The renminbi seems to be back in business as a Chinese tool of retaliation against US tariffs. A 1.5 per cent fall in the currency early this month in response to proposed new US tariffs was only a start. Since the middle of August the renminbi has weakened further, and the exchange rate is now 4 per cent weaker than at the start of the month. We may well see more of a ‘weaponized’ renminbi, but there are four good reasons why Beijing might be wise to think before shooting.

The first has to do with how China seeks to promote its place in the world. China has been at pains to manage the collapse of its relations with the US in a way that allows it to present itself as an alternative pillar of global order, and as a source of stability in the international system, not to mention moral authority. This has deep roots.

Anyone investigating the history of Chinese statecraft will quickly come across an enduring distinction in Chinese thought: between wang dao, the kingly, or righteous way, and ba dao, the way of the hegemon. Since Chinese thinkers and officials routinely describe US behaviour since the Second World War as hegemonic, it behoves Chinese policymakers to do as much as possible to stay on moral high-ground in their behaviour towards Washington. Only in that way would President Xi be able properly to assert China’s claim to leadership.

Indeed, China has a notable track record of using exchange rate stability to enhance its reputation as a force for global stability. Both in the aftermath of the Asian crisis in 1997, and of the Global Financial Crisis in 2008, Chinese exchange rate stability was offered as a way of demonstrating China’s trustworthiness and its commitment to multilateral order.

Devaluing the renminbi in a meaningful way now might have a different rationale, but the cost to China’s claim to virtue, and its bid to offer itself as a guardian of global stability, might be considerable.

That’s particularly true because of the second problem China has in thinking about a weaker renminbi: it may not be all that effective in sustaining Chinese trade. One reason for this is the increasing co-movement with the renminbi of currencies in countries with whom China competes.

As the renminbi changes against the dollar, so do the Taiwan dollar, the Korean won, the Singapore dollar and the Indian rupee. In addition, the short-run impact of a weaker renminbi is more likely to curb imports than to expand exports, and so its effects might be contractionary. 

An ineffective devaluation of the renminbi would be particularly useless because of the third risk China needs to consider, namely the risk of retaliation by the US administration. Of this there is already plenty of evidence, of course.

The US Treasury’s declaration of China as a ‘currency manipulator’ on 5 August bears little relationship to the actual formal criteria that the Treasury uses to define that term, but equally the US had warned the Chinese back in May that these criteria don’t bind its hand. By abandoning a rules-based approach to the definition of currency manipulation, the US has opened wide the door to further antagonism, and Beijing should have no doubt that Washington will walk through that door if it wants to.

The fourth, and possibly most self-destructive, risk that China has to consider is that a weaker renminbi might destabilize China’s capital account, fuelling capital outflows that would leave China’s policymakers feeling very uncomfortable.

Indeed, there is already evidence that Chinese residents feel less confident that the renminbi is a reliable store of value, now that there is no longer a sense that the currency is destined to appreciate against the dollar. The best illustration of this comes from the ‘errors and omissions’, or unaccounted-for outflows, in China’s balance of payments.

The past few years have seen these outflows rise a lot, averaging some $200 billion per year during the past four calendar years, or almost 2 per cent GDP; and around $90 billion in the first three months of 2019 alone. These are scarily large numbers.

The risk here is that Chinese expectations about the renminbi are ‘adaptive’: the more the exchange rate weakens, the more Chinese residents expect it to weaken, and so the demand for dollars goes up. In principle, the only way to deal with this risk would be for the People's Bank of China (PBOC) to implement a large, one-off devaluation of the renminbi to a level at which dollars are expensive enough that no one wants to buy them anymore.

This would be very dangerous, though: it presupposes that the PBOC could know in advance the ‘equilibrium’ value of the renminbi. It would take an unusually brave central banker to claim such foresight, especially since that equilibrium value could itself be altered by the mere fact of such a dramatic change in policy.

No one really knows precisely by what mechanism capital outflows from China have accelerated in recent years, but a very good candidate is tourism. The expenditure of outbound Chinese tourists abroad has risen a lot in recent years, and that increase very closely mirrors the rise in ‘errors and omissions’. So the suspicion must be that the increasing flow of Chinese tourists – nearly one half of whom last year simply travelled to capital-controls-free Hong Kong and Macao – is just creating opportunities for unrecorded capital flight.

This raises a disturbing possibility: that the most effective way for China to devalue the renminbi without the backfire of capital outflows would be simultaneously to stem the outflow of Chinese tourists. China has form in this regard, albeit for differing reasons: this month it suspended a programme that allowed individual tourists from 47 Chinese cities to travel to Taiwan.

A more global restriction on Chinese tourism might make a devaluation of the renminbi ‘safer’, and it would have the collateral benefit of helping to increase China’s current account surplus, the evaporation of which in recent years owes a lot to rising tourism expenditure and which is almost certainly a source of unhappiness in Beijing, where mercantilism remains popular.

But a world where China could impose such draconian measures would be one where nationalism has reached heights we haven’t yet seen. Let’s hope we don’t go there.

This article was originally published in the Financial Times.

In the five months since the last extension of the Brexit deadline, the questions about the UK’s trading relationship with the EU remain as open as before, as do those about what sort of relationship it should seek with other partners.

The world has not stood still, however, and so the UKTPO is convening another panel to consider constructive ways of moving forward. The panel will discuss potential trajectories for UK trade policy, followed by a question and answer session.

The UK Trade Policy Observatory (UKTPO) is a partnership between Chatham House and the University of Sussex which provides independent expert comment on, and analysis of, trade policy proposals for the UK as well as training for British policymakers through tailored training packages.

At this event, which forms the second annual UK Trade Policy Observatory conference, there will be six presentations over the course of the day before concluding with a panel discussion and Q&A. This year’s conference will focus on the following legal areas of trade policy:

• Blockchain: Creating and Eliminating Trade in Services
• China's Role in the International Trading System
• Official Export Support: Compliance and Competition Concerns
• Strategic Litigation and Health Regulation: Implications for International Economic Law
• Development, Labour Standards and Sustainability in Trade Agreements
• Retaining Versus Reforming EU Food Safety Legislation: Selected Issues for a US-UK Trade Negotiation

To register for this event, please click here. 

Summary

• Multilateralism may, in theory, put countries on an equal economic footing. But in practice the concept has often relied on an anchor government to create and preserve global norms. Under the presidency of Donald Trump, the US has accelerated its move away from leadership in global economic governance. This shift threatens the monetary and trading systems that have long underpinned globalization. Does the global economy need – and can it find – another leader to take America’s place?
• In the monetary sphere, the US role in providing an internationalized currency has endured relatively well, even though the US’s formal anchoring of the global exchange rate system collapsed nearly half a century ago. Governance of the US dollar and of the dollar-based financial system has largely been left to competent technocrats.
• Recent US political uncertainty has encouraged other governments, particularly in the eurozone and China, in their long-standing quest to supplant the dollar. But these economies’ internal weaknesses have prevented their respective currencies from playing a wider role. Arguments for a multipolar system exist, yet network effects plus the dollar’s superior institutions mean it has retained its dominance.
• In trade, the US role as anchor of the global legal order was already looking unreliable before Trump’s election. Washington has faced growing resistance at home to its global responsibilities. This, together with the idiosyncratic rise of countries such as China, has made the US an increasingly unreliable and narrowly transactional leader.
• More recently, hard-to-regulate issues such as foreign direct investment, technology transfer and data flows, often with national security implications, are increasingly undermining the ideal of multilateral global governance. Institutions such as the World Trade Organization, focused on cross-border trade in goods and services, are becoming less relevant.
• Recent US actions against the Chinese technology firm Huawei show the Trump administration’s willingness to decouple the US market from China and try to drag other economies with it. As far as possible, other governments should resist taking sides. A complete separation of the global economy into rival spheres is probably unfeasible, and certainly highly undesirable.
• Although future US administrations may be less wantonly destructive, it is not realistic to expect them to resume America’s former role. Nor can the US simply be replaced with another power. Instead, coalitions of governments with interests in international rules-based orders will need to form. These coalitions will need to show due deference to issues like investment and national security, especially where attempts to bind governments by multilateral rules are likely to provoke a severe backlash from domestic constituencies.

The upcoming UK general election is arguably a 'Brexit election', and as such, whoever wins the election will have little time to get their strategy for Brexit up and running to meet the new Brexit deadline of 31 January 2020. But what are the political parties’ policies for the UK's future trade? This event will present and discuss what the five main parties’ manifestos imply for future UK trade. Each manifesto will be presented and analysed by a fellow of the UK Trade Policy Observatory (UKTPO) and will be followed by a Q&A session. 

An infectious disease outbreak has long been a top national security risk in several countries, but the speed and extent of COVID-19’s spread and the scale of its social and economic impact has come as an enormous and deeply worrying shock.

This pandemic is not just a global medical and economic emergency. It could also prove a decisive make-or-break point for today’s system of global political and economic cooperation.

