On March 5, Chinese President Xi Jinping spoke to the Shanghai delegates to the National People’s Congress (NPC) session in Beijing. China’s top leaders use these side meetings to convey policy guidance on a range of issues, and Xi used this particular one to offer his perspective on relations with Taiwan. There has been some nervousness in the wake of the January 16 elections, which swept the opposition Democratic Progressive Party (DPP) to power in both the executive and legislative branches. Because the Beijing government has always suspected that the fundamental objective of the DPP is to permanently separate Taiwan from China, observers were waiting expectantly to hear what Xi would have to say about Taiwan.

Well before the March 5 speech, of course, Xi’s subordinates responsible for Taiwan policy had already laid out what Taiwan President-elect Tsai Ing-wen and her party would have to do to prevent cross-Strait relations from deteriorating, and they continued to emphasize those conditions after Xi’s speech. But analysts believed that Xi’s own formulation would be the clearest indicator of Beijing’s policy. He is, after all, China’s paramount leader, and his words carry a far greater weight than those of other Chinese officials.

This is what Xi said to the Shanghai NPC delegation about Taiwan [translation by the author, emphasis added]:

Compatriots on the two sides of the Strait are blood brothers who share a common destiny, and are people for whom blood is thicker than water…Our policy towards Taiwan is correct and consistent, and will not change because of a change in [who heads] the Taiwan authorities. We will insist upon the political foundation of the “1992 consensus,” and continue to advance cross-Strait relations and peaceful development…If the historical fact of the “1992 consensus” is recognized and if its core connotation is acknowledged, then the two sides of the Strait will have a common political basis and positive interaction [virtuous circle] can be preserved. We will steadily push forward cross-Strait dialogue and cooperation in various fields, deepen cross-Strait economic, social, and financial development, and increase the familial attachment and welfare of compatriots [on both sides], close their spiritual gap, and strengthen their recognition that they share a common destiny. We will resolutely contain the separatist path of any form of Taiwan independence, protect state sovereignty and territorial integrity, and absolutely not allow a repetition of the historical tragedy of national separation. This is the common wish and firm intention of all Chinese sons and daughters, and is also our solemn pledge and obligation to history and to the people. The fruits of cross-Strait relations and peaceful development require the common support of compatriots on the two sides; creating a common and happy future requires the common effort of compatriots on the two sides; and realizing the great revival of the Chinese nation requires that compatriots on the two sides join hands to work with one heart.

The italicized sentences are key: They state what the new DPP government should do if it wishes to maintain healthy cross-Strait relations and affirms Beijing’s resolve to oppose any behavior it doesn’t like. Xi didn’t threaten specific actions, but he probably didn’t have to. As always, Beijing reserves the right to decide what DPP attitudes and actions constitute separatism and a quest for Taiwan independence. 

Xi didn’t threaten specific actions, but he probably didn’t have to.

Some background

There are two important points of reference contextualizing this statement from Xi. 

Xi on November 7, 2015. First, there are his reported remarks on the future of cross-Strait relations during his unprecedented meeting with current Taiwan president Ma Ying-jeou in Singapore last November 7. At that time, Xi first appealed to ethnic solidarity and national unity, as he did again on March 5. He asserted that the stakes to end the state of division between Mainland China and Taiwan were very high because it was a critical part of how he views rejuvenating the Chinese nation—a theme he repeated to the Shanghai delegation. 

Xi said Taiwan, under the new government, could either continue to follow the path it has walked for the last seven-plus years under the current Ma Ying-jeou administration (“peaceful development”), or it could take the path of renewed “confrontation,” “separation,” and zero-sum hostility. If Taiwan wished to follow the first path, Xi insisted, its leaders must adhere to the 1992 consensus and oppose “Taiwan independence.” Without this “magic compass that calms the sea,” Xi warned, “the ship of peaceful development will meet with great waves and even suffer total loss.” He was willing to overlook the DPP’s past positions and actions, but only if it identified with “the core connotation of the 1992 consensus” (a reference to the PRC view that the Mainland and Taiwan are both within the territorial scope of China, a view the DPP contests). Xi alluded to the “core connotation” on March 5 but did not re-state its content. Xi then made clear that if “disaster” occurred, it would be the DPP’s fault—it was therefore up to Tsai, he implied, to accommodate to Beijing’s conditions. 

