important source of job creation in the United States.” He described current trade priorities, including the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), the Information Technology Agreement (ITA) concerning China, and the Trade Facilitation Agreement (TFA) concerning India.
6. Enhancing U.S. leadership in the IMF. Undersecretary Sheets said that Treasury and the Obama administration “are firmly committed to securing approval for the 2010 IMF quota and governance reforms.” Citing the widespread support already in place for these policies, Sheets argued that “without these reforms, emerging economies may well look outside the IMF and the international economic system we helped design, potentially undermining the Fund’s ability to serve as a first responder for financial crises around the world, and also our national security and economic well-being.” He also called on the Senate to confirm six administration nominees as executive directors or alternate executive directors at the IMF and multilateral development banks.

Watch the video here:

Get a transcript of Undersecretary Sheets’ prepared remarks here.

Brookings expert Donald Kohn, the Robert S. Kerr Senior Fellow, moderated the discussion. The speaker was introduced by Senior Fellow Amar Bhattacharya.

Editor’s Note: In the report “Think Tank 20: Growth, Convergence and Income Distribution: The Road from the Brisbane G-20 Summit” experts from Brookings and around the world address interrelated debates about growth, convergence and income distribution, three key elements that are likely to shape policy debates beyond the ninth G-20 summit that was held on November 15-16 in Brisbane, Australia. The content of this blog is based on the chapter on Latin America. Read the full brief on Latin America's growth trends here.

A figure says a thousand words. And, looking at Figure 1, which shows the population-weighted average income per capita in emerging economies relative to the U.S., there could be no doubt in anybody’s mind that since the late 1990s something rather extraordinary happened—a phenomenon with no antecedents in the post-WWII period—that propelled emerging economies into an exponential process of convergence.

Needless to say, this phenomenon had enormous consequences for the welfare of millions of citizens in emerging economies. It lifted more than 500 million people out from poverty and extreme poverty, and gave rise to the so-called emerging middle class that grew at a rate of 150 million per year.

So, it seems that something rather extraordinary happened in emerging economies. Or did it? Let’s look again. When China and India are removed from the emerging markets sample, Figure 1 becomes Figure 2a.

In Figure 2a, one can still discern a period of convergence starting in the late 1990s. But convergence here was not nearly as strong—relative income is still far below its previous heights—and it occurred after a period of divergence that started in the mid-1970s after the first oil shock, in the early 1980s with the debt crisis, and in the late 1980s with post-Berlin Wall meltdown in Eastern European economies.

This pattern is actually characteristic of every emerging region including Latin America (see Figure 2b). Only Asia differs markedly from this pattern—with China and India displaying exponential convergence since the late 1990s, while the rest of emerging Asia experienced a sustained but much slower convergence since the mid-1960s. 

From a Latin American perspective, the relevant question we need to ask is whether the recent bout of convergence that started in 2004 after a quarter of a century of relative income decline is a break with the past or just a short-lived phenomenon?

In order to address this question from a Latin American perspective, we study the arithmetic of convergence (i.e., whether mechanical projections are consistent with the convergence hypothesis) and the economics of convergence (i.e., whether income convergence was associated with a comparable convergence in the drivers of growth).

According to our definition of convergence,[1] since 1950, growth-convergence-development miracles represent a tiny fraction of emerging countries. Only five countries managed to achieve this: Japan, South Korea, Taiwan, Hong Kong and Singapore. In other words, convergence towards income per capita levels of rich countries is an extremely rare event.

But where does Latin America stand? Based on growth projections for the period 2014-2018, not a single Latin American country will converge to two-thirds of U.S. income per capita in two generations. Unfortunately, the arithmetic does not seem to be on the side of the region.

What about the economics? To answer this question, we analyze whether Latin America’s process of income convergence in the last decade was also associated with a similar convergence in the key drivers of growth: trade integration, physical and technological infrastructure, human capital, innovation, and the quality of public services. Figure 3 illustrates the results.

In contrast to relative income, during the last decade, LAC-7 [2] countries failed to converge towards advanced country levels in every growth driver. The overall index of growth drivers—the simple average of the five sub-indexes—remained unchanged in the last decade relative to the equivalent index for advanced economies. By and large, the latter holds true for every LAC-7 country with exceptions like Colombia (the only country that improved in every single growth driver in the last decade) and Chile (the country in the region where the levels of growth drivers are closer to those of advanced economies). 

Latin America had a decade of uninterrupted high growth rates—with the sole exception of 2009 in the aftermath of the Lehman crisis—that put an end to a quarter of a century of relative decline in income per capita levels vis-à-vis advanced economies. However, high growth and income convergence were largely the result of an unusually favorable external environment, rather than the result of convergence to advanced-country levels in the key drivers of growth. Fundamentally, the last was a decade of “development-less growth” in Latin America.

With the extremely favorable external conditions already behind us, the region is expected to grow at mediocre rates of around 2 percent in per capita terms for the foreseeable future. With this level of growth, the dream of convergence and development is unlikely to be realized any time soon.

To avoid such a fate the region must make a renewed effort of economic transformation. Although the challenges ahead appear to be huge, there is plenty of room for optimism. First, Latin America has built a sound platform to launch a process of development. Democracy has by-and-large consolidated across the region, and an entire generation has now grown up to see an election as the only legitimate way to select national leaders. Moreover, it is for the most part a relatively stable region with no armed conflicts and few insurgency movements threatening the authority of the state. Second, a sizeable group of major countries in Latin America have a long track record of sound macroeconomic performance by now. Third, the region could be just steps away from major economic integration. Most Latin American countries in the Pacific Coast have bilateral free trade agreements with their North American neighbors (11 countries with the U.S. and seven countries with Canada). Were these countries to harmonize current bilateral trade agreements among themselves—in the way Pacific Alliance members have been doing—a huge economic space would be born: a Trans-American Partnership that would comprise 620 million consumers, and have a combined GDP of more than $22 trillion (larger than the EU’s, and more than double that of China). Were such a partnership on the Pacific side of the Americas to gain traction, it could eventually be extended to Atlantic partners, in particular Brazil and other Mercosur countries.

In the last quarter of a century democracy, sound macroeconomic management and an outward-looking development strategy made substantial strides in the region. If these conquests are consolidated and the same kind of progress is achieved in key development drivers in the next 25 years, many countries in the region could be on the road to convergence.

[1] We define convergence as a process whereby a country’s income per capita starts at or below one-third of U.S. income per capita at any point in time since 1950, and rises to or above two-thirds of U.S. income per capita.