This system was built up painstakingly after 1945 as a response to the beggar-thy-neighbour economic policies of the 1930s which led to the Second World War. But it has been seriously weakened recently as the US and China have entered a more overt phase of strategic competition, and as they and a number of the other most important global and regional players have pursued their narrowly defined self-interest.

Now, the disjointed global economic response to COVID-19, with its enormous ramifications for global prosperity and economic stability, has blown into the open the urgent need for an immediate reaffirmation of international political and economic cooperation.

What is needed is a clear, coordinated and public statement from the leaders of the world’s major countries affirming the many things on which they do already agree, and some on which they should be able to agree.

In particular that:

• they will give the strongest possible support for the WHO in leading the medical response internationally;
• they will be transparent and tell the truth to their peoples about the progress of the disease and the threat that it represents;
• they will work together and with the international financial institutions to provide businesses, particularly SMEs, and individuals whatever support they need to get through the immediate crisis and avoid long-term damage to the global economy; 
• they will ensure the financial facilities for crisis support to countries - whether at global or regional level - have whatever resources they need to support countries in difficulty;
• they will avoid new protectionist policies - whether in trade or finance;
• they commit not to forget the poor and vulnerable in society and those least able to look after themselves.

Such a statement could be made by G20 leaders, reflecting the group’s role since 2010 as the premier forum for international economic cooperation.

But it could be even more appropriate coming from the UN Security Council, recognising that COVID-19 is much more than an economic challenge; and also reflecting the practical fact, in a time when international travel is restricted, the UNSC has an existing mechanism in New York to negotiate and quickly agree such a statement.

A public statement by leading countries could do a great deal to help arrest a growing sense of powerlessness among citizens and loss of confidence among businesses worldwide as the virus spreads.

It could also set a new course for international political and economic cooperation, not just in relation to the virus, but also other global threats with potentially devastating consequences for economic growth and political stability in the coming years.

COVID-19 is a sharp reminder of why trade and climate policy matters. How can governments maintain access to critical goods and services, and ensure global supply chains function in times of crisis?

The timing of many trade negotiations is now increasingly uncertain, as are the UK’s plans to host COP26 in November. Policy work continues, however, and the EU has released its draft negotiating text for the new UK-EU trade deal, which includes a sub-chapter specifically devoted to climate. 

This is a timely reminder both of the pressing need for the UK to integrate its trade and climate policymaking and to use the current crisis-induced breathing space in international negotiations - however limited - to catch up on both strategy and priorities on this critical policy intersection.

The UK government has moved fast to reset its external trade relations post-Brexit. In the past month it formally launched bilateral negotiations with the EU and took up a seat at the World Trade Organization (WTO) as an independent member. Until the COVID-19 crisis hit, negotiations were also poised to start with the US.

The UK is also in the climate spotlight as host of COP26, the most important international climate negotiation since Paris in 2015, which presents a vital opportunity for the government to show leadership by aligning its trade agenda with its climate and sustainability commitments in bold new ways.

Not just an empty aspiration

This would send a signal that ‘Global Britain’ is not just an empty aspiration, but a concrete commitment to lead.

Not only is concerted action on the climate crisis a central priority for UK citizens, a growing and increasingly vocal group of UK businesses committed to decarbonization are calling on the government to secure a more transparent and predictable international market place that supports climate action by business.

With COP26, the UK has a unique responsibility to push governments to ratchet up ambition in the national contributions to climate action – and to promote coherence between climate ambition and wider economic policymaking, including on trade. If Britain really wants to lead, here are some concrete actions it should take.

At the national level, the UK can pioneer new ways to put environmental sustainability – and climate action in particular - at the heart of its trade agenda. Achieving the government’s ambitious Clean Growth Strategy - which seeks to make the UK the global leader in a range of industries including electric cars and offshore wind – should be a central objective of UK trade policy.

The UK should re-orient trade policy frameworks to incentivize the shift toward a more circular and net zero global economy. And all elements of UK trade policy could be assessed against environmental objectives - for example, their contribution to phasing out fossil fuels, helping to reverse overexploitation of natural resources, and support for sustainable agriculture and biodiversity.

In its bilateral and regional trade negotiations, the UK can and should advance its environment, climate and trade goals in tandem, and implementation of the Paris Agreement must be a core objective of the UK trade strategy.

A core issue for the UK is how to ensure that efforts to decarbonise the economy are not undercut by imports from high-carbon producers. Here, a ‘border carbon adjustment (BCA)’ - effectively a tax on the climate pollution of imports - would support UK climate goals. The EU draft negotiating text released yesterday put the issue of BCAs front and centre, making crystal clear that the intersection of climate, environment and trade policy goals will be a central issue for UK-EU trade negotiations.

Even with the United States, a trade deal can and should still be seized as a way to incentivize the shift toward a net zero and more circular economy. At the multilateral level, as a new independent WTO member, the UK has an opportunity to help build a forward-looking climate and trade agenda.

The UK could help foster dialogue, research and action on a cluster of ‘climate and trade’ issues that warrant more focused attention at the WTO. These include the design of carbon pricing policies at the border that are transparent, fair and support a just transition; proposals for a climate waiver for WTO rules; and identification of ways multilateral trade cooperation could promote a zero carbon and more circular global economy.  

To help nudge multilateral discussion along, the UK could also ask to join a critical ‘path finder’ effort by six governments, led by New Zealand, to pursue an agreement on climate change, trade and sustainability (ACCTS). This group aims to find ways forward on three central trade and climate issues: removing fossil fuel subsidies, climate-related labelling, and promoting trade in climate-friendly goods and services.

At present, the complex challenges at the intersection of climate, trade and development policy are too often used to defer or side-step issues deemed ‘too hard’ or ‘too sensitive’ to tackle. The UK could help here by working to ensure multilateral climate and trade initiatives share adjustment burdens, recognise the historical responsibility of developed countries, and do not unfairly disadvantage developing countries - especially the least developed.

Many developing countries are keen to promote climate-friendly exports as part of wider export diversification strategies  and want to reap greater returns from greener global value chains. Further, small island states and least-developed countries – many of which are Commonwealth members – that are especially vulnerable to the impacts of climate change and natural disasters, need support to adapt in the face of trade shocks and to build climate-resilient, trade-related infrastructure and export sectors.

As an immediate next step, the UK should actively support the growing number of WTO members in favour of a WTO Ministerial Statement on environmental sustainability and trade. It should work with its key trading partners in the Commonwealth and beyond to ensure the agenda is inclusive, supports achievement of the UN Sustainable Development Goals (SDGs) and helps developing countries benefit from a more environmentally sustainable global economy.

As the UK prepares to host COP26, negotiates deals with the EU and US, and prepares for its first WTO Ministerial meeting as an independent member, it must show it can lead the way nationally, bilaterally, and multilaterally. And to ensure the government acts, greater engagement from the UK’s business, civil society and research sectors is critical – we need all hands on deck to forge and promote concrete proposals for aligning UK trade policy with the climate ambition our world needs.

There were several notable achievements during last week’s Spring meetings. The Fund’s frank set of forecasts for world GDP growth are a grim but valuable reminder of the scale of the crisis we are facing, and the Fund’s richer members will finance a temporary suspension on payments to the IMF for 29 very poor countries.

Most importantly, a boost to the Fund’s main emergency facilities - the Rapid Credit Facility and the Rapid Financing Instrument - now makes $100bn of proper relief available to a wide range of countries. But the core problem is that the vast bulk of the Fund’s firepower is effectively inert.

This is because of the idea of 'conditionality', which underpins almost all of the IMF’s lending relationships with member states. Under normal circumstances, when the IMF is the last-resort lender to a country, it insists that the borrowing government tighten its belt and exercise restraint in public spending.

This helps to achieve three objectives. One is to stabilise the public debt burden, to ensure that the resources made available are not wasted. The second is to limit the whole economy’s need for foreign exchange, a shortage of which had prompted a country to seek IMF help in the first place. And the third is to ensure that the IMF can get repaid.

Role within the international monetary system

Since the IMF does not take any physical collateral from countries to whom it is lending, the belt-tightening helps to act as a kind of collateral for the IMF. It helps to maximise the probability that the IMF does not suffer losses on its own loan portfolio — losses that would have bad consequences for the Fund’s role within the international monetary system.

This is a perfectly respectable goal. Walter Bagehot, the legendary editor of The Economist, established modern conventional wisdom about managing panics. Relying on a medical metaphor that feels oddly relevant today, he said that a panic 'is a species of neuralgia, and according to the rules of science you must not starve it.' 

Managing a panic, therefore, requires lending to stricken borrowers 'whenever the security is good', as Bagehot put it. The IMF has had to invent its own form of collateral, and conditionality is the result. The problem, though, is that belt-tightening is a completely inappropriate approach to managing the current crisis.