In language and tone, Xi’s Singapore statement was far more strident and alarmist than what he said on March 5. He made that first statement more than two months before the election, when perhaps he thought that tough talk would weaken Tsai’s and the DPP’s appeal to voters. If that was his objective, he failed. The tone of his March 5 remarks was more modulated, but the substance was the same. Beijing would define the crossroads that Taiwan faced, and it was up to Tsai to take the right path—at least what it defined the right path.

Beijing would define the crossroads that Taiwan faced, and it was up to Tsai to take the right path—at least what it defined the right path.

Tsai on January 21, 2016. Second, there is an interview that Tsai gave to Liberty Times (Tzu-yu Shih Pao) on January 21—less than a week after the elections—in which she sought to meet Beijing partway. For the first time, she used the phrase “political foundation” and said it had four elements: 

• “The first is that the SEF-ARATS discussions of 1992 are a historical fact and both sides had a common acknowledgment to set aside differences and seek common ground;” 
• “The second is the Republic of China’s current constitutional order.”
• “The third is the accumulated results of the more than 20 years of cross-strait negotiations, exchanges, and interactions;” and
• “The fourth is Taiwan’s democratic principles and the will of the Taiwanese people to make sure that Taiwan voters understood the limits to his tolerance.”

So, Tsai accepts the 1992 meetings as a historical fact and acknowledges that the two sides did reach an agreement of sorts, but does not accept the 1992 consensus itself as a historical fact. She spoke more about process than content. The Republic of China’s “current constitutional order” is also part of the foundation, which some have read as Tsai’s acceptance that the Mainland and Taiwan are both parts of China’s territory (Beijing’s “core connotation”)—I, however, am not so sure. Tsai did not reject Xi’s requirements out of hand, but she framed them in her own way. 

So are ties growing friendlier?

Was Xi’s tonal moderation on March 5—relative to November 7—an indicator that mutual accommodation was going on? Perhaps. But the fact that the November meeting was ostensibly private while the March speech was public might explain the difference. 

Moreover, the stream of Chinese articles and statements since March 5 that explicitly restate Beijing’s long-standing preconditions are reason to doubt that much accommodation is actually occurring. The three basic scenarios I outlined last December—accommodation, limited Chinese punishment of the Tsai administration, and comprehensive punishment—are still in play, and the key variable remains whether Xi and his subordinates trust Tsai Ing-wen’s basic intentions. That is, will they accept her recent formulations as a good-faith effort to avoid deterioration? The next milestone will be May 20, when Tsai Ing-wen gives her inaugural address and may provide a more detailed formulation of her approach to China.

       

Chinese President Xi Jinping is paying a US visit to attend the 4th Nuclear Security Summit. A US-based scholar noted that the trip not only shows China’s will to beef up cooperation with the rest of the world, but also signals that China, which has kept a low-profile, is ready to play a bigger role in global governance.

During the two-day summit starting from Thursday, President Xi will also meet with his US counterpart Barack Obama.

Li Cheng, director of the John L. Thornton China Center of the Brookings Institute, said that Xi’s second visit to Washington DC in six months highlights that the two major powers are seeking cooperation rather than confrontation.

The new type of major-power ties between the two nations, with win-win cooperation and mutual respect at its core, advocates collaboration rather than conflict, saidLi, explaining that such a relationship emphasizes a desire for cooperation.

He also pointed out that Xi’s attendance at the summit shows China's willingness to further collaborate with the international community. "His attendance will be greatly welcomed," Li stressed, adding that China now plays a crucial role in climate change, cyber security, nuclear security and global economic governance.