[2] LAC-7 is the simple average of Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela, which account for 93 percent of Latin America’s GDP.

We will likely look back on 2015 as a consequential year in China’s evolving global strategy. The September crash of the stock market in Shanghai marks the first contemporary occasion when China’s internal difficulties have had global consequences. In November, China will take over the leadership of the G-20 and have an opportunity to put its stamp on the evolving tools of global governance. And on September 28, President Xi Jinping will address the world during the 70th anniversary of the only global body in which China already has full powers—the United Nations.

A rising power, cut from different cloth

But with greater consequence comes greater responsibility. President Xi’s job at the U.N. in 2015 will be harder than in recent years. For the past several years the international community has been transfixed by the narrative of the rising powers, and of American, or at least Western, decline. Now, America’s economic recovery, its energy revolution, its leadership on Ebola, and its re-engagement around the Islamic State (or ISIS)—however partial—has gutted the “American decline” narrative. 

And Xi’s putative allies in the forging of a post-American order—Russia, Brazil, and India—won’t be nearly the help to China they have often been presumed to be. President Vladimir Putin will speak against the backdrop of Russia’s aggressive strategy in Ukraine and now Syria; Brazil’s President Dilma Roussef against the backdrop of a deep recession and a huge corruption scandal; and while President Narendra Modi is still riding relatively high internationally, he’s hardly riding in a pro-China direction. 

China is more consequential than any of these other three, of course. But it faces its own challenge to its narrative as it doubles down on its assertive posture in the South China Sea and as its handling of the stock market collapse shows serious cracks in the narrative of the “Beijing model.” As Chinese growth has slowed, especially in the manufacturing sector, so has its consumption of global commodities—and the knock-on effect has been slower growth in dozens of developing countries that had ridden China’s boom. China isn’t quite the alternative “pole” to the West it has been hyped to be. 

Still, China is now clearly the number two economy in the world; the number two defense spender; the dominant force in politics and economic integration in East Asia; and an increasingly important voice on global issues. So hype and narrative aside, the world will be listening closely to what President Xi has to say at the U.N.—as they will when he takes the reigns of the G-20. 

In what direction is Chinese leadership heading?

At a 700-person-strong gala dinner in Seattle on Tuesday, President Xi rehearsed the arguments. China is committed to a peaceful rise. China has learned the lesson of the Second World War, and recognizes that military hegemony is not an option. China is committed to the multilateral order, and the U.N. Charter. He even teased the international relations scholarly community: “There is no Thucydides trap,” he said, referring to the idea that the growth of Chinese power will cause fear in the United States and lead to war. He stressed his theme about forging a “new kind of great power relations” that eschewed military competition for more creative approaches to cooperation on win/win issues. 

All these would be welcome messages at the U.N., and if he means it, they are profoundly important messages. But if Xi wants these messages to be believed, if he wants to gain credibility at the global level, he’s going to have to do more than just talk a good game. 

First, China is going to have to start acknowledging that leadership is less about abusing the privileges of power and more about absorbing costs. The world may be hungry for leadership, but it’s not hungry for leadership of the abusive kind. It’s hungry for actors capable and willing to set a direction and bear the lion’s share of the costs of action—because that’s the only thing that’s ever overcome the collective action challenges that otherwise bedevil cooperation at the international level. 

China is going to have to start acknowledging that leadership is less about abusing the privileges of power and more about absorbing costs.

Second, he has to put his strategy where his principles are. He could start with the U.N. Charter. It’s an essential document of the international order, but only if the great powers abide by its essential principles (not by every detail.) The most essential of these are the prohibition against the acquisition of territory by force and the assertion of non-interference in sovereign affairs (except with the backing of the Security Council). The United States has violated these principles, notably in Iraq—its violation was of a temporary nature, of course, but had huge consequences. Russia has violated these principles—its violation in Crimea is modest in scale but notionally permanent and a fundamental violation of the foundational principles of the U.N.

China’s actions in the South China Sea have been more subtle than these, but no less invidious or injurious to the notion of a stable international order. If China wants others to believe that it still intends for its rise to be peaceful, it needs urgently to shift strategy in the South China Sea—and it would be in a strong position, then, to call on the other great powers to recommit themselves to the principle of the non-use of force and respect for sovereignty. 

[Xi] has to put his strategy where his principles are. He could start with the U.N. Charter.

I’m reasonably optimistic about the first idea. China was among the most neuralgic of countries when it came to the global response to SARS a decade ago; it’s learned its lesson and was far more forward leaning on Ebola. It chipped in, albeit not to scale, on the eurocrisis. It’s made financial contributions to the counter-ISIS campaign. And it’s made commitments that, if kept, will make a vital difference on the climate. These efforts represent a serious start, and if President Xi expands China’s role in this kind of leadership it could position him well on global issues—especially during his G-20 presidency. 

I’m not so optimistic about the second. China shows every sign of being locked in an assertive-tilting-to-aggressive strategy in the South China Sea, consequences be damned. And with Russia also seemingly locked into a “wrong-foot the West” strategy, the United States and its allies will increasingly be pulled into an escalatory response—creating exactly the kind of Thucydidean trap President Xi ostensibly wants to avoid. (The United States bears responsibility here too, and it can also take steps to lower tensions in Asia.) 

The problem is, the further out we go along the pathway of security tensions in Asia, the more we undermine the prospects for win-win cooperation on global challenges like terrorism and climate. For now, these twin strands of strategy are in roughly equal balance—both rivalry and restraint are leitmotifs of Xi’s worldview, and of America’s. But 2015 is going to be an important testing time for the viability of this dual-strand approach. If Xi wants to start tilting the balance to win/win approaches, his speech at the U.N. is a good place to start. But even that would only be a beginning.

For all the debate, speculation, and controversy that has surrounded the hoped-for growth of the so-called “clean” economy and “green jobs” one thing has been in pretty short supply: facts. 

For all the talk of its alluring promise, the clean or green economy remains an enigma, in large part due to the continued absence of standard national definitions and data.

Today that changes with a new report assessing the current nature, size, and growth of the “green” or “clean” economy in U.S. regions. 

Developed by the Brookings Metropolitan Policy Program in partnership with Battelle’s Technology Partnership Practice, our report and its underlying database--entitled “Sizing the Clean Economy”--are not perfect accountings. Still, I think you will agree they offer a compelling new national and metropolitan look at a sector of the economy that has remained at once an important aspiration and a frustrating enigma. Do look over the report; watch video of our release discussion; and check out the special interactive mapping tool we’ve developed--both of which are aimed at shedding further light on the geography of this hard-to-assess sector.