Countries are stricken not because they have indulged in any irresponsible spending sprees that led to a shortage of foreign exchange, but because of a virus beyond their control. Indeed, it would seem almost grotesque for the Fund to ask countries to cut spending at a time when, if anything, more spending is needed to stop people dying or from falling into a permanent trap of unemployment.

The obvious solution to this problem would be to increase the amount of money that any country can access from the Fund’s emergency facilities well beyond the $100bn now available. But that kind of solution would quickly run up against the IMF’s collateral problem.

The more the IMF makes available as 'true' emergency financing with few or no strings attached, the more it begins to undermine the quality of its loan portfolio. And if the IMF’s senior creditor status is undermined, then an important building block of the international monetary system would be at risk.

One way out of this might have been an emergency allocation of Special Drawing Rights, a tool last used in 2009. This would credit member countries’ accounts with new, unconditional liquidity that could be exchanged for the five currencies that underpin the SDR: the dollar, the yen, the euro, sterling and the renminbi. That will not be happening, though, since the US is firmly opposed, for reasons bad and good.

So in the end the IMF and its shareholders face a huge problem. It either lends more money on easy terms without the 'collateral' of conditionality, at the expense of undermining its own balance sheet - or it remains, in systemic terms, on the sidelines of this crisis.

And since the legacy of this crisis will be some eye-watering increases in the public debt burdens of many emerging economies, the IMF’s struggle to find a way to administer its medicine will certainly outlive this round of the coronavirus outbreak.

This article is a version of a piece which was originally published in the Financial Times

A shaky truce remains broadly in place among rival Libyan forces fighting for control of Tripoli. However, a durable ceasefire to bring an end to the current bout of conflict, which was initiated by Khalifa Haftar’s Libyan Arab Armed Forces’ (LAAF) offensive on the capital in April 2019, has not been reached. In recent weeks attention has focused on talks hosted in Moscow and Berlin, with the former aimed at agreeing a ceasefire and the latter seeking to reach agreement among international actors to bring an end to external military support for Libyan warring actors, and to craft a way forward for future intra-Libyan talks. Yet, there has been little emphasis on Libyan actors – beyond Haftar and prime minister Fayez al-Serraj – in this process.
 
This roundtable will bring together experts and policymakers to discuss means of de-escalating the conflict and seeking a lasting resolution through the development of interconnected intra-Libyan social and security negotiation tracks. Mr Usama Otman Essed of the Libya Center for Strategic and Future Studies (LCSFS) will present his research group’s ideas on these issues and discuss their ongoing efforts to promote dialogue among social and security actors.

Attendance at this event is by invitation only. 

Since the overthrow of the regime of Muammar Gaddafi in 2011, Libya’s multitude of armed groups have followed a range of paths. While many of these have gradually demobilized, others have remained active, and others have expanded their influence. In the west and south of the country,  armed groups have used their state affiliation to co-opt the state and professionals from the state security apparatus into their ranks.

In the east, the Libyan Arab Armed Forces projects a nationalist narrative yet is ultimately subservient to its leader, Field Marshal Khalifa Haftar. Prevailing policy narratives presuppose that the interests of armed actors are distinct from those of the communities they claim to represent. Given the degree to which most armed groups are embedded in local society, however, successful engagement will need to address the fears, grievances and desires of the surrounding communities, even while the development of armed groups’ capacities dilutes their accountability to those communities.

This roundtable will discuss the findings of a forthcoming Chatham House research paper, ‘The Development of Libyan Armed Groups Since 2014: Community Dynamics and Economic Interests’, which presents insights from over 200 interviews of armed actors and members of local communities and posits how international policymakers might seek to curtail the continued expansion of the conflict economy.

PLEASE NOTE THIS EVENT IS POSTPONED UNTIL FURTHER NOTICE.

Summary

• Libya’s multitude of armed groups have followed a range of paths since the emergence of a national governance split in 2014. Many have gradually demobilized, others have remained active, and others have expanded their influence. However, the evolution of the Libyan security sector in this period remains relatively understudied. Prior to 2011, Libya’s internal sovereignty – including the monopoly on force and sole agency in international relations – had been personally vested in the figure of Muammar Gaddafi. After his death, these elements of sovereignty reverted to local communities, which created armed organizations to fill that central gap. National military and intelligence institutions that were intended to protect the Libyan state have remained weak, with their coherence undermined further by the post-2014 governance crisis and ongoing conflict. As a result, the most effective armed groups have remained localized in nature; the exception is the Libyan Arab Armed Forces (LAAF), which has combined and amalgamated locally legitimate forces under a central command.
• In the west and south of the country, the result of these trends resembles a kind of inversion of security sector reform (SSR) and disarmament, demobilization and reintegration (DDR): the armed groups have used their state affiliation to co-opt the state and professionals from the state security apparatus into their ranks; and have continued to arm, mobilize and integrate themselves into the state’s security apparatus without becoming subservient to it. In the eastern region, the LAAF projects a nationalist narrative yet is ultimately subservient to its leader, Field Marshal Khalifa Haftar. The LAAF has co-opted social organizations to dominate political and economic decision-making.
• The LAAF has established a monopoly over the control of heavy weapons and the flow of arms in eastern Libya, and has built alliances with armed groups in the east. Armed groups in the south have been persuaded to join the LAAF’s newly established command structure. The LAAF’s offensive on the capital, which started in April 2019, represents a serious challenge to armed groups aligned with the Tripoli-based Government of National Accord (GNA). The fallout from the war will be a challenge to the GNA or any future government, as groups taking part in the war will expect to be rewarded. SSR is thus crucial in the short term: if the GNA offers financial and technical expertise and resources, plus legal cover, to armed groups under its leadership, it will increase the incentive for armed groups to be receptive to its plans for reform.
• Prevailing policy narratives presuppose that the interests of armed actors are distinct from those of the communities they claim to represent. Given the degree to which most armed groups are embedded in local society, however, successful engagement will necessarily rely on addressing the fears, grievances and desires of the surrounding communities. Yet the development of armed groups’ capacities, along with their increasing access to autonomous means of generating revenue, has steadily diluted their accountability to local communities. This process is likely to be accelerated by the ongoing violence around Tripoli.
• Communities’ relationship to armed groups varies across different areas of the country, reflecting the social, political, economic and security environment:
• Despite their clear preference for a more formal, state-controlled security sector, Tripoli’s residents broadly accept the need for    the presence of armed groups to provide security. The known engagement of the capital’s four main armed groups in criminal activity is a trade-off that many residents seem able to tolerate, providing that overt violence remains low. Nonetheless, there is a widespread view that the greed of Tripoli’s armed groups has played a role in stoking the current conflict.
• In the east, many residents appear to accept (or even welcome) the LAAF’s expansion beyond the security realm, provided that it undertakes these roles effectively. That said, such is the extent of LAAF control that opposition to the alliance comes at a high price.
• In the south, armed groups draw heavily on social legitimacy, acting as guardians of tribal zones of influence and defenders of their respective communities against outside threats, while also at times stoking local conflicts. Social protections continue to hold sway, meaning that accountability within communities is also limited.
• To varying extents since 2014, Libya’s armed groups have developed networks that enmesh political and business stakeholders in revenue-generation models:
• Armed groups in Tripoli have compensated for reduced financial receipts from state budgets by cultivating unofficial and illicit sources of income. They have also focused on infiltrating state institutions to ensure access to state budgets and contracts dispersed in the capital.
• In the east of the country, the LAAF has developed a long-term strategy to dominate the security, political and economic spheres through the establishment of a quasi-legal basis for receiving funds from Libya’s rival state authorities. It has supplemented this with extensive intervention in the private sector. External patronage supports military operations, but also helps to keep this financial system, based on unsecured debt, afloat.
• In the south, limited access to funds from the central state has spurred armed groups to become actively involved in the economy. This has translated into the taxation of movement and the imposition of protection fees, particularly on informal (and often illicit) activity.
• Without real commitment from international policymakers to enforcing the arms embargo and protecting the economy from being weaponized, Libya will be consigned to sustained conflict, further fragmentation and potential economic collapse. Given the likely absence of a political settlement in the short term, international policymakers should seek to curtail the continued expansion of the conflict economy by reducing armed groups’ engagement in economic life.
• In order to reduce illicit activities, international policymakers should develop their capacity to identify and target chokepoints along illicit supply chains, with a focus on restraining activities and actors in closest proximity to violence. Targeted sanctions against rent maximizers (both armed and unarmed) is likely to be the most effective strategy. More effective investigation and restraint of conflict economy actors will require systemic efforts to improve transparency and enhance the institutional capacity of anti-corruption authorities. International policymakers should also support the development of tailored alternative livelihoods that render conflict economy activities less attractive.

At this webinar, part of the Chatham House MENA Programme Online Event Series, experts will explore how the coronavirus pandemic is impacting the economy, state-society relations and healthcare throughout the Middle East and North Africa. How are governments handling this crisis and what measures have they put in place to stop the spread of the virus? Why are some governments withholding information about the number of cases? What has the response from the public been so far? How is this affecting the region and how does it compare to the global picture?