"As a major power, China's voice should be heard, and views should be delivered," said Li. He also noted that the international community will continue to respect China's growing role in international affairs.

Though China has previously maintained a low-profile in global governance, its role has since increased, the scholar commented.

Along with its rising international status, China also shoulders more responsibilities and obligations in narrowing the rich-poor gap, promoting South-South Cooperation and other global affairs, he added.

Li also applauded the momentum of Sino-US ties, saying that the leaders of both nations are making far-sighted choices based on an expandedworld view and their fundamental interests.

Though some disputes emerged, they are far outweighed by bilateral cooperation, he noted, especially praising their collaboration in global issues.

"I believe their worldwide cooperation will generate a spillover effect, so that the two will better understand each other and advance cooperation," said Li. 

This piece originally appeared in People's Daily.

       

The most noticeable trend under the leadership of Xi Jinping since the 2012 National Congress of the Chinese Communist Party (CCP) has been the continuing consolidation of power. In particular, the military has been a key forum in which Xi has strengthened both his personal power and his new administration’s authority. Xi has adopted several approaches and political tactics to achieve this, including purging the two highest-ranking generals under the previous administration for corruption and other charges; arresting 52 senior military officers on various charges of wrongdoing; reshuffling generals between regions, departments, and services; attempting to systematically reform the PLA’s structure and operations; and, last but not least, rapidly promoting “young guards” (少壮派) in the Chinese military.

These bold moves will have profound implications—not only for Xi’s political standing in the lead-up to the next leadership turnover in 2017, but also for the development of civilian-military relations in the country and for the trajectory of China’s military modernization. The third installment in this series focuses on personnel changes that have occurred during the early phase of military reform.

Who are the rising stars in the PLA following the recent reorganization and reshuffling? What are the distinguishing characteristics of the “young guards”? What are possible explanations for and implications of some of the highest-level personnel changes, such as the retirement of the heavyweight military figure General Liu Yuan and the marginalization of Xi’s confidant General Cai Yingting? How does Xi successfully perform the delicate balancing act in personnel appointments by aggressively promoting his own long-time protégés and new loyalists while avoiding making too many enemies?

This is part three of a series that will appear in the upcoming issue of the China Leadership Monitor. Download the article in full below. The first paper in the series can be found here: Promoting "young guards": The recent high turnover in the PLA leadership (Part 1: Purges and reshuffles), and the second paper here: Promoting “young guards”: The recent high turnover in the PLA leadership (Part II: Expansion and escalation).

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• Promoting "Young Guards": The Recent High Turnover in the PLA Leadership (Part III: Personal and Political)

       

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This interview originally appeared in the Wall Street Journal. 

       

      

      

In “Designing Pan-Atlantic and International Anti-Crime Cooperation,” a chapter for the new book, Dark Networks in the Atlantic Basin: Emerging Trends and Implications for Human Security (Center for Transatlantic Relations, January 2015), Vanda Felbab-Brown discusses the context and challenges of designing policies to counter organized crime and illicit economies in West Africa. She argues that although large-scale illicit economies and organized crime have received intense attention from governments and international organizations since the end of the Cold War, the strategies designed to combat these developments have been ineffective and, at times, counterproductive. Many populations experiencing inadequate state presence, great poverty, and social and political marginalization are dependent on illicit economies; and policies prioritizing suppression of these economies can, paradoxically, increase the economic and political capital of criminal or militant groups.