Over the last 18 months we’ve developed and analyzed a detailed database of establishment-level employment statistics pertaining to a sensibly defined assemblage of low-carbon and environmentally oriented industries in the United States and its metropolitan areas.

Covering the years 2003 to 2010 for larger U.S. metros, the resulting information provides a new source of timely information that is both consistently applied so as to allow cross-region comparisons but detailed enough to be of some use to inform national, state, and regional leaders on the dynamics of the U.S. low-carbon and environmental goods and services super-sector as they are transpiring in U.S. regions.

To be sure, localized drill-downs in particular places may capture a fuller profile in some regions. But overall, our new information provides what we believe is a plausible, useful, first-of-its-kind measure of the size and growth of the clean economy as it is occurring in the nation’s 100 largest metropolitan areas. 

What is more, our definition, approach, and data have been structured as much as possible to anticipate the Bureau of Labor Statistics’ own forthcoming “green jobs” count, due next year at somewhat broader levels of geography.  It’s time that all U.S. regions begin to have access to some at least rough order-of-magnitude facts about the size and shape of their clean economies.

During the height of the Ebola crisis in September 2014 there were 21 confirmed cases of the virus and 8 deaths in Nigeria. The African nation has the continent’s largest population, a high poverty rate, and the government spends relatively little on health care. At the time many were worried about a scenario where the virus spread throughout Nigeria. But, the Nigerian Minister of Health Onyebuchi Chukwu disagreed with that assessment. He commented to Forbes, “Nigeria will be as clean as any other country as far as Ebola virus disease is concerned.” His comments were proven to be accurate in the coming months. There were a variety of factors that contributed to Nigeria’s success at combating the disease. One important factor was the use of mobile electronic health records programs.

How mobile fights disease

1. Training Healthcare Workers

Training health care providers was a priority at the beginning of the Ebola outbreak. A survey found that 85 percent of health care workers in the country believed you could avoid Ebola by abstaining from handshakes or touching. Correcting these myths about the disease was a critical part of the response effort, especially for health care workers.

2. Rapid Deployment

One of the virtues of mHealth is its speed and flexibility. Mobile allows officials to quickly disseminate the latest information to front line health care workers. Increasing the speed of communication is a general boon to any large public health response.

3. Virtual Records

Ebola Treatment Units (ETU) greatly benefitted from using digital rather than paper records. Paper records cannot be removed from an ETU. Deborah Theobald co-founder of Vecna Technologies that created the mHealth platform in Nigeria has pointed out that, “If the patient is isolated, so is their paperwork”. Electronic records are easy to share and also lower the risk of infection for health care workers.

Mobile health policy challenges

Despite the potential benefits of mHealth, barriers in some countries prevent the full positive impact of these technologies from coming into effect. Many developing nations lack the electrical infrastructure that is necessary to power mobile devices. Health care regulations are often too overly bureaucratic and burdensome. This makes it difficult for innovators to develop and equip workers with mobile tools and applications. It often takes an emergency situation like the Ebola crisis to make substantive changes. Success in the long term is only possible if leaders create an environment that is more hospitable to mHealth.

Mobile interventions have also demonstrated potential to address important public health issues. Recently experts gathered at the Brookings Institution to discuss how mHealth can improve health outcomes. Apps like Mobile Midwife and Text4Baby can encourage healthy pregnancies by providing valuable tips to expecting mothers. Mobile health platforms are successful because they directly inform caregivers. The proliferation of mobile phones through the developing world presents a health opportunity to communicate with the people who need help.

It is estimated that there are 95 mobile phone subscriptions per 100 inhabitants worldwide, and this boom has not been lost on the developing world, where the number of mobile users has also grown at rocket speed. In fact, in recent years the information communication technology (ICT) revolution has provided opportunities leading to “death of distance,” allowing many obstacles to better livelihoods, especially for those in remote regions, to disappear. Remarkably, though, the huge proportion of poverty-stricken populations in so many of those same regions persists.

How might, then, we think differently on the relationship between these two ideas? Can and how might ICTs act as an engine for eradicating poverty and improving the quality of life in terms of better livelihoods, strong education outcomes, and quality health? Do today's communication technologies hold such potential?

In particular, the mobile phone’s accessibility and use creates and provides us with an unprecedented volume of data on social interactions, mobility, and more. So, we ask: Can this data help us better understand, characterize, and alleviate poverty?

Mapping call data records, mobility, and economic activity

The first step towards alleviating poverty is to generate poverty maps. Currently, poverty maps are created using nationally representative household surveys, which require manpower and time. Such maps are generated at a coarse regional resolution and continue to lag for countries in sub-Saharan Africa compared to the rest of the world.

As call data records (CDRs) allow a view of the communication and mobility patterns of people at an unprecedented scale, we show how this data can be used to create much more detailed poverty maps efficiently and at a finer spatial resolution. Such maps will facilitate improved diagnosis of poverty and will assist public policy planners in initiating appropriate interventions, specifically at the decentralized level, to eradicate human poverty and ensure a higher quality of life.

In order to create these detailed poverty maps, we first define the virtual network of a country as a “who-calls-whom” network. This signifies the macro-level view of connections or social ties between people, dissemination of information or knowledge, or dispersal of services. As calls are placed for a variety of reasons, including request for resources, information dissemination, personal etc., CDRs provide an interesting way to construct a virtual network for Senegal.

We start by quantifying the accessibility of mobile connectivity in Senegal, both spatially and across the population, using the CDR data. This quantification measures the amount of communication across various regions in Senegal. The result is a virtual network for Senegal, which is depicted in Figure 1. The circles in the map correspond to regional capitals, and the edges correspond to volume of mobile communication between them. Thicker edges mean higher volume of communication. Bigger circles mean heavier incoming and outgoing communication for that region.

Figure 1: Virtual network for Senegal with MPI as an overlay

Source: Author’s rendering of the virtual network of Senegal based on the dataset of CDRs provided as a part of D4D Senegal Challenge 2015

Figure 1 also shows the regional poverty index[1] as an overlay. A high poverty index corresponds to very poor regions, which are shown lighter green on the map. It is evident that regions with plenty of strong edges have lower poverty, while most poor regions appear isolated. 

Now, how can we give a more detailed look at the distribution of poverty? Using the virtual network, we extract quantitative metrics indicating the centrality of each region in Senegal. We then calculate centrality measures of all the arrondissements[2] within a region. We then correlate these regional centrality measures with the poverty index to build a regression model. Using the regression model, we predict the poverty index for each arrondissement.