The event will be held on the record.

Ever since independence, the Moroccan monarchy has used political parties to legitimize the country’s authoritarian political process and structure, and to absorb social and political anger. The palace puts successive governments and other elected institutions, such as local and regional councils, at the frontline of public blame, and replaces them once they fail this function.

In a recent article, MENA Programme Associate Fellow, Mohammed Masbah, examines how the Moroccan monarchy has used this strategy with the ruling Justice and Development Party (PJD) so that the palace remains the centre of political power, while the PJD – and other political parties before it– takes responsibility for coping with the mounting socio-economic crisis.

In this webinar, part of the Chatham House project on The Future of the State in the Middle East and North Africa, the article’s author will discuss the risks this approach presents for the long-term stability of Morocco and what reforms are needed to increase citizens’ dwindling confidence in the political process.

You can express your interest in attending by following this link. You will receive a Zoom confirmation email should your registration be successful.

Yemen suffered from the excessive control of the central government prior to the current conflict. Federalism has been put forward by many Yemeni political parties since the National Dialogue Conference (NDC) as the supposed magic cure for this significant problem. Today, Yemen is more fragmented than ever, its state central institutions have been scattered and lack leadership and the state has lost most of its sovereignty. The prevailing narrative that decentralization through federalism is Yemen’s inevitable path post-conflict often fails to acknowledge that there are prerequisites for effective local governance, beyond political will.  

In a recent article, Osamah Al Rawhani addressed how the weakness of central state institutions is the key challenge to proceeding with federalism in Yemen and highlighted prerequisites and contextual factors that need to be addressed before reforming the structure of the state. He argued that the viability of decentralization relies on the presence of a functioning, representative central government that is capable of devolving power but also able to keep the state from further fragmentation. 

In this webinar, part of the Chatham House project on The Future of the State in the Middle East and North Africa, the article’s author will discuss recent developments in Yemen, where shifting frontlines and regional divisions are fragmenting the country in new ways. The speaker will explore alternative approaches to pursue the path of federalism that recognize the current realities and the critical need for strong central institutions. He will also survey the internal and external factors that must be considered to rebuild a stable state in Yemen.

You can express your interest in attending by following this link. You will receive a Zoom confirmation email should your registration be successful. Alternatively, you can watch the event live on the MENA Programme Facebook page.

Neither Cameroon nor Malaysia has made progress in tackling illegal logging since 2010, according to new reports from Chatham House. Corruption, lack of political will and a lack of transparency pose problems in both countries. 

Illegal logging is much more widespread in Cameroon, where entrenched corruption, weak institutions and unclear and inappropriate laws are all impeding reform. Although Malaysia does not have such high levels of illegality, problems remain, particularly in the state of Sarawak.

Alison Hoare, Senior Research Fellow at Chatham House, said: 'Illegal logging has a devastating impact on some of the world’s most valuable remaining forests and on the people who live in them and rely on the resources they provide.'

'It is disappointing how little progress Cameroon and Malaysia have made in tackling illegal logging, which exacerbates deforestation, climate change, and poverty. In both countries corruption is a major issue, and the governments need to do much more to address the problem and its underlying drivers.' 

In Cameroon, the principle of transparency has not been accepted within the government, enforcement is weak and information management systems are inadequate. The misuse of  small permits, often granted to allow clearance of forests for infrastructure projects or agricultural expansion, is particularly problematic and could be increasing.

Meanwhile, a huge amount of illegal production takes place in the informal artisanal sector – accounting for around half of all timber produced in the country. Artisanal loggers mainly supply the domestic market, but their timber is also exported.

In Malaysia, governance varies significantly from region to region but there are high levels of deforestation across the country. Expansion of timber, pulp and agricultural plantations is the primary cause of forest loss, with the area of plantations expected to double by 2020. 

Adequate recognition of indigenous peoples’ land rights is also a serious challenge in Malaysia and has held up the negotiation of a Voluntary Partnership Agreement with the European Union. Recent enhanced efforts to tackle corruption, including in Sarawak, could mark a turning point. 

Alison Hoare: 'In both countries, more concerted efforts are needed to tackle corruption, increase consultation, and improve transparency and availability of information. The Cameroonian government also needs to pay more attention to the informal sector and the domestic market.'

Médecins Sans Frontières (MSF) has been awarded the Chatham House Prize 2015.

The Chatham House Prize is presented annually to the person or organization deemed by members of the Royal Institute of International Affairs to have made the most significant contribution to the improvement of international relations in the previous year.

This year, members voted for MSF in recognition of its work in combating the 2014 Ebola outbreak in West Africa. MSF was among the first groups to respond to the epidemic in March of that year and remained engaged on the ground throughout the crisis, caring for the majority of patients in Liberia, Guinea and Sierra Leone. MSF leaders and staff were persistent and forceful in their action to halt the spread of the epidemic and, as a result, were instrumental in saving thousands of lives. 

Dr Joanne Liu, MSF’s international president, will represent MSF at the Chatham House Prize award ceremony in London where she will be presented with a crystal award and a scroll, signed by Her Majesty The Queen, patron of the institute. Previous recipients of the Prize include former president Lula of Brazil, Burmese democracy campaigner Aung San Suu Kyi, former US secretary of state Hillary Clinton, and Melinda Gates, co-founder of the Bill and Melinda Gates Foundation.

Dr Robin Niblett CMG, director of Chatham House, said: 

'I warmly congratulate Médecins Sans Frontières on being voted the recipient of this year's Chatham House Prize. This is the first time an organization has been awarded the Prize and I am delighted that their vital work has been recognized in this way. MSF led the fight against Ebola by sounding an early alarm on its dangers. It put into place a highly effective operation that saved thousands of lives, and helped prevent a more wide-spread catastrophe, risking and, in some cases, losing the lives of its own staff.'

Dr Joanne Liu, international president of MSF said:

'I am honoured that MSF will be the recipient of this year’s Chatham House Prize and I look forward to accepting this award on behalf of the thousands of people who worked in the Ebola outbreak. This includes the doctors, nurses and logisticians who volunteered from around the world, and the thousands more national staff in Guinea, Liberia, Mali, Nigeria and Sierra Leone who made our work possible. Knowing that they did this while coping with the fear of Ebola in their communities and in the face of incredible stigma makes their contribution even more remarkable. While we continue to work on the ground, our focus is also trying to ensure that next time there is an outbreak, that patients get the care and treatment they need, on time, before it spreads and turns into a killer epidemic. But we all still have a long way to go and it is important that we work together to respond to these challenges and opportunities.'

Members Event

Chatham House Prize 2015: In Conversation with Dr Joanne Liu of Médecins Sans Frontières
13 October 2015 - 17:00 - 18:00

Sponsors

Chatham House gratefully acknowledges the support of our lead sponsor Royal Dutch Shell, and other sponsors AIG, BHP Billiton, Chevron and DTCC.

Nominees

There were three other nominees for the Chatham House Prize 2015:

• Mahamadou Issoufou, President, Republic of Niger (2011-) 
• Juan Manuel Santos, President, Republic of Colombia (2010-)
• Angela Merkel, Chancellor, Federal Republic of Germany (2005-)

About the Chatham House Prize

The annual Chatham House Prize, launched in 2005, is awarded to the person or organization that is deemed by Chatham House members to have made the most significant contribution to the improvement of international relations in the previous year.

The selection process draws on the expertise of Chatham House's research teams and three presidents, who nominate candidates. Our members are then invited to vote for the winner in a ballot.

Further information about the Chatham House Prize

Fifteen years ago it would be unthinkable for cyber security to top the list of priorities at the annual US-China Security and Economic Dialogue, as it did last week. But, in the intervening years, cyber technologies and the internet have become fundamental tools for everything from running critical infrastructure such as energy grids and satellite systems, to political, economic and social interactions. Given the pace of change, it should not surprise us that we have barely started to understand how to govern this new order and manage the global internet in ways that both empower and protect us.

In response, Chatham House and Routledge (part of the Taylor & Francis Group) are launching the Journal of Cyber Policy, addressing a rapidly changing situation and connecting creative, technical and policy experts.

Informing the growing security challenges of an interconnected digital world, this new peer-reviewed journal will provide a valuable resource to decision-makers in the public and private sectors grappling with the challenges of cyber security, online privacy, surveillance and internet access. The journal will offer informed and rigorous thinking, supported by the journal’s internationally renowned editorial board.

'The Journal of Cyber Policy will empower experts with new thinking and diverse ideas delivered in a way which is practically relevant as well as academically rigorous,' Dr Patricia Lewis, research director, International Security Department at Chatham House and co-editor of the journal, said. 'It will change the game for those working on cyber issues.' 

'As the preferred publisher for think tanks around the world, we are proud to be Chatham House’s partner on this new journal, which seeks to address issues that touch upon all our lives on a daily basis,' said Leon Heward-Mills, Global Publishing Director (Journals) at Taylor & Francis Group.

