Hope, Peace and Reconciliation: Pope Francis in Mozambique Expert comment sysadmin 4 September 2019

A papal visit will highlight the importance of the recently signed peace agreement between the government and opposition.

Pope Francis’ visit to Mozambique on 4–6 September comes at a critical political moment. The theme for the papal Africa trip (which also includes Madagascar and Mauritius) is ‘pilgrim of hope, peace and reconciliation’. This is especially relevant for Mozambique, as this is the first week of the official campaign for Mozambique’s sixth national elections on 15 October.

It is also the one-month anniversary of the Maputo Accords for Peace and Reconciliation between the government and the armed opposition, RENAMO (and the fifth anniversary of the previous such agreement in 2014).

What is unusual is that the pope accepted to visit Mozambique just after a peace accord and in the run-up to national elections. Something similar has happened only once, when Pope John Paul II visited Angola in June 1992 (following the Bicesse Accords) prior to the country’s first ever national elections in September. Unfortunately Pope John Paul’s preaching of reconciliation and pluralism failed and civil war resumed some months later, following rejection of the preliminary election results. Angola’s civil war only finally ended a decade later in 2002.

The last papal visit to Mozambique was also by Pope John Paul II in 1988, when civil war was still ongoing, and the country was still a single party state. Despite the war, massive congregations attended and RENAMO reached local ceasefires and agreements to maintain electricity supply to honour the visit. Some of the seeds for the Rome peace process were laid during this trip – especially as it also represented a formal reconciliation of FRELIMO, the ruling party, with the Catholic Church.

This papal visit to Mozambique is equally anticipated, as was highlighted several times during speeches at the 6 August peace agreement signing in Maputo. When I was in Maputo last month, sales of papal-pictured capulanas (a Mozambican sarong) were brisk and Mozambican television carried countdown clocks on many programmes for the touchdown of Pope Francis on national soil.

The Catholic Church has played an instrumental role in promoting peace in Mozambique over the years. The 1977–92 civil war ended through negotiations hosted at the Sant’ Egidio lay community in Rome, and the current Archbishop of Bologna, Dom Matteo Zuppi (who led the Sant’ Egido negotiations in 1992 and is soon to be made a cardinal) was an official witness to 6 August accords signing.

When targeted armed conflict resumed in 2013, faith groups once more re-engaged and in 2016 Sant’ Egidio once more co-led mediation efforts, less successfully than in 1991–92. Sant’ Egidio (including during a presidential visit to Rome in July) contributed to convincing the Vatican that this papal visit should occur before the October elections.

President Filipe Nyusi anxiously wanted this visit to occur before the elections. He is seeking re-election for his second and final term and a papal visit should help win some votes. His party, FRELIMO, is also worried about securing a majority in the national assembly, as it has been weakened by patchy delivery of services and ongoing high-level corruption scandals.

This year, President Nyusi’s priorities have been to show that he can attract international investment (such as Andarko’s recently announced final investment decision on its gas project), a peace agreement with RENAMO (the August agreements) and a papal visit, so a successful trip would complete his goals.

The pope’s ‘hope, peace and reconciliation’ message of his visit is important. Twice previously, the FRELIMO-led government and RENAMO have reached definitive agreements, in Rome (1992) and Maputo (2014), but failed to fully end bloodshed. This new August 2019 agreement is the third attempt, and if it is to last, it will require political goodwill, compromise and an acceptance of more inclusive national politics by both parties.

There are two immediate threats to this agreement. The first is the forthcoming 15 October elections and their conduct could make or break it. Accepting reconciliation and greater pluralism underpins this agreement, but RENAMO expects to increase its share of the parliamentary vote and win a majority in some provinces (and therefore indirectly elect their choice for governor).

A second threat is the ‘Military Junta’, a RENAMO splinter group that claims to be 500 strong, but probably accounts for 80 armed persons. It rejects the 6 August agreement and warns that it could disrupt the elections. This group has asked for mediation, and hopefully can be accommodated in a side deal to the main one agreed in August, which already provides for the reintegration of over 5,000 RENAMO supporters and combatants.