The recent drug trade epidemic and the connections between various illicit economies and terrorism have cast a spotlight on West Africa, Felbab-Brown explains. But in analyzing how the drug trade affects West Africa, it is important to note that preexisting institutional and governance deficiencies crucially amplify the destabilizing effects of the drug trade. Neither the  drug trade nor the entrenchment of political corruption and misgovernance in West Africa are new phenomena emerging in the wake of cocaine flows through the region. Rather, political contestation in West Africa has long centered on the capture of rents from legal, semi-illegal, or outright illegal economies such as diamonds, gold, timber, cacao, human trafficking, and illegal fishing, resulting in a pervasive culture of illegality, in which society expects that laws will be broken, enforcement evaded, and that the state will be the source of rents rather than an equitable provider of public goods. A long history of rentier economies, illicit activity, smuggling, endemic corruption, weak institutions, and governance as mafia rule—that provides exceptions from law enforcement to the ruler's clique—has left West Africa with what Felbab-Brown terms the technology of illegality and the state as mafia bazaar.

This context makes West Africa a particularly vexing area for policymakers and international donors who want to combat militancy or organized crime in West Africa. The United States and international community should consider any intervention in the region strategically, calibrating assistance packages to the absorptive capacity of the partner country, focusing on broad state-building, and fostering good governance. The priority of the United States must be to combat the most disruptive and dangerous networks of organized crime and belligerency, recognizing that anti-crime interventions cannot eradicate the majority of organized crime, illicit economies, and drug trafficking in the region. Moreover, efforts by external donors, such as Colombia or Brazil, to transfer policy practices to West African countries need to carefully consider which external lessons and policies are suited for local contexts.

The full book, Dark Networks in the Atlantic Basin: Emerging Trends and Implications for Human Security, is available for purchase from The Brookings Institution Press.

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• Designing pan-Atlantic and international anti-crime cooperation

       

Less than four months after ascending the throne, Saudi King Salman bin Abdul Aziz Al Saud has made unprecedented changes in the line of succession that benefit his own son Prince Mohammed bin Salman. These shifts come as Salman pursues the most assertive foreign policy in recent Saudi history.

The king removed the sitting Crown Prince Muqrin, his half brother, and promoted the third in line Prince Mohammed bin Nayef, his nephew, up to number two. Salman made his own son, Mohammed bin Salman, the new number three. The King also replaced the ailing foreign minister, Prince Saud al Faisal with a non-royal, the current ambassador to Washington, Adel al Jubeir. Prince Saud had been Foreign Minister since 1975.

According to the royal palace, Prince Muqrin asked to be replaced, but no reason was given. No crown prince has ever given up the position in the history of the modern kingdom, founded in 1902. When Salman ascended the throne in January, the press trumpeted Muqrin as heir and there was no sign he was not eager to be the next in line. Many will assume he was asked to quit.

Speculation will be intense about why that might be. Muqrin was a protégé of the late King Abdullah. He is not close to Salman's branch of the family, the Sudeiris. He also appeared less enthusiastic about Salman's war in Yemen. As a former fighter pilot Muqrin understands the limits of air power, and he may have had doubts about the wisdom of what was initially called Operation Decisive Storm, but has now become a stalemate.

The new crown prince, 55-year-old Mohammed bin Nayef, is famous for defeating Al Qaeda's violent attempt to overthrow the House of Saud a decade ago. MBN, as he is known, led a four-year counter-terrorist campaign that decimated Al Qaeda in the Kingdom and drove its remnants into Yemen. In the process MBN survived at least four assassination plots. His father, the late Crown Prince Nayef, was so reactionary he was nicknamed the Black Prince. But MBN studied in Oregon and with the FBI and Scotland Yard before joining the Saudi interior ministry. He also holds the position of chairman of the Kingdom’s security and political committee coordinating all security issues.

Mohammed bin Salman, MBS, is the face of the Yemen war. He became defense minister in January and has been constantly on Saudi TV appearing to direct the war effort and meeting with foreign leaders to win support for the campaign against the pro-Iranian Zaydi Shia Houthi rebels. He is considered ruthlessly ambitious and is very close to his father. He has given up his position as chief of the royal court but he will undoubtedly keep control of access to the king.