The Journal of Cyber Policy launches on the evening of 2 July at a reception at Chatham House.

The Russian annexation of Crimea was one of the great strategic shocks of the past twenty-five years. For many in the West, Moscow’s actions in early 2014 marked the end of illusions about cooperation, and the return to geopolitical and ideological confrontation. Russia, for so long a peripheral presence, had become the central actor in a new global drama. In this groundbreaking book, renowned scholar Bobo Lo analyses the broader context of the crisis by examining the interplay between Russian foreign policy and an increasingly anarchic international environment. He argues that Moscow’s approach to regional and global affairs reflects the tension between two very different worlds—the perceptual and the actual.

The Kremlin highlights the decline of the West, a resurgent Russia, and the emergence of a new multipolar order. But this idealized view is contradicted by a world disorder that challenges core assumptions about the dominance of great powers and the utility of military might. Its lesson is that only those states that embrace change will prosper in the twenty-first century.

A Russia able to redefine itself as a modern power would exert a critical influence in many areas of international politics. But a Russia that rests on an outdated sense of entitlement may end up instead as one of the principal casualties of global transformation.

Praise for Russia and the New World Disorder

'Once again, Bobo Lo has written an illuminating book on Russia's foreign policy. He has achieved a real 'tour de force' in both conceptual and descriptive terms. With elegance and precision, Lo has explained why Russia, as a declining power, is still so important for international stability, crisis management, and global issues. A must-read for now, and certainly a classic book for the next decade.'
—Dr Thomas Gomart, Director of the French Institute of International Relations (IFRI), Paris

'Bobo Lo offers a trenchant analysis of the challenges and choices that confront Russia in today's rapidly changing global environment. In his compelling discussion of the Kremlin's Hobbesian view of the international system, he asks whether Russia is capable of jettisoning its imperial mindset and becoming a modern nation-state capable of interacting more effectively both with its neighbors and the wider world. His answer is sobering--and sometimes surprising.'
—Angela Stent, Director, Center for Eurasian, Russian and East European Studies (CERES), Georgetown University, and author of The Limits of Partnership: US-Russian Relations in the Twenty-First Century.

'Bobo Lo's new book is elegantly written and has a masterful grasp of the pressures and temptations that have acted on Putin in foreign and security policy. He puts us all in his debt.'
—Robert Service, Fellow of the British Academy, and Emeritus Fellow, St Antony's College, University of Oxford

It is now clear that President Putin’s ‘new model Russia’ cannot be constructively accommodated into the international system. The war in Ukraine, in part the result of the West's laissez-faire approach to Russia, demonstrates the need for a new Western strategy towards Russia.

The Russian Challenge - a major new report by six authors from the Russia and Eurasia Programme at Chatham House - argues that a new strategy must recognise that:                  

• The decline of the Russian economy, the costs of confrontation and the rise of China mean that the Putin regime is now facing the most serious challenge of its 15 years in power.  The West has neither the wish nor the means to promote regime change in Russia. But Western countries need to consider the possible consequences of a chaotic end to the Putin system.             
• A critical element in the new geo-economic competition between the West and Russia is the extent of Western support for Ukraine, whose reconstruction as an effective sovereign state, capable of standing up for itself, is crucial. This will require much greater resources than have been invested up until now.                  
• Russia has rapidly developed its armed forces and information warfare capabilities since the war in Georgia in 2008. The West must invest in defensive strategic communications and media support to counter the Kremlin’s false narratives and restore its conventional deterrent capabilities as a matter of urgency. In particular, NATO needs to demonstrate that the response to ‘ambiguous’ or ‘hybrid’ war will be robust.                  
• Sanctions are exerting economic pressure on the Russian leadership and should remain in place until Ukraine’s territorial integrity is properly restored. In particular, it is self-defeating to link the lifting of sanctions solely to implementation of the poorly crafted and inherently fragile Minsk accords.                  
• While deterrence and constraint are essential in the short term, the West must also prepare for an eventual change of leadership in Russia. There is a reasonable chance that current pressures will incline a future Russian leadership to want to re-engage with the West.

James Nixey, Head of the Russia and Eurasia Programme at Chatham House, said:  

'Pursuing these goals and achieving these objectives will ensure that the West is better prepared for any further deterioration in relations with Russia. The events of the last 18 months have demonstrated conclusively that when dealing with Russia, optimism is not a strategy.'

Eliza Manningham-Buller is confirmed as a president of Chatham House replacing Paddy Ashdown who steps down after 10 years.

The appointment of Baroness Manningham-Buller as a president of Chatham House was confirmed at the institute’s annual general meeting on Tuesday 21 July. Baroness Manningham-Buller joins Sir John Major and Baroness Scotland of Asthal as a co-president and succeeds Lord Ashdown of Norton-sub-Hamdon who has stepped down from the role after two terms.

Eliza Manningham-Buller was director-general of the UK Security Service (MI5) between 2002 and 2007 and became an independent life peer in 2008. She served as Chairman of Imperial College London from 2011 to 2015. She brings to Chatham House an extensive knowledge of and experience in international security as well as a deep interest in medical research and global health, having served as a member of the Board of Governors of the Wellcome Trust since 2008. In October 2015, Baroness Mannigham-Buller will become Chairman of the Trust’s Board of Governors.

Paddy Ashdown steps down after serving as a president for 10 years alongside Sir John Major, Patricia Scotland and their predecessors Lord Hurd of Westwell and Lord Robertson of Port Ellen, respectively. Over that period, the institute benefitted enormously from his extensive experience in international politics and conflict resolution, including as High Representative for Bosnia and Herzegovina from 2002 to 2006.

Dr Robin Niblett, director of Chatham House, said:

'I am delighted to welcome Elizabeth Manningham-Buller as a president of Chatham House. Throughout her career, she has brought deep knowledge, careful analysis and sound judgement to bear upon some of the most difficult dimensions of public policy. The institute will benefit greatly from these qualities as it draws on her engagement with Chatham House over the coming years.

I would like to pay tribute to Paddy Ashdown for his long-standing support of Chatham House. His contributions to our substantive debates, both internally and externally, have been invaluable on numerous occasions, and we look forward to his continued involvement with the institute as a member of our Panel of Senior Advisers.'

Baroness Manningham-Buller said:

“I am delighted to be elected as a Chatham House president at this important time in the institute’s history, as it grapples with a complex and inter-connected agenda of policy challenges. I look forward to working with John Major and Patricia Scotland in supporting Chatham House and its valuable and necessary work.

The global health system has contributed significantly to improved health and life expectancy in recent decades. However, the existing architecture needs to be reformed in order to address future challenges and meet the health targets in the Sustainable Development Goals. Rethinking the Global Health System, a new Chatham House report, analyses how fit for purpose the current system is and identifies priority areas for reform. 

The Ebola crisis has shown that weak systems make individual countries more vulnerable and that strong, resilient and equitable systems at country level are needed to protect global health security. There is a pressing need for enhanced global disease surveillance and detection capacity, as well as improved international coordination in responding to emerging health threats.

In addition, addressing determinants of health outside the health sector requires cross-sectoral collaboration and linkages to other policy domains. Historically, the focus has rested on directly reducing illness and death, but the need to address other influences on health outcomes – safe drinking water, proper sewage treatment, good education – is now well recognized.

The report says that stronger leadership in global health is therefore required and the report lends support to calls for the creation of a new organization that would bring together United Nations agencies with health-related mandates – UN-HEALTH. Just as UNAIDS created a more coherent response for HIV, a UN-HEALTH organization could achieve a similar but more wide-reaching effect by bringing together and streamlining all UN agencies working on global health issues.

Professor David Harper, who led the Chatham House project that resulted in the report, said: 

'This report is intended to make a substantial contribution to the international debate on what the world will require of the health architecture of the future. It offers some options for political leaders to consider, but it is just a starting point. More work is urgently needed to develop the ideas introduced in this project and to help generate the high-level political traction that is so vital in any change process.'

The risk of a serious cyber attack on civil nuclear infrastructure is growing, as facilities become ever more reliant on digital systems and make increasing use of commercial ‘off-the-shelf’ software, according to a major new report from Chatham House.

Cyber Security at Civil Nuclear Facilities: Understanding the Risks is the result of an 18-month study that draws on in-depth interviews with 30 leading industry practitioners based in more than eight countries. It found that the trend to digitization, when combined with a lack of executive-level awareness of the risks involved, means that nuclear plant personnel may not realize the full extent of their cyber vulnerability and are thus inadequately prepared to deal with potential attacks. 

Specific findings include:                

• The conventional belief that all nuclear facilities are ‘air gapped’ (isolated from the public internet) is a myth. The commercial benefits of internet connectivity mean that a number of nuclear facilities now have VPN connections installed, which facility operators are sometimes unaware of.
• Search engines can readily identify critical infrastructure components with such connections.
• Even where facilities are air gapped, this safeguard can be breached with nothing more than a flash drive.
• Supply chain vulnerabilities mean that equipment used at a nuclear facility risks compromise at any stage.
• A lack of training, combined with communication breakdowns between engineers and security personnel, means that nuclear plant personnel often lack an understanding of key cyber security procedures.
• Reactive rather than proactive approaches to cyber security contribute to the possibility that a nuclear facility might not know of a cyber attack until it is already substantially under way.