Figure 2 shows the poverty map generated by our model for Senegal at an arrondissement level. It is interesting to see finer disaggregation of poverty to identify pockets of arrondissement, which are most in need of sustained growth. The poorer arrondissements are shown lighter green in color with high values for the poverty index.

Figure 2: Predicted poverty map at the arrondissement level for Senegal with MPI as an overlay

Source: Author’s rendering of the virtual network of Senegal based on the dataset of CDRs provided as a part of D4D Senegal Challenge 2015.

What is next for call data records and other Big Data in relation to eradicating poverty and improving the human development?

This investigation is only the beginning. Since poverty is a complex phenomenon, poverty maps showcasing multiple perspectives, such as ours, provide policymakers with better insights for effective responses for poverty eradication. As noted above, these maps can be used for decomposing information on deprivation of health, education, and living standards—the main indicators of human development index.

Even more particularly, we believe that this Big Data and our models can generate disaggregated poverty maps for Senegal based on gender, the urban/rural gap, or ethnic/social divisions. Such poverty maps will assist in policy planning for inclusive and sustained growth of all sections of society. Our methodology is generic and can be used to study other socio-economic indicators of the society.

Like many uses of Big Data, our model is in its nascent stages. Currently, we are working towards testing our methodology at the ground level in Senegal, so that it can be further updated based on the needs of the people and developmental interventions can be planned. The pilot project will help to "replicate" our methodology in other underdeveloped countries.

In the forthcoming post-2015 development agenda intergovernmental negotiations, the United Nations would like to ensure the “measurability, achievability of the targets” along with identification of 'technically rigorous indicators' for development. It is in this context that Big Data can be extremely helpful in tackling extreme poverty.

Note: This examination was part of the "Data for Development Senegal" Challenge, which focused on how to use Big Data for grass-root development. We took part in the Data Challenge, which was held in conjunction with NetMob 2015 at MIT from April 7-10, 2015. Our team received the National Statistics prize for our project titled, "Virtual Network and Poverty Analysis in Senegal.” This blog reflects the views of the authors only and does not reflect the views of the Africa Growth Initiative.

[1] As a measure of poverty, we have used the Multidimensional Poverty Index (MPI), which is a composite of 10 indicators across the three areas: education (years of schooling, school enrollment), health (malnutrition, child mortality), and living conditions.

[2] Senegal is divided into 14 administrative regions, which are further divided into 123 arrondissements.

Expanding formal financial services—including traditional services (offered by banks) and digital services (provided via mobile money systems)—to individuals previously excluded from their access can improve their capacity to save, make payments swiftly and securely, and cope with economic shocks. Importantly, having access to financial services is also considered a critical component of women’s full economic participation and empowerment. Many countries, therefore, are working to increase accessibility to and usage of formal financial services as important strategies to improving individuals’ financial stability and, at a macro-level, supporting inclusive development and growth.

In sub-Saharan Africa, where the provision and uptake of traditional financial services is limited due to a wide range of factors (including poverty, lack of savings, and poor infrastructure, among others), a number of governments are working to promote digital financial service offerings by creating an enabling environment for various entities (including bank and non-bank formal providers) to offer them. In turn, the region is leading global progress in the adoption of digital financial services: 12 percent of sub-Saharan African adults have a mobile money account (nearly half of whom exclusively use digital services) compared with only 2 percent of adults at the global level. In fact, in five African countries (Cote d’Ivoire, Somalia, Tanzania, Uganda, and Zimbabwe) more adults have mobile money accounts than have conventional bank accounts.

In the first of a series of publications exploring and sharing information that can improve financial inclusion around the world, the Brookings Financial and Digital Inclusion Project (FDIP) takes stock of progress toward financial inclusion in 21 countries from various economic, political, and geographic contexts and scores them along four key dimensions of financial inclusion: country commitment, mobile capacity, regulatory environment, and adoption of traditional and digital financial services. The interactive rankings and report were launched on Wednesday, August 26 at an event entitled, “Measuring progress on financial and digital inclusion.” According to the report’s findings, four out of the five top-scoring countries are located in sub-Saharan Africa. On the other hand, some of the lowest ranked countries were also African, demonstrating regional diversity in the pathways toward financial inclusion and their subsequent outcomes.

Here are some of our main takeaways from four of the nine African case studies featured in the report: Ethiopia (ranked #21 overall), Kenya (ranked #1), Nigeria (ranked #9), and South Africa (ranked #2). Kenya and Ethiopia are the highest- and lowest-ranked African countries in the report, respectively, while Nigeria and South Africa represent the continent’s two largest economies, which have achieved disparate outcomes in terms of financial inclusion. (For the overall rankings of the nine African countries included in the report, see Figure 1.)

Figure 1. Overall FDIP rankings of African countries

• Ethiopia’s overall financial and digital inclusion score was low due in large part to its poor mobile capacity and the low adoption rates of formal (particularly digital) financial services. The World Bank’s Global Financial Inclusion Index (Findex)—one of the major datasets highlighted in the report—reveals that only 22 percent of adults in Ethiopia had a formal financial account and about 0.03 percent of adults had a mobile money account in 2014.
• In addition, limited development of the information and communications technologies (ICT) sector and mobile communications infrastructure have inhibited mobile and digital access, reducing the array of financial products and services available to underserved populations.
• However, Ethiopian digital financial inclusion has the potential and political support to grow: The government is taking steps to address shortcomings in the enabling environment for digital financial service provision, for example, by adopting a mobile and agent banking framework in 2013. This framework sets the foundation for allowing banks and microfinance institutions to provide services through mobile phones and agents. The government is also in the process of developing a dedicated Financial Inclusion Council and secretariat in order to enhance participation from non-financial institutions (namely, mobile network operators) in developing policies for achieving greater digital financial inclusion.

Kenya: Mobile money innovations drive uptake

• Kenya scored highest in the overall rankings due to its highly accessible mobile networks, regulatory framework conducive to the development of digital financial services, and products that cater to consumer needs and so promote adoption. Kenya also has the highest rate of financial account penetration among women.
• Between 2011 and 2014, Kenya increased its levels of formal financial and mobile money account penetration by 33 percentage points owing mostly to robust take-up within the country’s vibrant mobile money ecosystem. Nearly 90 percent of Kenyan households reported using mobile money services as of August 2014, and the M-Pesa system (operated by Safaricom) is widely considered the leading driver of success in adoption of mobile money usage.
• Innovative services that have helped spur financial inclusion among marginalized groups have been developed within Kenya’s mobile network operator-led (MNO-led) approach: For example, in 2012, the Commercial Bank of Africa and Safaricom partnered together to provide the M-Shwari service, which offers interest-bearing mobile money accounts and microfinance.
• Still, one aspect of the mobile money system upon which the Kenyan government could improve is consumer protection of clients of credit-only institutions, such as microfinance institutions (MFIs) and savings and credit cooperatives (SACCOs). Lack of oversight could potentially leave users without adequate consumer protection as these institutions are not adequately regulated and supervised.