Unlike most Saudi princes, MBS was not educated in the west. Instead he studied at King Saud University. There is controversy over his age, reputed to be anywhere from 29 to 34 (officially his birthday is July 24, 1980). He is chairman of a number of young people's organizations in the Kingdom and seeks to portray himself as the leader of the next generation of Saudis. He also chairs the powerful development and economics committee that coordinates economic policies, including oil price and supply.

In promoting his nephew and son, King Salman is passing the torch to the next generations of royals. Since 1902 the Kingdom has been ruled by the founder of the modern Kingdom Ibn Saud Abd Al Aziz or his sons. Now, Salman will be the last son to reign.

These changes have all been endorsed by the Allegiance Council, the committee of the sons and grandsons of Ibn Saud, but the legitimacy of selecting the next generation has been a question mark over the succession process for years. The king hopes it is now all settled.

The late King Abdullah's own son, Prince Mitab, has kept his powerful position as commander of the Saudi National Guard. The SANG is the family’s praetorian guard, it defends the capital, the holy mosques in Mecca and Medina and the oil industry. SANG troops have occupied Bahrain, the Kingdom’s tiny island neighbor, since the Arab Spring in 2011 to keep a minority Sunni monarchy in power.

The new lineup is solidly pro-American but riven with doubts about American reliability. The royals believe George W. Bush foolishly let Iran gain dominance in Iraq and fear Barack Obama is too eager for a nuclear deal with Iran and a grand rapprochement with Tehran. Repeated assurances by Obama and concrete support for the Yemen war have not altered Saudi doubts about America.

Salman's decision to wage war in Yemen so soon after coming to the throne reflected his acute concern that Iran was gaining a foothold on the Arabian Peninsula in what has always been the soft underbelly of Saudi Arabia, Yemen. The Zaydi Houthi rebels are not pawns of Tehran but they did initiate direct air flights between Sanaa and Tehran early this year, offered Iran port facilities and negotiated a lucrative oil deal. A few Iranian Revolutionary Guard advisers have been assisting the Zaydis for the last few years covertly. From Riyadh's view Iran already dominated decision-making in Baghdad, Damascus and Beirut, it does not want a fourth Arab capital to be aligned with Tehran.

But Salman's intense effort to secure wide Islamic backing for the war has been less than a success. Oman, Yemen's other neighbor, has opted not to join with the other five members of the Gulf Cooperation Council in the fighting, instead staying on the sidelines. The Pakistani parliament voted unanimously to keep neutral and rebuff repeated Saudi requests for ground troops to aid the war effort. Pakistani officials have privately suggested Salman panicked into the war without a viable strategy to get the Houthis out of Sanaa. Even Egypt, which benefits from billions in GCC aid, has opted not to send troops. although it's navy is supporting the Saudi blockade of Yemen.

The Yemen war is part Saudi-Iranian regional rivalry, part the unfinished business of the Arab Spring revolutions and part sectarian Sunni-Shia animosity. It is above all the Salmans’ war, father and son together. The surprise elevation of MBN and MBS underscores how the stakes in this war are crucial, not only to Yemen's future but increasingly to the future of the House of Saud.

This piece was originally published by The Daily Beast.

       

       

       

       

As the G-20 Summit concluded in Brisbane, Australia on November 16th, it set a target to achieve an incremental jump in global GDP growth of 2 percent by 2018 and made commitments to creating a Global Infrastructure Investment Initiative (GIII) to address an estimated $5 trillion per year in infrastructure needs around the world. 

It is a valid policy idea to expose the gap between current and potential rates of economic growth to the public. That the Australians put the spotlight on this growth gap was the central achievement of their G-20 Summit in Brisbane. It is a contribution to the global effort to energize the global economy and generate both greater and smarter growth. The question is, will it work? 

The gap between potential and actual growth has more to do with the patterns and sources of growth than the rates of growth. It is certainly necessary to continue to use monetary and fiscal policy to stimulate aggregate, demand-driven growth, but it will not be not sufficient.  