A recent Chatham House research paper on elite bargains in Mozambique concluded that the October elections will be the first immediate test of the August agreement. If the elections pass without significant electoral manipulation or violence and this August deal sticks on the third attempt, the domestic focus should then move onto poverty reduction, combating inequality, education and solving the new security crisis with Islamic militants in Cabo Delgado province.

Zimbabwe Futures 2030: A Vision for Inclusive Long-Term Economic Recovery 10 October 2019 — 10:00AM TO 12:15PM Anonymous (not verified) 5 September 2019 Harare, Zimbabwe

In its Vision 2030, the government of Zimbabwe committed itself to facilitating an open market and stable economy through strategies such as the Transitional Stabilization Programme (TSP) and new industrialization policy. The private sector is pivotal to these objectives and creating an environment conducive to inclusive and job-creating economic growth. Economic growth can only be achieved with a conducive policy environment and government support to underpin markets with provision of public goods, entrepreneurial incentives and protect contract enforcement and dispute resolution mechanisms.

This event will launch a new Chatham House Africa Programme publication on Zimbabwe’s Vision 2030. The paper is the culmination of an inclusive research process that has drawn on senior private sector expertise, civil society, academics, technocratic elements of government and other experts to develop policy recommendations that will support inclusive economic growth in Zimbabwe.

This event is held in partnership with the Zimbabwe Business Club and Konrad Adenauer Stiftung (KAS). It is supported by KAS and the Dulverton Trust.

Economic Recovery and Anticorruption in South Africa: Assessing Progress on the Reform Agenda 4 December 2019 — 3:00PM TO 4:00PM Anonymous (not verified) 25 November 2019 Chatham House | 10 St James's Square | London | SW1Y 4LE

South Africa has significant economic potential based on its resource endowment, quality human capital and well-developed infrastructure compared to the region. However, the country’s economic growth rate has not topped 2 per cent since 2013, and in 2018, was below 1 per cent. This has put a strain on citizens and communities in a country that still suffers from structural inequality, poverty and high unemployment. Economic recovery and anti-corruption were the central pillars of President Cyril Ramaphosa’s 2019 electoral campaign and he has set an investment target of $100 billion. However, voters and investors alike are demanding faster and more visible progress from the country’s enigmatic leader who has a reputation for caution and calculation.

At this event, Professor Nick Binedell will discuss the progress of and opposition to the president’s economic reform agenda and the opportunities for international investment to support long term inclusive and sustainable growth in South Africa.

Attendance at this event is by invitation only.

Angola's Business Promise: Evaluating the Progress of Privatization and Other Economic Reforms 21 January 2020 — 2:30PM TO 3:30PM Anonymous (not verified) 16 January 2020 Chatham House | 10 St James's Square | London | SW1Y 4LE

Minister Nunes Júnior will discuss the progress of the Angolan government’s economic stabilization plans and business reform agenda including the privatization of some state-owned enterprises. These reforms could expand Angola’s exports beyond oil and stimulate new industries and more inclusive economic growth.

THIS EVENT IS NOW FULL AND REGISTRATION HAS CLOSED.

POSTPONED: Pursuing Economic Reform and Growth in South Africa: the view from the African National Congress 18 March 2020 — 10:30AM TO 11:30AM Anonymous (not verified) 3 March 2020 Chatham House | 10 St James's Square | London | SW1Y 4LE

The government of South Africa is pursuing a programme of reform to revitalize the economy, strengthen institutions and combat corruption. The State of the Nation Address (SONA) on 13 February and the budget speech of 26 February represent the most significant articulation of the government’s economic strategy. Central to this is the government’s plans for the energy sector, which is fundamental for reviving the economy, and the reform of State Owned Enterprises (SOEs). But questions remain about possible divergence of the approach taken by government ministers from the policy position of the ruling party, the African National Congress (ANC), and what this might mean for the sustainability and progress of reform.