Nigeria: A stalled bank-led approach

• Nigeria achieved a moderate score in the FDIP rankings because, despite a number of country commitments in recent years, low levels of adoption persist. In fact, Nigeria’s increase in financial inclusion has not been driven by uptake of mobile money services: While the proportion of adults age 15 and older who have a mobile money or traditional bank account increased from 30 percent in 2011 to 44 percent in 2014, only 0.1 percent of adults had a registered mobile money account in 2014 and had used it at least once in the 90 days prior, according to an Intermedia survey.
• The Central Bank of Nigeria (CBN) has taken a bank-led approach to mobile money, in which banks promote their traditional services via the mobile network. This is an alternative approach to the MNO-led approach seen in Kenya, where MNOs provide the network of agents and manage customer relations. Some experts have noted that in cases where a bank-led approach is adopted, for example in India, the financial incentives are not strong enough for banks to expand their services to the unbanked, while mobile network operators on the other hand have greater “assets, expertise, and incentives” to launch and scale mobile money services.

South Africa: Strong mobile capacity, yet room for growth in adoption

• South Africa was ranked highest of all countries in the report in mobile capacity for its robust mobile infrastructure and large proportions of the population subscribing to mobile devices (70 percent) and covered by 3G mobile networks (96 percent). It also tied for the highest score of formal account penetration, including among rural, low-income, and female groups.
• In the past decade, financial inclusion (as measured by the proportion of the population using financial products and services—formal and informal) has increased dramatically from 61 percent in 2004 to 86 percent in 2014. This uptick can be partially attributed to the increase in banking and ownership of ATM/debit cards. Disparities in penetration exist, however, among gender and race, with women and white populations being more likely to be banked than men and black populations.
• As cited in the Brookings FDIP 2015 report, the 2014 Global Findex found that 14 percent of adults (age 15 and older) possessed a mobile money account in 2014. The top 60 percent of income earners were more than twice as likely to have accounts as the bottom 40 percent of the income scale. So despite strong mobile capacity, there is still room for growth in terms of mobile money penetration especially among low-income adults.

The FDIP case studies offer a number of insights into the policies and frameworks conducive to the uptake of formal financial services. In several of African countries considered to be mobile money “success stories,” for example, in Kenya (also see the Rwanda country profile in the report), mobile network operators play a substantial role in spearheading the drive toward financial inclusion and have collaborated closely with central banks, ministries of finance and communications, banks, and non-bank financial providers. Ensuring the participation of all stakeholders—not just governments and banks—in setting the national financial inclusion priorities and agenda, then, is critical. Furthermore, actively participating in multinational financial inclusion networks can enhance knowledge-sharing among members and lead to further country commitments. Finally, leading surveys of the national financial inclusion landscape can also help governments and financial service providers better target their strategies and services to the local needs and context.

Last month, we experienced yet another breakthrough in the epic battle of man against machine. Google’s AlphaGo won against the reigning Go champion Lee Sedol. This success, however, was different than that of IBM’s Deep Blue against Gary Kasparov in 1987. While Deep Blue still applied “brute force” to calculate all possible options ahead, AlphaGo was learning as the game progressed. And through this computing breakthrough that we can learn how to better leverage the data revolution.

In the game of Go, brute-force strategies don’t help because the total number of possible combinations exceeds the number of atoms in the universe. Some games, including some we played since childhood, were immune to computing “firepower” for a long time. For example, Connect Four wasn’t solved until 1995 with the conclusion being the first player can force a win. And checkers wasn’t until 2007, when Jonathan Schaeffer determined that in a perfect game, both sides could force a draw. For chess, a safe strategy has yet to be developed, meaning that we don’t know yet if white could force a win or, like in checkers, black could manage to hold on to a draw.

But most real-life situations are more complicated than chess, precisely because the universe of options is unlimited and solving them requires learning. If computers are to help, beyond their use as glorified calculators, they need to be able to learn. This is the starting point of the artificial intelligence movement.  In a world where perfection is impossible, you need well-informed intuition in order to advance. The first breakthrough in this space occurred when IBM’s Watson beat America’s Jeopardy! champions in 2011. These new intelligent machines operate in probabilities, not in certainty.

That being said, perfection remains important, especially when it comes to matters of life and death such as flying airplanes, constructing houses, or conducting heart surgery, as these areas require as much attention to detail as possible. At the same time, in many realms of life and policymaking we fall into a perfection trap. We often generate obsolete knowledge by attempting to explain things perfectly, when effective problem solving would have been better served by real-time estimates. We strive for exactitude when rough results, more often than not, are good enough.

By contrast, some of today’s breakthroughs are based on approximation. Think of Google Translate and Google’s search engine itself. The results are typically quite bad, but compared to the alternative of not having them at all, or spending hours leafing through an encyclopedia, they are wonderful. Moreover, once these imperfect breakthroughs are available, one can improve them iteratively. Only once the first IBM and Apple PCs were put on the market in the 1980s did the cycle of upgrading start, which still continues today.

In the realm of social and economic data, we have yet to reach this stage of “managed imperfection” and continuous upgrading. We are producing social and economic forecasts with solid 20th century methods. With extreme care we conduct poverty assessments and maps, usually taking at least a year to produce as they involve hundreds of enumerators, lengthy interviews and laborious data entry. Through these methods we are able to perfectly explain past events, but we fail to estimate current trends—even imperfectly.

The paradox of today’s big data era is that most of that data is poor and messy, even though the possibilities for improving it are unlimited. Almost every report from development institutions starts with a disclaimer highlighting “severe data limitations.” This is because only 0.5 percent of all the available data is actually being curated to be made usable. If data is the oil of the 21st century, we need data refineries to convert the raw product into something that can be consumed by the average person.

Thanks to the prevalence of mobile device and rapid advances in satellite technology, it is possible to produce more data faster, better, and cheaper. High-frequency data also makes it possible to make big data personal, which also increases the likelihood that people act on it. Ultimately, the breakthroughs in big data for development will be driven by managerial cultures, as has been the case with other successful ventures. Risk averse cultures pay great attention to perfection. They nurture the fear of mistakes and losing. Modern management accepts failure, encourages trial and error, and reaches progress through interaction and continuous upgrading.