The people-problem in global growth has to do with structural obstacles: market dynamics of globalization tend to increase income inequality; technologies can be labor displacing rather than labor absorbing; and the knowledge-economy requires technical skills that are more sophisticated than investment-driven industrialization.  

As a result, the focus is now on structural policies and reforms, an issue on which the OECD has been an international leader. OECD Secretary General Angel Gurria jointly released an OECD report with Australia Minister of Finance Joseph Hockey in February of this year. At the G-20 Summit in Brisbane, Gurria said that it was possible that the global growth effort by the G-20, which the OECD and IMF are monitoring, could “overshoot” the 2 percent target.  

Discussing structural reforms tends to “get in the weeds” quickly, since the details vary by each country’s circumstances—as made clear by Brisbane’s G-20 Action Plan. Going from the Brisbane G-20 Summit to regional, ministerial, and national agendas and actions becomes the next phase in this effort to boost global growth by shifting the patterns and sources of growth. 

A key component in closing the growth gap will be the aforementioned Global Infrastructure Investment Initiative. The GIII is the culmination of a long discussion involving the G-20, the World Bank, the regional development banks, the private sector and others on how to accelerate much-needed investment in infrastructure—globally, and on a scale that can make a difference, especially in an era of fiscal policy constraints.  

The relationship between private and public investment in global infrastructure and other global growth projects is tricky. Just because many governments face reduced flexibility with fiscal policy at the moment does not mean that the responsibility for infrastructure investment can or will or should be picked up by private investors, much less private financial institutions and markets. The public and private sector each have a vital role. One will not work without the other.

Yet rules and norms do have to be worked out to incentivize private investment in infrastructure. This work is well underway and embodied in the Brisbane GIII. Incremental investment in global infrastructure adds up over time, and prudent direction of financing toward the most impactful projects can be a big boost to global growth and directly have an impact on peoples' lives. This is the kind of people-oriented action G-20 leaders were looking for in Brisbane.

Setting incremental “reach goals” is not just a word game or publicity play. It has proven to be a means of mobilizing resources, policies and efforts by diverse actors to stimulate higher-order results than might otherwise have happened. Just engaging in projecting likely growth outcomes can set the bar too low. In fact, all global goal setting is meant to motivate and mobilize momentum for just such incremental efforts. 

Taken together, a combination of structural reforms, infrastructure investment and continued growth-oriented monetary and fiscal policies can make a real difference in boosting global growth. This combination makes the Brisbane target of an additional 2 percent of global GDP growth by 2018 a feasible, even if ambitious, goal.

      

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

       

       

       

       

       

     

     

       

       

       

       

       

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From a bureaucratic backwater in the waning days of the Cold War, the fight against global poverty has become one of the hottest tickets on the global agenda. The cozy, all-of-a-kind club of rich country officials who for decades dominated the development agenda has given way to a profusion of mega philanthropists, new bilaterals such as China, "celanthropists" and super-charged advocacy networks vying to solve the world's toughest problems. While philanthropic foundations and celebrity goodwill ambassadors have been part of the charitable landscape for many years, the explosion in the givers' wealth, the messaging leverage associated with new media and social networking, and the new flows of assistance from developing country donors and diasporas together herald a new era of global action on poverty. The new scale and dynamism of these entrants offer hopeful prospects for this continuing fight, even as the new entrants confront some of the same conundrums that official aid donors have grappled with in the past.

On August 1-3, 2007, the Brookings Blum Roundtable gathered representatives reflective of this dynamic landscape to discuss these trends. Through robust discussion and continuing cross-sector partnerships, the conference hopes to foster lasting and widespread improvements in this new field of development.