At this event, Paul Mashatile, Treasurer General of the ANC, will discuss the party’s assessment of reform efforts to date and priorities for delivering on inclusive growth.

PLEASE NOTE THIS EVENT IS POSTPONED UNTIL FURTHER NOTICE.

Webinar: South Africa's Economic Recovery Beyond COVID-19 27 May 2020 — 1:00PM TO 2:00PM Anonymous (not verified) 18 May 2020

Mozambique’s Peace and National Reconciliation Agreement: One Year On 6 August 2020 — 2:30PM TO 4:30PM Anonymous (not verified) 29 July 2020 Online

August 6, 2020 marks one year since the Peace and National Reconciliation Agreement was signed in Maputo. The agreement, signed by the President of Mozambique Filipe Nyusi and RENAMO leader Ossufo Momade, and witnessed by regional and international political and religious leaders, ended the return to conflict that started in 2013.

It also paved the way for Mozambique’s national elections in October 2019. Since the agreement, the Mozambique Liberation Front (FRELIMO) won a landslide victory in the elections, weakening RENAMO, and a splinter group has conducted targeted armed violence in Manica and Sofala provinces. Yet, the disarmament, demobilization, and reintegration (DDR) process has made progress.

At this event, senior figures reflect on the peace agreement and the key factors of its success. The event also draws upon insights from the authors of recent publications on the latest peace agreement in the context of longer term trends of democratization and peace-building in Mozambique.

A Chatham House Africa Programme research paper published in August 2019, Prospects for a Sustainable Elite Bargain in Mozambique: Third Time Lucky?, examined how the deal was achieved. The Portuguese version includes the full text of the peace accord. Read the research paper in Portuguese or English here.

South Africa's Economic Outlook 20 August 2020 — 12:00PM TO 1:00PM Anonymous (not verified) 11 August 2020 Online

South Africa’s long mooted economic reforms have been slow to materialize. The economy had fallen into recession even before the COVID-19 pandemic, and had been stripped of its international investment grade rating. The reserve bank is now forecasting a contraction in GDP of over seven percent for 2020.

There are significant questions around the role of the state in the economy, the level of intervention, and its affordability, with key government figures sceptical of rapid market reforms. The mandate and independence of the South African Reserve Bank has also been a subject of public debate. The IMF has approved a US$4.3 billion emergency financial assistance package to help mitigate the health and economic shock to the country. But it has also made clear that there is a pressing need to ensure debt sustainability and implement structural reforms to support recovery and achieve sustainable and inclusive growth.

At this event, Lesetja Kganyago, the governor of the South African Reserve Bank (SARB), gives his assessment of the expected trajectory of the South African economy in the short and medium term. He discusses the IMF package and the implications for economic reform, and the role of the reserve bank in delivering sustainable and inclusive growth.

Zimbabwe's Economy During the Coronavirus Pandemic and Beyond 8 September 2020 — 10:00AM TO 11:30AM Anonymous (not verified) 26 August 2020

COVID-19 has had a devastating effect on Zimbabwe’s already floundering economy. Important foreign currency earning industries have virtually stopped, and across the country livelihoods are at risk and an increasing number of people are reliant on government grants.

Businesses are having to become more flexible but are constrained by a weak policy environment and lack of confidence in the economy. Since 2017, the government has been pursuing an economic reform agenda and Transitional Stabilization Programme (TSP), which was scheduled for completion by the end of 2020. The deepening challenges highlight the need to accelerate economic reform and build confidence in order to achieve sustainable and inclusive growth.

At this webinar, speakers discuss the measures that government, businesses, and individuals are adopting in response to the COVID-19 economic challenge, and the policies required for recovery.

Read a meeting summary

This webinar is held in partnership with the Konrad Adenauer Stiftung.

South Africa's Economic Reform and Employment in the Context of the Coronavirus Pandemic 3 September 2020 — 3:00PM TO 4:00PM Anonymous (not verified) 26 August 2020 Online

President of COSATU, Zingiswa Losi, discusses the organization’s priorities for protecting jobs and workers, and working with other stakeholders to build a sustainable post-pandemic economy.