In the light of these risks, the report outlines a blend of policy and technical measures that will be required to counter the threats and meet the challenges. 

Recommendations include:

• Developing guidelines to measure cyber security risk in the nuclear industry, including an integrated risk assessment that takes both security and safety measures into account.
• Engaging in robust dialogue with engineers and contractors to raise awareness of the cyber security risk, including the dangers of setting up unauthorized internet connections.
• Implementing rules, where not already in place, to promote good IT hygiene in nuclear facilities (for example to forbid the use of personal devices) and enforcing rules where they do exist.
• Improving disclosure by encouraging anonymous information sharing and the establishment of industrial CERTs (Computer Emergency Response Team).
• Encouraging universal adoption of regulatory standards.

Revenues for pharmaceutical companies need to be 'delinked' from sales of antibiotics to avoid their over-use and avert a public health crisis, says a new report from the think-tank Chatham House.

Over-use of antibiotics is contributing to the growing resistance of potentially deadly bacteria to existing drugs, threatening a public health crisis in the near future. The report notes that, by 2050, failing to tackle antibiotic resistance could result in 10 million premature deaths per year.                                       

Novel antibiotics to combat resistant pathogens are thus desperately needed, but market incentives are exacerbating the problem. Towards a New Global Business Model for Antibiotics: Delinking Revenues from Sales states that,                                       

'The current business model requires high levels of antibiotic use in order to recover the costs of R&D. But mitigating the spread of resistance demands just the opposite: restrictions on the use of antibiotics.'

To tackle this catch-22 problem, the Centre on Global Health Security at Chatham House recommends the establishment of a global body to implement a radical new business model for the industry, which would encourage investment and promote global access to - and conservation of - antibiotics.      

The current business model has several perverse effects. As R&D is an inherently risky and costly endeavour, the industry is chronically under-investing in new treatments. Today, few large pharmaceutical companies retain active antibacterial drug discovery programmes. Re-stoking the industry's interest in antibiotics would be one of the primary roles of the new body.   

Secondly, the need to recover sunk cost under the current business model encourages both high prices and over-marketing of successful drugs, making potentially life-saving treatments unaffordable to many in developing countries, while simultaneously encouraging over-use in developed markets and increasing resistance.   

The new global body would address these challenges by ‘delinking’ pharmaceutical revenues from sales of antibiotics. It would do this by directly financing the research and development of new drugs, which it would then acquire at a price based on production costs rather than the recovery of R&D expenses. Acquisition could take the form of procurement contracts with companies, the purchase of full IP rights or other licensing mechanisms.                                       

This would enable it to promote global access to antibiotics while simultaneously restricting over-use. Conservation would be promoted through education, regulation and good clinical practice, with the report recommending that 'proven conservation methods such as antibiotic stewardship programmes… be incentivized and implemented immediately.'

Priorities for R&D financing would be based on a comprehensive assessment of  threats arising from resistance. Antibiotics would qualify for the highest level of financial incentives if they combat resistant pathogens posing a serious threat to human health.                                       

Finance for the new body would come from individual nation states, with the report noting that this could 'begin with a core group of countries with significant research activity and large antibiotic markets, (though) it is envisaged that all high income countries should make an appropriate financial contribution.'                                 

It is not yet clear exactly how much funding would be necessary to combat resistance, but with inaction expected to cost $100 trillion in cumulative economic damage, the report argues that 'an additional global investment of up to $3.5 billion a year (about 10 per cent of the current value of global sales of antibiotics) would be a bargain.'

About 90 per cent of refugees living in camps have no access to electricity and many lack any form of lighting at night, says a Chatham House report for the Moving Energy Initiative. Energy poverty in refugee settlements is not on the radar of international initiatives and humanitarian agencies are ill-equipped to deal with the scale of need. 

Heat Light and Power for Refugees: Saving Lives, Reducing Costs zooms in on the energy needs of refugees and displaced people worldwide, and presents the first ever estimates of the volume and costs of what they use.

'The problem goes beyond electricity. 80 per cent of those in camps rely on firewood for cooking and, as a result, we estimate that some 20,000 people die prematurely each year due to the pollution from indoor fires. Exposure to extremes of cold and heat are also killers for people living in flimsy, temporary shelter,' says Glada Lahn, senior research fellow at Chatham House. 'The current lack of provision for energy undermines the fundamental aims of humanitarian assistance,' she adds.

There are nearly 60 million forcibly displaced people in the world, and they pay staggering costs for energy. The 83,277 households living in Dadaab in Kenya, the world’s largest refugee settlement, spent an estimated $6.2 million on firewood last year, which accounts for approximately 24 per cent of their overall household income. (The average UK household spent 4 per cent of its income on energy in 2011.) In Uganda, almost half of refugee households surveyed by the UNHCR skip meals because they do not have enough fuel to cook with.

'The imperative is to find humane, creative and cost-effective ways to respond to the needs of so many individuals, most of whom are women and children.  Improving access to clean, safe and sustainable energy offers a promising way forward,' says Kofi Annan in the report’s foreword.

The report calls for an overhaul in the way that heat, light and power are delivered in humanitarian crises. It makes the case for new partnerships between humanitarian agencies and private providers to increase clean energy access in refugee settlements. Investment in energy infrastructure will also benefit host communities in some of the world’s poorest countries.

'As refugee households spend approximately $2.1 billion on energy each year, developing local markets for energy services could be part of a mix of solutions,' adds Lahn. 'Using green, culturally appropriate technologies could save lives, reduce CO2 emissions by 11 million tonnes per year and radically improve living standards. Introducing even the most basic solutions, such as improved cookstoves and basic solar lanterns, could save $323 million a year in fuel costs.' 

Other findings include:

• Rape and violence against women is common in many unlit camps. Only 4 per cent of women and girls in households in the Goudoubo camp in Burkina Faso would go out after dark due to the lack of streetlights.
• Wood equalling around 49,000 football pitches worth of forest (64,700 acres) is burned by displaced families living in camps each year, mainly in countries suffering severe deforestation, because they have no alternative sources of energy.
• Firewood consumption emits nearly twice as much CO2 as liquid petroleum gas and produces little energy in comparison to its carbon intensity.

International Development Minister Grant Shapps said:

‘Across sub-Saharan Africa, hundreds of millions of people still do not have access to electricity. Women and girls are at risk of violence after dark, families are forced to inhale toxic kerosene fumes, and energy remains unaffordable for many.

‘With the technology in place and investors coming on board, the time to act is now. The UK's Energy Africa campaign is already kick-starting a solar revolution across the continent.

‘Supporting the Moving Energy Initiative is another way Britain can help boost access to clean, reliable and affordable energy. This will transform people’s lives and help achieve the UN’s goal of universal energy access by 2030.’

Nigeria’s booming informal trade is costly for society, business and government, yet a critical opportunity exists to formalize such trade and drive more sustainable and less volatile growth, argues a new report from Chatham House.

According to one estimate, informal activity accounts for up to 64 per cent of Nigeria’s GDP. Nigeria's Booming Borders: The Drivers and Consequences of Unrecorded Trade finds that this is a result of obstacles that impede trading through formal channels. These drivers include bureaucratic burdens and other factors, such as:

• The need for Nigerian businesses to produce at least nine documents in order to send an export shipment and at least 13 in order to bring in an import consignment.
• Rigid and dysfunctional foreign-exchange regulations that push most smaller traders into the incompletely regulated parallel exchange market.
• Corruption and unofficial ‘taxation’, especially on major border highways, which delegitimize formal channels and encourage the use of smuggling routes.

As a result, the state loses direct tax revenues that would be generated by formal cross-border trade. This is not just siphoned into the informal economy; some is lost entirely. For example, many shippers opt to dock in neighbouring countries rather than deal with the expense and difficulty of using Nigeria’s ports.

Informal trade also undermines the social contract between the private sector and government. The state lacks tax revenues to pay its officials, improve infrastructure or implement reforms, while traders feel the government provides no services in return for any taxes they might pay.

‘Every day tens of thousands of unofficial payments are made, none destined for the government. Policy-makers need to create an environment that encourages trade to flow through formal channels and capture lost revenue’, says co-author Leena Koni Hoffmann.

‘Formalization would assist Nigeria to pursue more high-quality, high-tech economic activity at a time when rising labour costs in Asia are creating scope for Nigerian manufacturers to compete’, she adds.