2007 Brookings Blum Roundtable: Related Materials
	Read the roundtable report - Making Poverty History? How Activists, Philanthropists, and the Public Are Changing Global Development »  Download the participant list » (PDF)  Download the scene setter » (PDF)

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2007 Brookings Blum Roundtable Agenda:

1. Fighting Global Poverty: Who'll Be Relevant In 2020?
   • Matthew Bishop, The Economist, "Fighting Global Poverty: Who'll Be Relevant In 2020?"
   • Homi Kharas, The Brookings Institution, "The New Reality Of Aid"
   • Jane Nelson, Harvard University, "New Development Players And Models"
2. Angelina, Bono, And Me: New Vehicles To Engage The Public
   • Darrell M. West, Brown University, "Angelina, Mia, And Bono: Celebrities And International Development"
   • Joshua Busby, University of Texas, Austin, "Is There A Constituency For Global Poverty? Jubilee 2000 And The Future Of Development Advocacy"
   • Ngozi Okonjo-Iweala, The Brookings Institution, "Nigeria's Fight For Debt Relief: Tracing The Path"
3. Leveraging Knowledge For Development
   • Ashok Khosla, Development Alternatives Group, "Leveraging Knowledge To End Poverty"
   • Eric Brewer, University of California, Berkeley, "Development And Engineering"
4. Social Enterprise And Private Enterprise
   Chaired by: Mary Robinson, Realizing Rights: The Ethical Globalization Initiative
   • J. Gregory Dees, Duke University, "Philanthropy And Enterprise: Harnessing The Power Of Business And Entrepreneurship For Social Change"
5. Africa's Economic Successes: What's Worked And What's Next
   Moderated by: Paul Martin, former Prime Minister of Canada
   Panelists
   • Donald Kaberuka, African Development Bank
   • Ngozi Okonjo-Iweala, The Brookings Institution
6. Effecting Change Through Accountable Channels
   • Jane Nelson, Harvard University, "Effecting Change Through Accountable Channels"
   • Simon Zadek, AccountAbility, "Accountability Compacts: Collaborative Governance For The 21^stCentury"
7. Global Impact: Philanthropy Changing Development
   • Mark R. Kramer, FSG Social Impact Advisors, "Philanthropy, Aid, And Investment: Creating A Common Language"
   • Joseph O'Keefe, The Brookings Institution, "Aid - From Consensus To Competition?"
8. Keynote Address
   • Former Vice President Al Gore, Generation Investment Management

       

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Global poverty and climate change are two of the most pressing challenges for global policymakers today, and require policy prescriptions that address their interrelated issues. Effective climate solutions must empower development by improving livelihoods, health and economic prospects while poverty alleviation must become a central strategy for both mitigating emissions and reducing the poor’s vulnerability to climate change.

2008 Brookings Blum Roundtable: Related Materials
	Read the roundtable report - Double Jeopardy: What the Climate Crisis Means for the Poor? »  Read the related book »  Download the participant list » (PDF) Download the scene setter » (PDF) Download the full roundtable agenda » (PDF)

In its fifth annual gathering, led by Lael Brainard and co-chaired by Strobe Talbott and Richard C. Blum, the Brookings Blum Roundtable addressed the challenges of climate change and development and convened leaders from both the development and climate change communities from August 1-3, 2008, to discuss and debate policy ideas that could benefit both fronts. By examining common challenges—accountability, effective deployment of resources, agenda-setting, mobilizing the public and financial resources, and achieving scale and sustainability—the Roundtable established a solid foundation for collaboration among the climate change and development communities and fostered ideas for policy action.

Keynote Sessions

Keynote Panel: “Noble Nobels: Solutions to Save the Planet”

• Steven Chu, University of California, Berkeley
• Al Gore, Generation Investment Management; 45^th Vice President of the United States

Keynote Panel: Legal Empowerment of the Poor

• Mary Robinson, Realizing Rights: The Ethical Globalization Initiative
• Madeline Albright, The Albright Group; Former U.S. Secretary of State

Keynote Panel: “How Do We Achieve Climate Justice?”