Chairperson, Excellencies, distinguished Delegates, Ladies and Gentlemen,

I have come to New York from Kampala where I attended last week’s African Union Special Summit of Heads of State and Government on refugees, returnees and internally displaced persons in Africa. There, I witnessed the historic moment of the adoption of the AU Convention on the Protection and Assistance of Internally Displaced Persons in Africa. The importance of this Convention cannot be underestimated. Building on the UN Guiding Principles on Internal Displacement it is the first legally binding IDP-specific treaty covering an entire continent. The Convention is a tremendous achievement and a beacon of hope for the almost 12 million people in Africa internally displaced by conflict and the many more internally displaced by natural disasters, and hopefully serves as a model for other regions, too.  

I commend the African Union for its leadership in developing this Convention. I urge all African states to ratify it and implement its provisions, and I call on the international community to seize this momentum and to lend all support needed to its implementation. 

Mr. Chairperson, 

Reflecting on my mandate’s activities over the past 12 months, I would first like to highlight three topics: climate change and natural disasters, internal displacement and peace processes and the search for durable solutions for internally displaced persons. 

Climate Change and Internal Displacement

Climate change increases the frequency and magnitude of climate related disasters, both sudden-onset disasters like flooding and hurricanes and slow-onset disasters such as desertification. The negative impact of these disasters can be mitigated by adopting disaster risk reduction measures. Yet, it is expected that the number of persons displaced by climate related disasters will increase. Most of these people will remain within their own country; hence they will be internally displaced persons to whom the UN Guiding Principles on Internal Displacement apply. It is therefore crucial to enhance capacities of governments and humanitarian actors to provide protection and assistance to these persons. I strongly call on states to ensure that the adaptation and risk management regime of the new UNFCCC framework agreement covers forced displacement. 

Internal Displacement and Peace Processes

Finding durable solutions for internally displaced persons is an essential element of a successful peace process. The way the issue is addressed in peace agreements often predetermines how internal displacement is dealt with in the aftermath of conflicts. Many peace agreements reflect the issue of internal displacement insufficiently or haphazardly. Therefore, over the past 18 months and in close cooperation with the Mediation Support Unit of the Department for Political Affairs of the UN and humanitarian, human rights and mediation experts, I developed a guide on internal displacement and peace processes for mediators. This guide provides advice on how to consult with internally displaced persons and engage them in the different phases of a peace process even if they do not sit at the negotiation table and on what kind of key displacement-specific issues should be addressed in the text of a peace agreement. It will be published later this year.[1] 

I deepened my engagement with the Peacebuilding Commission through a country-based engagement on Central African Republic. I am pleased to see that the country specific strategic framework reflects many of the recommendations that I submitted on the basis of a working visit to this country last February. I plan to remain engaged with the Peacebuilding Commission in the course of the coming year. 

I call on all actors presently involved in peace and peacebuilding processes to adequately address the specific needs of IDPs in the aftermath of armed conflicts. 

Durable Solutions for IDPs

In the many missions I carried out over the past five years, I noticed that finding durable solutions for IDPs is always a tremendous challenge. It is a multi-faceted, long, complex and often expensive process, which requires the coordination and cooperation of a variety of actors from among national and local authorities, and the humanitarian and the development communities. With policy guidance such as that provided by the Framework for Durable Solutions—a document developed by my office and the Brookings-Bern Project on Internal Displacement a few years ago and presently being revised in close cooperation with relevant stakeholders[2]—we know what should be done, but we must improve on the ground. Too often the coordination between humanitarian and development actors is insufficient, the funding for early recovery activities is lacking or IDPs are simply not a priority in recovery, reconstruction and development plans resulting in gaps jeopardizing the sustainability of returns or local integration of the displaced when the humanitarian actors phase out and the development partners are not yet able to show tangible progress in restoring infrastructure, services and livelihoods. Based on my observations in many countries, I have come to the conclusion that the practical problems in this area are a consequence of systemic failures in bringing humanitarian and development actors together to work hand in hand at an early stage of recovery. In addition to differences in approaches and cultures, these failures can to a large extent be attributed to a lack of flexible funding mechanisms for early recovery and reconstruction in spite of some recent steps in the right direction, including the creation of the peace-building fund.  

Country Situations  

Mr. Chairperson, 

The second pillar of my mandate is the engagement in a constructive dialogue with governments. I am grateful that with a few exceptions the countries that I approached during this reporting period were open to engage with my mandate. 

Allow me to provide you with an update on important developments since the completion of my written report to the General Assembly:  

I carried out a mission to Somalia from 14 – 21 October. Lack of humanitarian access, security risks for humanitarian workers, and the sharp decline in donor contributions exacerbate this long-standing humanitarian crisis, and international attention to the plight of IDPs is largely insufficient. I was shocked by the degree of violence the civilian population and in particular internally displaced persons in South and Central Somalia suffer. Serious violations of international humanitarian and human rights law are committed in an environment of impunity. Such acts are a major cause of the displacement of 1.5 million persons, the majority of whom are women and children. They remain highly vulnerable and exposed to serious human rights violations, in particular sexual violence, during flight and in IDP settlements. Many of the displaced try to reach safety in Puntland or Somaliland, where the high number of internally displaced persons puts enormous strain on the limited existing resources and basic services available. Reception capacities for new internally displaced persons must be strengthened and basic services expanded to reduce the burden on host communities. Further robust development interventions are needed to transform humanitarian action into sustainable livelihoods and investing into education and job opportunities for the youth is a must in an environment where recruitment by radical forces is often the only opportunity offered to them. Present efforts by the authorities, humanitarian, development and human rights actors are largely insufficient to bring urgently needed change. I urgently call on the international community to strengthen these efforts and to reaffirm its commitment to Somalia. 

I was twice in Sri Lanka over the past six months; in April, shortly before the end of hostilities, and again in September at a time the security situation had vastly improved, although over 250,000 internally displaced were still held in closed camps. Restoration of their freedom of movement has become a matter of urgency, and immediate and substantial progress in this regard is an imperative for Sri Lanka to comply with its commitments under international law. I discussed a three-pronged strategy for decongesting the camps with the government, which is based on returns of IDPs to their homes, release of IDPs to host families and transfer of IDPs to small open welfare centers in the region of return as a transitional solution until return is possible. I urged the Government to pursue these options in parallel with highest priority, to speed up the screening procedures, and to immediately release those not deemed to pose a security threat. Since my visit, this process has started. I acknowledge the progress made so far in demining and reconstructing returnee areas and releasing and returning a good number of displaced people to Jaffna and Mannar, Trincomalee and Batticaloa as well as to Vavuniya and Killinochi. I underline that this return needs to happen according to international standards. At the same time, I continue to reiterate that the ultimate goal is the restoration of freedom of movement and finding durable solutions for all IDPs. 