The report makes a number of recommendations for how Nigeria could encourage more formal trade, including:

• Strengthening the resources and capacity of the Federal Ministry of Industry, Trade and Investment to coordinate action across key government ministries, departments and agencies, as well as public and private stakeholders.
• Prioritizing engagement in the development of Economic Community of West African States (ECOWAS) trade policies and fully implementing the ECOWAS Protocol on Free Movement of Persons to reduce harassment at borders.
• Allowing banks to operate simple services for small and medium-sized businesses to make trade payments directly from Nigerian naira to CFA francs and vice versa.
• Improving basic facilities that support traders, including improving the efficiency of border posts, installing truck parks and all-weather surfacing on market access roads, and introducing online booking for trucks to enter ports.
• Separating responsibilities for assessing duty and tariff liabilities from revenue collection in order to reduce opportunities for corruption, an approach already tested with success by the Lagos State Internal Revenue Service.
• Increasing funding and technical support for the National Bureau of Statistics, which has a significant role to play in measuring and capturing more of Nigeria’s external trade.

Interviews conducted for the report reveal that business people would welcome the opportunity to pay taxes, but only if they received assurance that these payments would represent a contract with government guaranteeing that conditions for business would be improved.

‘As Africa’s largest economy, formalizing external trade would allow Nigeria to fulfil its potential as the trading engine of the West and Central African economy and shape the business landscape across the region,’ says co-author Paul Melly.

Chatham House has been named Prospect magazine’s Think-Tank of the Year at a ceremony in the Houses of Parliament. The institute was also the winner in the UK categories for International Affairs and Energy and Environment. The quality, credibility and impact of Chatham House’s research was acknowledged for helping to create better understanding of key global phenomena at this critical time in world affairs. The judges commented that the institute’s work is ‘reliably excellent’ and a ‘gold standard of knowledge and professionalism’.  

Specifically, the US and the Americas and Asia programmes’ joint report Asia-Pacific Power Balance: Beyond the US-China Narrative, by Xenia Wickett, John Nilsson-Wright and Tim Summers, was singled out for being an important resource to help explain the developing geopolitical relationship between the United States and China.

The Energy, Environment and Resources department’s livestock project was a major factor in their award in the Energy & Environment UK category, including the report Changing Climate, Changing Diets: Pathways to Lower Meat Consumption by Laura Wellesley, Antony Froggatt and Catherine Happer, which developed recommendations for how dietary change can be effected in different national and cultural contexts.

Dr Robin Niblett, director of Chatham House said ‘The integrity and authority of Chatham House’s research is needed more than ever and I am extremely proud of our staff and their work particularly during this difficult and challenging year in world affairs’.

The ‘Cavaliere’ of the Order of ‘Stella d’Italia’ is presented to individuals who have made a positive contribution to Italy’s reputation abroad and who have fostered positive relations and cooperation with other countries and their ties with Italy.

Founded in 1947 to recognize civilian and military expatriates or non-Italians who made an outstanding contribution to Italy’s post-war reconstruction, the focus of this honour has now shifted to acknowledge individuals who have made specific contributions to Italy’s image and relationships overseas.

Dr Subacchi’s research and work at Chatham House was praised for its quality and rigour and for encouraging international dialogue. Dr Subacchi’s influence through her books, articles and media appearances were also noted for the impact they created, in particular in the context of the wider platform and reputation of Chatham House. 

Accepting the award from Vincenzo Celeste, Dr Subacchi said: ‘I am very proud to accept this award. In particular I would like to thank my family, friends and colleagues for their support, friendship and mentoring and I am delighted to share this honour with them.’

Adam Ward takes up the position of deputy director on 10 April 2017 and will join Chatham House from the International Institute of Strategic Studies (IISS) in London, where he has served as director of studies since 2009.

As deputy director, Adam will oversee and coordinate Chatham House's multiple areas of research, help manage the institute's relationships with key external constituencies, ensure the delivery of high-quality publications and deputize for the institute’s director, Dr Robin Niblett.

This is a new position, created after a period of sustained growth for Chatham House, especially in research and policy outputs. The appointment also coincides with the opening this spring of new working and meeting space for the institute in Ames House, the building adjacent to Chatham House on Duke of York Street in the St James's area of central London.

At IISS, publishers of the renowned annual Military Balance and other high-quality publications and organizers of influential annual security summits, including the Shangri-La Dialogue, Adam was responsible for the oversight of its worldwide research activities, which are also conducted from IISS offices in the Middle East, Asia and the US. Adam led the establishment of the office in Washington and was previously a senior fellow for East Asia.

Dr Robin Niblett, director of Chatham House, said:‘I am delighted that Adam Ward will shortly be joining Chatham House. At a time of great uncertainty and risk in international affairs, his experience in leading research at the prestigious IISS and knowledge of how research institutes can develop and communicate their ideas on public policy will be of enormous value. His wide-ranging expertise on geopolitics and the foreign policies of China and the United States will also help the institute develop integrated projects that reflect the changing balance of world power. I very much look forward to working with him.’

Adam Ward said:‘I am excited to take up this opportunity to join Chatham House's executive leadership and to work with Robin Niblett and his senior management team. Chatham House has a well-deserved reputation for rigour and excellence in its research and for providing insights and solutions across a comprehensive range of international challenges. Chatham House's capacity for inter-disciplinary research is one of its distinctive strengths, and I look forward to ensuring its ideas are brought to bear on an ever more complex policy environment.’ 

The Chatham House Prize is presented annually to the person, persons or organization deemed by members of the Royal Institute of International Affairs to have made the most significant contribution to the improvement of international relations in the previous year.

This year, members of the institute voted for President Juan Manuel Santos in recognition of his role in formally ratifying a peace agreement with the FARC rebel group and bringing an end to the armed conflict in Colombia.

In 2016, after four years of negotiation, Juan Manuel Santos led the Colombian government in ratifying a peace agreement with the FARC. Success was by no means certain: after coming to a ceasefire and disarmament agreement in June, followed by a peace accord in September, Santos was forced to return to the drawing board with FARC negotiators after a referendum in October rejected the initial deal. But Santos persevered, drafting and signing a new deal that incorporated changes suggested by the No camp and was ratified by the Colombian congress on 24 November 2016.

The deal ended one of the world’s longest running armed conflicts, during which 220,000 people were killed and 6 million displaced. This was a complex, sensitive and intense process which required exceptional political diplomacy and perseverance. Ultimately, his determination and commitment to peace guided the main parties and international partners to one of the biggest successes in brokering peace in modern history.

Nominees

The nominees for the Chatham House Prize 2017 were:

• Charlotte Osei, Chairperson of the Electoral Commission of Ghana
• Juan Manuel Santos, President of Colombia
• Jens Stoltenberg, Secretary-General of NATO

Event

President Santos will be presented the award at an event in London on Thursday 9 November.

About the Chatham House Prize

The Chatham House Prize is presented to the person, persons or organization deemed by members of Chatham House to have made the most significant contribution to the improvement of international relations in the previous year.

The selection process is independent, democratic and draws on the deep knowledge of Chatham House's research teams, making the Prize a distinctive and unique award in the field of international affairs.

A short-list of nominees is selected by the institute's three presidents from a longer list submitted by the research programmes and departments in their areas of expertise. The recipient is then determined by Chatham House's broad membership base on a one-member, one-vote basis. The award is presented on behalf of the institute's patron, Her Majesty the Queen, representing the non-partisan and authoritative character of the Prize.

The Chatham House Prize was launched in 2005. Previous recipients of the Prize include Burmese democracy campaigner Aung San Suu Kyi, Médecins Sans Frontières, former US Secretary of State Hillary Clinton, and Melinda Gates, co-founder of the Bill and Melinda Gates Foundation.

For more information, please contact: 
Jenny Williams, Head of Media
Email: jwilliams@chathamhouse.org
Phone:  +44 (0) 207 314 3687 

The Academy was launched by Her Majesty the Queen in November 2014 to offer potential and established leaders from around the world the opportunity to spend ten months as Academy fellows and develop the tools needed to address the major policy challenges and critical issues facing the world today.

Academy fellows are drawn from government and the broader policy community, the private sector, media and civil society. During their time at the Academy, fellows deepen their understanding of critical issues, learn new skills, develop their networks and propose new ideas and solutions to complex policy challenges and opportunities.

Dr Leslie Vinjamuri, Dean, QEII Academy for Leadership in International Affairs says:

'Chatham House recognizes the need for inspirational and effective leadership in today’s complex and rapidly changing global environment. We remain absolutely committed to the mission of developing leadership skills and feel privileged to welcome the 2018-19 Academy Fellows. The Queen Elizabeth II Academy is uniquely well-positioned, drawing on the historical depth of expertise at Chatham House, our international and national networks, and the dynamism of London to develop skills, knowledge, and global insights that benefit emerging and accomplished leaders across diverse sectors in Europe, Africa, the Middle East, Asia and the Americas.'

Academy Fellows 2018/19

Rustam Anshba
Rustam’s research will explore the prospects for transforming the Georgian-Abkhaz conflict. He will be hosted by the Russia and Eurasia Programme. His fellowship is supported by the Robert Bosch Stiftung.