Employment in South Africa fell by an estimated 18 per cent between February and April 2020. The measures imposed to control the spread of COVID-19 suffocated an already weak economy and unemployment has hit a new high.

The stated aims of the government’s economic reform plans include the support of job creation in labour intensive industries, but the reform of the state and rebalancing of the economy and fiscus could lead to further job losses in state agencies and enterprises.

Protecting jobs while ensuring the health and safety of workers are dual priorities, and require the joint commitment and ‘social compact’ of labour, business and government.

Zimbabwe’s Economic Governance and Regional Integration 17 November 2020 — 12:00PM TO 1:30PM Anonymous (not verified) 6 November 2020 Online

Panellists discuss policy and governance for long-term economic prosperity in Zimbabwe, reflecting on the role of institutional change and regional integration in the context of the shocks caused by the coronavirus pandemic.

At this virtual event, panellists and participants will discuss policy and governance for long-term economic prosperity in Zimbabwe, reflecting on the role of institutional change and regional integration.

The government of Zimbabwe has emphasized its commitment to economic reform and its ambition to achieve upper-middle-income status by 2030, but there are considerable challenges to overcome.

The COVID-19 pandemic has exacerbated existing economic fragility. Improving the business climate to attract international private-sector investment will be contingent on clear, consistent and coherent policy and implementation, including targeting abuse and corruption.

Zimbabwe has, in recent years, successfully strengthened its regional trade integration, although some trade frictions remain. This is an important factor not only for catalysing economic growth in Zimbabwe, but for supporting regional prosperity and post-COVID recovery.

This webinar is the second in a series of events held in partnership with the Konrad Adenauer Stiftung on Zimbabwe’s economic reform and recovery.

Read a meeting summary

This event will also be broadcast live on the Africa Programme Facebook page.

Inclusion, agency and influence: The role of women in Zimbabwe’s economy 8 July 2021 — 3:00PM TO 4:30PM Anonymous (not verified) 2 July 2021 Online

Speakers discuss the changing role of women in Zimbabwe’s economic structures and the priorities for promoting greater economic inclusion, agency and influence of women.

Zimbabwe’s National Development Strategy of 2021-2025 highlights the importance of gender sensitivity in policymaking and of women’s economic participation in attaining the government’s Vision 2030.

However, women have been among the worst affected groups by the devastating effects that COVID-19 has had on Zimbabwe’s already floundering economy, which has exacerbated the challenges they face in economic life, such as access to credit, financial services and social security.

Leveraging existing structures such as women’s groups, micro-finance facilities, education and training, and national gender mechanisms, as well as supporting wider financial and digital inclusion in Zimbabwe, is central for the country’s sustained economic recovery.

This event also focuses on the differing impacts of COVID-19 on women’s economic activities across various sectors, as well as along rural-urban and formal-informal economy lines.

Read a meeting summary

This webinar is part of a series of events in partnership with the Konrad Adenauer Stiftung on Zimbabwe’s economic recovery and reform.

This event will also be broadcast live on the Africa Programme Facebook page.

Angola Forum 2021: Policy options to support economic recovery in Angola 7 October 2021 — 2:00PM TO 5:00PM Anonymous (not verified) 22 September 2021 Online

Speakers discuss policy options to support economic recovery in Angola as the country transitions away from a state-led oil economy to a private-sector-led growth model.

The government of Angola has made some progress on a range of policies targeting macroeconomic stability and structural reform. However, the country has been suffering from a recurring economic recession for six consecutive years, with the last positive annual GDP growth rate posted in 2015 at 0.9 per cent.

The national budget remains dependent on oil revenue, leaving the country highly exposed to volatile oil prices particularly during the COVID-19 pandemic. While revenues collapsed, increased spending was needed to respond to the health crisis and estimates of Angola’s debt spike range from 130 to 150 per cent of its GDP by the close of 2020.