During my visit to Georgia of last autumn, I reiterated that there should be no discrimination between different persons internally displaced in Georgia’s different waves of displacement. The approximately 220,000 individuals who have been displaced over the long-term in Georgia should be able to avail themselves of the same possibilities to improve their living conditions as are enjoyed by those more recently displaced. I welcome that in the meantime the government has adopted an action plan to improve the housing situation of the long-term displaced and started to implement it. I am also grateful that a solution was found allowing me to visit the Tskhinvali region/South Ossetia region next week. 

I remain engaged on the situation in the Democratic Republic of the Congo. In March 2010, six other special procedures and I will report to the Human Rights Council on progress the DRC made in implementing a series of recommendations we previously made on how to tangibly improve the situation on the ground. Despite encouraging returns of 110,000 persons in North Kivu Province over the last two months, I remain concerned about the overall deterioration of the humanitarian situation due to the continued attacks on civilian populations carried out by LRA (Lord’s Resistance Army) militias and the impact of the military operations against the FDLR (Forces Démocratiques pour la Libération du Rwanda) armed group and the FDLR’s reprisals against the civilian population triggering new displacements.  

My working visits to Uganda and Serbia had a special focus on durable solutions. In Uganda, I was impressed to see that the majority of the formerly 1.8 million internally displaced persons have returned to their villages and I expressed my appreciation to the Government for its continued efforts. Sustaining returns remains a challenge that must be addressed by quick impact recovery and development activities, which requires stronger action by development agencies and support of donors. Despite the huge progress made thus far, the fate of a considerable number of particularly vulnerable individuals left behind in camps or living in transit sites as well as a general lack of synchronicity between the phasing out of humanitarian assistance and the increase of development activities in returnee areas continue to be a source of concern. 

Many of the 200,000 persons internally displaced from and within Kosovo (I am using the term in accordance with the U.N. position of strict neutrality on the status question) have not yet found a durable solution. I note with appreciation that all relevant authorities in Pristina expressed their commitment to facilitate returns of displaced persons, regardless of their ethnicity. However, due to entrenched patterns of discrimination in every sector of life and also a lack of support, in particular at the municipal level, there have only been a few sustainable returns. At the same time, I wish to reemphasize that the right for a dignified life and the right to return are not mutually exclusive. In this respect, I would like to commend the increased efforts of the Government of Serbia to improve the living conditions of internally displaced persons who have not returned.  

Mr. Chairperson, 

This is my last report which I present personally in my capacity as Representative of the Secretary-General to the General Assembly. Over the past five years, I have seen encouraging trends.  The UN Guiding Principles are now firmly rooted as the relevant framework for the protection of internally displaced persons, legislation and policies have been developed at national and regional level and the cluster approach has led to an improved humanitarian response. Overall, states and humanitarian and developmental actors are better prepared and equipped today to address the plight of the more than 50 million persons displaced within their countries. This is badly needed as the effects of climate change will lead to new displacement. At the same time, it is worrying to see that armed conflict are conducted with utter disregard for the civilian populations in several parts of the world, the humanitarian space is shrinking in many countries, and many displacement situations that were protracted when I assumed this mandate remain unchanged. 

A new mandate-holder will be named next summer and I trust that he or she will also benefit from the particular strengths that currently characterize my mandate. As a Representative of the Secretary-General, I enjoy excellent access to Governments and other important stakeholders, I receive remarkable support of the relevant entities of the United Nations and from donors, and my participation as a standing invitee to the Inter-Agency Standing Committee is key to reach out to the wider humanitarian community.  

Thank you.

Introduction

Guaranteeing the right to vote and to participate in public and political affairs for all citizens is an important responsibility. Given the precarious position that IDPs can find themselves in and considering the extent to which they may need to rely on national authorities for assistance, IDPs have a legitimate and a heightened interest in influencing the decisions that affect their lives by participating in elections.   

Internally displaced persons often exist on the margins of society and are subject to a number of vulnerabilities because of their displacement. For instance, IDPs face an immediate need for protection and assistance in finding adequate shelter, food, and health care. Over time, they can suffer discrimination in accessing public services and finding employment on account of being an IDP from another region or town. IDPs also face an especially high risk of losing ownership of their housing, property, and land, something which can lead to loss of livelihoods and economic security as well as physical security. Women and children, who often make up the majority of IDP populations, face an acute risk of sexual exploitation and abuse.  

In addition to influencing public policy, elections can also be about reconciliation and addressing divisions and inequities that exist within society. For these reasons and others, IDPs should be afforded an opportunity to fully participate in elections as voters and as candidates.   

As noted in a press release of the Representative of the Secretary General of the United Nations on the Human Rights of Internally Displaced Persons following an official mission to Georgia in December 2005, 

“[IDP] participation in public life, including elections, needs promotion and support. Supporting internally displaced persons in their pursuit of a normal life does not exclude, but actually reinforces, the option of eventual return. … Well integrated people are more likely to be productive and contribute to society, which in turn gives them the strength to return once the time is right."[1]

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Since the Rose Revolution in November 2003, Georgia has grappled with the many challenges of building a modern, Western-oriented state, including implementing political and economic reforms, fighting corruption, and throwing off the vestiges of the Soviet legacy. On the path toward a functioning and reliable democracy, Georgia has pursued these domestic changes in an often difficult international environment, as evidenced by the Russia-Georgia conflict in 2008.

On March 17, the Center on the United States and Europe at Brookings (CUSE) hosted President Mikheil Saakashvili to discuss Georgia’s approach to these challenges. A leader of Georgia’s 2003 Rose Revolution, Saakashvili was elected president of Georgia in January 2004 and reelected for a second term in January 2008.

Vice President Martin Indyk, director of Foreign Policy at Brookings, provided introductory remarks and Senior Fellow and CUSE Director Fiona Hill moderated the discussion. After the program, President Saakashvili took audience questions.