Rita Dayoub
Rita will analyse attacks against healthcare systems during conflicts in Syria and South Sudan. She will be hosted by the Centre on Global Health Security. Her fellowship is supported by the Asfari Foundation.

Isabel Dunstan
Isabel’s research will focus on digital literacy among women as a means to counter radicalization and intolerance in Indonesia. She will be hosted by the Asia-Pacific Programme. Her fellowship is supported by Mr Richard Hayden.

Sophia Ignatidou
Sophia will examine the political and security implications of Artificial Intelligence. She will be hosted by the International Security Department. Her fellowship is supported by the Stavros Niarchos Foundation.

Anna Korbut
Anna’s research will examine the current media landscape in Ukraine and its transformative potential. She will be hosted by the Russia and Eurasia Programme. Her fellowship is supported by the Robert Bosch Stiftung.

Damir Kurtagic
Damir will research the challenges and possibilities of private sector engagement in Sub-Saharan Africa. He will be hosted by the Africa Programme. His fellowship is supported by the Robert Bosch Stiftung.

Zaki Mehchy
Zaki will research the role and dynamics of non-state actors in Syria and their relationship with state institutions. He will be hosted by the Middle East and North Africa Programme. His fellowship is supported by the Asfari Foundation.

Anne Nyambane
Anne will examine the synergies and trade-offs involved in the implementation of the Sustainable Development Goals (SDGs). She will be hosted by the Energy, Environment and Resources Department. Her fellowship is supported by the Mo Ibrahim Foundation.

Masterclass
The Academy is also pleased to welcome three Masterclass participants from the European Bank for Reconstruction and Development.

The gift will create the Stavros Niarchos Foundation (SNF) Wing, enabling a permanent expansion of the institute’s research and providing a home to its Queen Elizabeth II Academy for Leadership in International Affairs. The wing will also house the ‘Chatham House SNF CoLab’, an initiative to open Chatham House’s policy research to wider public audiences.

The funds from the Stavros Niarchos Foundation (SNF) will be used to integrate a three-storey wing with the institute’s renowned building at 10 St James’s Square. The SNF Wing will support research collaboration and provide a stimulating environment to explore ways to engage people in the institute’s research, using interactive multimedia and other digital tools. Inauguration of the Chatham House SNF CoLab and the SNF Wing is anticipated in fall of 2019.

The gift from SNF is one of the largest in the institute’s history and is a major milestone in the foundation’s long-standing support of Chatham House, which dates back to 2007 and includes grants for research, infrastructure and student outreach totalling over £4.5m in the past 5 years.

Chairman of Chatham House, Lord Jim O’Neill said, 'This exceptional gift from SNF is a vote of confidence in the independence, quality and impact of the institute’s work. It will guarantee that the institute can innovate for the future, especially by engaging younger generations into its research and ideas, which is essential.'

Director of Chatham House Dr Robin Niblett said the gift will encourage informed public debate at a time of unprecedented global uncertainty and deepening political polarisation.

'The SNF Wing and Chatham House SNF CoLab will ensure Chatham House can continue to serve as a trusted hub for dialogue and a source of credible information, analysis and ideas on international affairs. It is an enormous boost to our staff and their work as we begin our second century, and of special value in such turbulent times.'

SNF Co-President Andreas Dracopoulos said, 'Chatham House is one of our key partners, and this grant marks an important new stage in our collaboration. At a time of uncertainty in international affairs, supporting the world-class independent analysis that can help citizens around the world engage in informed decisions about their future is essential. We are proud to help Chatham House maintain its independent voice while deepening its engagement with the public.'

The Stavros Niarchos Foundation’s past support has enabled Chatham House to establish an ‘SNF Floor’ with a broadcast media studio, a purpose-built simulation centre and training facilities, which will now be incorporated into the larger SNF Wing. The floor was officially opened by His Royal Highness the Duke of Sussex in 2017, when he took part in a scenario exercise exploring how to respond to a humanitarian emergency that required landmine clearance, drawing on the Duke’s ongoing work in this field.

For more information please contact:

pressoffice@chathamhouse.org
Phone: +44 (0)207 957 5739

For the past few months, users have been sharing their thoughts on our website on the future of democracy and the role of technology in it. Many have shared concerns about the effects of technological change:  

• Social media may be undermining the historic role of politicians to speak on behalf of their constituencies.
• Twitter favours brief writing and hence brief thinking, which may be leading to a deterioriation in democratic debates.
• The risk that the so-called 'echo chamber effect' undermines balanced and reasoned public debate.

But there have also been lots of ideas about how technology can help European democracies become more responsive and dynamic such as:

• The use of technology to better inform citizens and include civil society in decision-making.
• Sybil-proof identity verification for social network accounts operated by local municipalities.
• The development of non-profit personal data cooperatives as a response to the domination of Big Tech.

Now we want users help in shaping the final report. What do you think should be included?

We are opening up the report writing process and inviting you to take part and feed in your views. Work with us on a collaborative draft in Google Docs – comment, edit and get an insight into the black box of think tank research.

We’ll also be incorporating the most interesting submissions from the previous phase. If you'd like to make a submission, you can still do so here.

How To Join

To access the documents, you will need a Gmail account and to be registered as a user on demtech.chathamhouse.org. Each research question has its own working document, accessed via the Research Questions page.

The process is open to everyone. We look forward to working with you!

Join the project now

The Chatham House Prize is awarded to the person, persons or organization who is deemed to have made the most significant contribution to the improvement of international relations in the previous year. The presentation ceremony and panel discussion with the winners will be livestreamed on Wednesday.

The Blue Planet II series highlighted the damage caused by discarded plastics to the world’s oceans and marine wildlife. It is estimated that there are more than 150 million tonnes of plastic in the world’s oceans; resulting in the deaths of 1 million birds and 100,000 sea mammals each year. 

Dr Robin Niblett, director of Chatham House said: ‘Plastic pollution is one of the gravest challenges facing the world’s oceans, and undoubtedly an international issue. Sir David and the BBC Studios Natural History Unit played an instrumental role in helping to put this issue at the forefront of the public agenda. Blue Planet II spurred a passionate global response and generated clear behavioural and policy change.’

This year the G20 agreed on an international framework to address marine plastic litter, acknowledging the increasing urgency of the issue and the need for an international solution. This follows action from the UK government, including a plan to ban common plastic items and investment in global research.

See full award citation

Read more about Chatham House's research work in this area

Other nominees

Dr Niblett thanked Chatham House members for voting and acknowledged the outstanding achievements of the 2019 nominees:

Abiy Ahmed, prime minister of Ethiopia, nominated for his efforts to transform civic leadership and promote plural politics, free speech and peace in Ethiopia 

Katrín Jakobsdóttir, prime minister of Iceland, nominated for her commitment to gender equality and women’s financial inclusion in Iceland 

Event

The Prize was presented to Sir David and Julian Hector by Her Majesty The Queen at Chatham House on Wednesday 20 November.

Watch video from the event

For more information please contact

Chatham House Press Office
pressoffice@chathamhouse.org
+44 (0)207 957 5739

BBC Studios Natural History Unit Communications Manager
Lynn.li@bbc.co.uk
+44 (0) 7513 137893

About the Chatham House Prize

The Chatham House Prize is voted for by Chatham House members, following nominations from the institute’s staff. The award is presented on behalf of the institute's patron, Her Majesty the Queen, representing the non-partisan and authoritative character of the Prize.

The Chatham House Prize was launched in 2005. Previous recipients of the Prize include the Committee to Protect Journalists, Colombian president Juan Manuel Santos, president of Ghana John Kufuor, Médecins Sans Frontières and Melinda Gates, co-founder of the Bill and Melinda Gates Foundation.

Chatham House is a world-leading policy institute based in London. Our mission is to help governments and societies build a sustainably secure, prosperous and just world. We engage governments, the private sector, civil society and our members in open debate and private discussions about the most significant developments in international affairs.  Our research and policy ideas involve rigorous analysis of critical global, regional and country-specific challenges and opportunities.

About BBC Studios Natural History Unit 

BBC Studios Natural History Unit produces the world’s most iconic natural history programmes, such as Blue Planet II and Planet Earth II, which have been watched by more than a billion people globally. Ranging from technically challenging live shows and super-landmarks to long-running series and children’s content, The Natural History Unit programmes include Dynasties, Blue Planet Live, Springwatch, Animal Babies: First Year On Earth, Andy’s Dinosaur Adventures as well as the currently on air Seven Worlds, One Planet presented by Sir David Attenborough and third-party commissions for Discovery, Apple, Quibi, National Geographic and BBC America. 

The Natural History Unit is part of BBC Studios, a subsidiary of the BBC, which develops, produces and distributes bold, British content, making over 2,500 hours of content each year, operating in 22 markets globally and generating revenue of around £1.4bn. In the year to March 2019, it returned £243m to the BBC Group, complementing the BBC’s licence fee and enhancing programmes for UK audiences.