• Kumi Naidoo, CIVICUS and the Global Call to Action Against Poverty
• Mary Robinson, Realizing Rights: The Ethical Globalization Initiative
  
  

       

       

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

How mobile fights disease

1. Training Healthcare Workers

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

2. Rapid Deployment

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

3. Virtual Records

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

Mobile health policy challenges

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

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

      

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The last time policymakers substantially reviewed federal communications policy, it was the early 1990s. At that time, the Internet was only beginning to reveal itself to be the dynamic technology seen today. Mobile devices and services, such as 100 megabit broadband, smartphones, applications, social networks, tablets, and digital streaming, were barely imagined, let alone factored into policy discussions. As the recent debate around net neutrality highlights, policymakers today can be hamstrung in efforts to fit today's communications technologies and services into last century's communications law. Given that most major communications laws are out of step with today’s advanced mobile capabilities, what shape would smart, updated legislation and regulatory changes take? What are the major changes to U.S. communications law that most need to be addressed and implemented?

On March 24, the Center for Technology Innovation at Brookings hosted a conversation with Craig Silliman, general counsel and executive vice president for public policy at Verizon, to examine what 21st century communications polices might look like.

Video

• Updating communications law and regulations for the mobile era

Audio

• Updating communications law and regulations for the mobile era

Transcript

• Uncorrected Transcript (.pdf)

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• 20150324_communications_law_transcript

      

Abstract

New and emerging work relationships arising in the “online gig economy” do not fit easily into the existing legal definitions of “employee” and “independent contractor” status. The distinction is important because employees qualify for a range of legally mandated benefits and protections that are not available to independent contractors, such as the right to organize and bargain collectively, workers’ compensation insurance coverage, and overtime compensation. This paper proposes a new legal category, which we call “independent workers,” for those who occupy the gray area between employees and independent contractors.

Independent workers typically work with intermediaries who match workers to customers. The independent worker and the intermediary have some elements of the arms-length independent business relationships that characterize “independent contractor” status, and some elements of a traditional employee-employer relationship. On the one hand, independent workers have the ability to choose when to work, and whether to work at all. They may work with multiple intermediaries simultaneously, or conduct personal tasks while they are working with an intermediary. It is thus impossible in many circumstances to attribute independent workers’ work hours to any employer. In this critical respect, independent workers are similar to independent businesses. On the other hand, the intermediary retains some control over the way independent workers perform their work, such as by setting their fees or fee caps, and they may “fire” workers by prohibiting them from using their service. In these respects, independent workers are similar to traditional employees.

Evidence is presented suggesting that about 600,000 workers, or 0.4 percent of total U.S. employment, work with an online intermediary in the gig economy. Although there are probably many more workers who currently work with an offline intermediary who would qualify for independent worker status than there are who work with an online intermediary, the number of workers participating in the online gig economy is growing very rapidly.

In our proposal, independent workers — regardless of whether they work through an online or offline intermediary — would qualify for many, although not all, of the benefits and protections that employees receive, including the freedom to organize and collectively bargain, civil rights protections, tax withholding, and employer contributions for payroll taxes. Because it is conceptually impossible to attribute their work hours to any single intermediary, however, independent workers would not qualify for hours-based benefits, including overtime or minimum wage requirements. Further, because independent workers would rarely, if ever, qualify for unemployment insurance benefits given the discretion they have to choose whether to work through an intermediary, they would not be covered by the program or be required to contribute taxes to fund that program. However, intermediaries would be permitted to pool independent workers for purposes of purchasing and providing insurance and other benefits at lower cost and higher quality without the risk that their relationship will be transformed into an employment relationship.

Our proposal seeks to structure benefits to make independent worker status neutral when compared with employee status, as well as to enhance the efficiency of the operation of the labor market. By extending many of the legal benefits and protections found in employment relationships to independent workers, our proposal would protect and extend the social compact between workers and employers, and reduce the legal uncertainty and legal costs that currently beset many independent worker relationships.

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