At this virtual Angola Forum, speakers discuss policy options to support economic recovery in Angola as the country transitions away from a state-led oil economy to a private-sector-led growth model.

The Forum launches the English translation of the Angola Economic Report 2019-20 by the Centro de Estudos de Investigação (CEIC) of the Catholic University of Angola in partnership with the Konrad-Adenauer-Stiftung (KAS), and the findings of Afrobarometer’s first ever survey in Angola, Ovilongwa – Estudos de Opinião Pública, which interviewed 2,400 adult Angolans and sampled individual perceptions on democracy and economic reform in Angola.

This event will be held in English and Portuguese with simultaneous interpretation.

The Forum will also be broadcast live on the Africa Programme Facebook page.

Zambia’s political and economic reform and recovery 5 November 2021 — 11:30AM TO 12:30PM Anonymous (not verified) 2 November 2021 Chatham House and Online

At this event, HE Hakainde Hichilema, president of the Republic of Zambia, discusses his vision for Zambia’s development and long-term political and economic reform and recovery.

Zambia’s new administration, following the general elections of August 2021, faces a daunting challenge of reversing economic contraction, lowering income-eroding inflation, and addressing the unsustainable national debt.

The country has been one of the few to seek debt restructuring under the G20’s new Common Framework for Debt Treatments, and its immediate priorities include a prospective agreement with the International Monetary Fund (IMF).

Young Zambians are eager for jobs and improved living standards. But the government’s ambition to create more jobs and achieve middle-income status will depend on both attracting new investment into its copper sector and pursuing a programme of economic diversification supporting growth beyond the mining industry.

Addressing these economic concerns will also need to be supported by a programme of political reform and rehabilitation of citizens’ trust in the state.

South Africa’s ANC party policy conference 2022: Outcomes and prospects 10 August 2022 — 1:00PM TO 2:00PM Anonymous (not verified) 4 August 2022 Online

Paul Mashatile, Treasurer-General of the African National Congress (ANC), discusses the outcomes of the 6th ANC Policy Conference 2022.

The African National Congress (ANC) recently concluded its 6th National Policy Conference in Johannesburg, in the year that the ANC has declared ‘The Year of Unity and Renewal to Defend and Advance South Africa’s Democratic Gains’. The conference was a precursor to the party’s 55th National Elective Conference to be held in December.

The conference has come less than a year after municipal polls in which the ANC garnered less than 50 per cent of votes, its lowest since 1994. Many believe internal factionalism is impeding party reform and hampering its ability to address unemployment and entrenched inequality.

At this webinar, Paul Mashatile, Treasurer-General of the ANC, will discuss the outcomes of the ANC Policy Conference 2022, including measures to accelerate inclusive growth, job creation and a just energy transition.

This event will also be broadcast live on the Chatham House Africa Programme’s Facebook page.

Angola forum 2022: Prospects for Angola's social and economic future 15 December 2022 — 1:00PM TO 4:30PM Anonymous (not verified) 28 November 2022 Online

At this online Angola forum, experts will discuss Angola’s social and economic future, and what to expect from 2023.

At this virtual Angola Forum, speakers will discuss Angola’s social and economic future and what to expect from 2023.

Angola experienced positive economic momentum in 2022 allowing it to exit its six-year recession, with the economy taking centre stage in the August national multiparty elections. Increased oil prices and high levels of production have driven Angola’s economic growth and improved macroeconomic conditions, as well as helping the country to reduce its public debt to 56.5 per cent of Gross Domestic Product (down from 79.7 per cent in 2021).

However, a global economic downturn in 2023, with increased inflation, means Angola’s re-elected MPLA government will need to focus on job creation, greater economic inclusivity and diversifying away from an oil-led economy. It will also require Angola to navigate its international partnerships more effectively in this era of heightened geopolitical rivalries.  

At this online Angola forum, experts will discuss Angola’s social and economic future and what to expect from 2023. Speakers will reflect on the social and economic trends seen in 2021-22 and explore election trends, human rights and international relations.

This Angola Forum is supported by the Konrad-Adenauer-Stiftung.