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• Georgia Is a Transformed Country
• Georgia Is a Valuable Asset to Europe
• The Key to Effective Change Is Youth

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• From Popular Revolutions to Effective Reforms: The Georgian Experience

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• Uncorrected Transcript (.pdf)

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Recent events in Ukraine have raised important questions about Russian ambitions in the former Soviet space and the future political perspectives of the countries caught between Russia and the European Union. These countries are facing substantial obstacles in their efforts to maintain balanced relations with the United States, the European Union and the Russian Federation because of increased Russian political, economic and military pressures. In Ukraine, the annexation of Crimea and the ongoing turmoil in the East threaten the Ukrainian government's ability to maintain its independence and the sovereignty of Ukraine. Georgia and Moldova have expressed their intention to sign Association Agreements with the European Union, but increasingly face the prospects of destabilizing Russian economic sanctions and even the possible rekindling of their “frozen conflicts” in Abkhazia, South Ossetia and Transnistria.

On April 29, the Center on the United States and Europe at Brookings (CUSE) will host the ambassadors of Georgia, Moldova and Ukraine—Ambassadors Archil Gegeshidze, Olexander Motsyk and Igor Munteanu—as well as Eric Rubin, U.S. deputy assistant secretary of State for European and Eurasian Affairs, to discuss the dilemmas of these countries and possible solutions. Fiona Hill, director of CUSE, will introduce the speakers and moderate the discussion.

After opening remarks, panelists will take questions from the audience.

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• A Discussion with the Ambassadors of Georgia, Moldova and Ukraine

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I write this as I learn of the beating death of an Azerbaijani journalist Rasim Aliyev. His “crime” was to post a Facebook item about football. What follows seems insignificant compared to his murder.

Two articles have appeared in prominent Western outlets in the past month addressing developments in the South Caucasus and the need for adjustments in U.S. (and Western) policy toward the region. The first was an excellent, in-depth Brookings report titled "Retracing the Caucasian Circle—Considerations and Constraints for U.S., EU, and Turkish Engagement in the South Caucasus"; the second was a shorter essay that Bill Courtney, Denis Corboy, and I penned for Newsweek on the need to reboot policy toward Armenia, Azerbaijan, and Georgia. Both reflected the difficulty of writing about the “South Caucasus” as if the three countries had common interests and objectives. Increasingly these interests and objectives are diverging, except for a growing unhappiness with the United States and the West for not paying attention to—or doing enough to support—the region. In the case of Azerbaijan, the frustration stems from U.S. leaders paying too much attention to the appalling human rights situation in the country.

What’s making the Azerbaijanis so upset with the West?

The authors of the Brookings report point to elite cynicism over Western disinterest and policy failures in the region as sources of Azerbaijani leaders’ unhappiness. This, in their view, is causing Armenia, Georgia, and Azerbaijan—for different reasons and in different ways—to tack toward Russia.

We have a different take in our Newsweek piece. We argue that the unhappiness results from governing elites recognizing that U.S. and Western policy regarding human rights, democracy building, corruption, and conflict resolution (especially the Nagorno-Karabakh conflict) threaten regime stability. Therefore, the tacking toward Russia is a conscious choice to avoid pressure and the transparency that closer association with the United States and Europe would involve.

The new orientation of these countries requires serious adjustment in Western policies. There are four new drivers prompting change (beyond the role of Russia): the regional consequences of the Iran nuclear agreement; the growing economic crisis, which is affecting the South Caucasian states in different ways; the threat of renewed military conflict between Armenia and Azerbaijan; and the internal security implications of suppression of human rights. While each country responds to these drivers in different ways, they are the source of a new dynamic in the South Caucasus that requires a fresh Western policy approach.

Three wild cards will shape these drivers and the Western approach to them: First, how hard will Russian President Vladimir Putin push his objective of rolling back the degree of Western influence achieved since the fall of the Soviet Union? Second, how well will Iran play the nuclear agreement card, especially regarding its reentry into global energy markets? Third, how distracting will Turkey’s military response to the Islamic State and the Kurdistan Workers’ Party (PKK) be for Turkey’s interests in the South Caucasus and its objective of becoming a regional energy hub?

The shortcomings of soft regionalism

What is to be done? Faced with such a challenging situation, the default policy response is to provide more assistance (economic and military), dispatch senior officials from Western capitals to visit the region, and indulge (rather than criticize) democracy and human rights abuses, all in the name of developing a strategic partnership. In other words: Show more love.

That business-as-usual approach is inappropriate for these challenging times. In the case of Azerbaijan, it is an inappropriate response to the continued violations by the Baku regime of basic human rights and freedom of expression.

The Brookings paper suggests a multilateral approach (involving the United States, EU, and Turkey) based on soft regionalism. I do not believe that soft regionalism will work. The best we can hope for is parallel bilateral engagement on the basis of common interests (e.g. conflict prevention) and shared values (e.g. democratic evolution, observance of human rights). We need to treat the energy issue in the region as a commercial rather than geopolitical one. Changes in the global energy market have undermined the geopolitical significance of Caspian energy resources compared to two decades ago. With low energy prices likely the norm for the near future, energy no longer plays a strategic role for the region. Among other weaknesses, the soft regionalism prescription implies coordinated interests with Turkey—this will be difficult absent an opening in Turkish-Armenian relations.

Who needs who more?

The burden of choice in this relationship with the West must shift from the outside parties to the South Caucasian states themselves. The outsiders should stop talking about “strategic” partnerships, trans-Caspian pipelines and Silk Roads because this perpetuates a “you-need-us-more-than-we-need-you” starting point. Rather, the time has come for Armenia, Azerbaijan, and Georgia to decide on their own where their interests coincide with those of the West. That’s where we and they can begin to develop meaningful relationships, rather than trying to invent a veneer to cover differences—as in the case of Azerbaijan’s record on human rights.

Another recent article in Newsweek, by Theodore Gerber and Jane Zavisca, raised questions about promoting democracy and human rights where populations and elites are skeptical of U.S. motivations in promoting these issues. Fairly, the article questions the effectiveness of the traditional instruments of promoting opposition political parties and local NGOs as a way of winning “hearts and minds” in the former Soviet Union. Unfortunately, these traditional instruments tend to emphasize the attractiveness of the “American way of life” through student and scientific exchanges. This offers a variant on the soft regionalism theme advanced in the Brookings paper. Both require a receptivity to change that both elites and populations increasingly find threatening. Developing a values-based relationship is difficult when values diverge.

To the extent our interests do not coincide, then the Western policy focus must be transactional and rest exclusively on conflict prevention and/or amelioration. It also should not shy away from pressing all three South Caucasian states on their obligations to observe international standards regarding human rights, democracy, and freedom of expression.