The road to COP27: In conversation with US Special Presidential Envoy for Climate John Kerry 27 October 2022 — 3:00PM TO 4:00PM Anonymous (not verified) 20 October 2022 Chatham House and Online

What will progress on climate change look like at COP27?

With global attention zeroing in on COP27, policymakers and world leaders will meet in Egypt to take the next step in the fight against the climate crisis. The planet is on course to warm well beyond 1.5°C and climate hazards are increasing our exposure to climate risk. Violent and unpredictable weather events increasingly leave devastation among communities, particularly in vulnerable countries.

At the same time, the ripple effects of the conflict in Ukraine will have wide-ranging economic, social and geopolitical consequences for years to come. Whilst some finance is being made available, more is needed to properly address the damage caused by climate change and fund the transition to net zero worldwide. These challenges have become more acute as the world grapples with a growing energy crisis, the war in Ukraine and a troubling economic outlook.

Joined by US Special Presidential Envoy for Climate John Kerry, the following questions are considered:

• Is ‘1.5 degrees’ still on track?

• How can countries better collaborate to move to net zero faster?

• How can we achieve progress on adaptation, climate finance, and loss and damage?

As with all members events, questions from the audience drive the conversation.

Read the transcript. 

Nigeria's 2023 elections: Security, economic and foreign policy imperatives 5 December 2022 — 1:00PM TO 2:00PM Anonymous (not verified) 23 November 2022 Chatham House and Online

Bola Ahmed Tinubu, presidential candidate for the All-Progressives Congress, discusses his vision and recently-unveiled manifesto for ‘renewing hope’ in Nigeria.

Nigeria is scheduled to hold presidential and national assembly elections on 25 February 2023 as well as governorship and other subnational elections on 11 March 2023.

The elections will end President Muhammadu Buhari’s two terms in office since his election in 2015 and will mark the first time that he is not engaging in a presidential poll since Nigeria’s transition to civilian rule in 1999 – an important marker in Nigeria’s trajectory of democratic consolidation.

Nigeria’s recently enacted Electoral Act has contributed to improved hope around the election process, reflected in the addition of 12.29 million new voters in Nigeria’s voter registration exercise across the federation’s 36 states and 1,491 constituencies.

Yet Nigeria stands at a critical juncture, having suffered from two recessions in the past six years, unprecedented levels of food insecurity, persistent fuel scarcity and high levels of crude oil theft.

Civic fatigue also remains an important challenge and President Muhammadu Buhari’s three main policy pillars of security, economy and corruption continue to be defining issues for citizens.

At this event, Bola Ahmed Tinubu, presidential candidate for the All-Progressives Congress, discusses his vision and recently unveiled manifesto for ‘renewing hope’ in Nigeria including his policy proposals for economic reform and revival and how to deliver secure and inclusive job opportunities for Nigerian citizens.

Download a transcript

This event is a members and Africa programme event and is part of a series of events and outputs examining Nigeria’s 2023 elections and political developments.

As with all Chatham House member events, questions from members drive the conversation.

Ten conflicts to watch in 2023 11 January 2023 — 6:00PM TO 7:00PM Anonymous (not verified) 8 December 2022 Chatham House and Online

This event examines the most dangerous wars and crises through the lens of the International Crisis Group’s flagship annual report ‘10 Conflicts to watch in 2023’.

Each year, International Crisis Group compiles a list of the ten conflicts to watch that examines key conflicts across the globe. Please join us for this event at which Dr Comfort Ero, International Crisis Group president and CEO, discusses today’s and tomorrow’s most impactful wars and crises.

Key questions to consider include:

• What far-reaching repercussions and knock-on effects of Russia’s war on Ukraine will have for Europe and the rest of the world?

• Which crises beyond Ukraine warrant collective attention in the year ahead?

• How do rising tensions among major powers impact multilateral efforts to resolve these conflicts, impede progress on global challenges and impact institutions working on crisis prevention?

As with all members events, questions from the audience drive the conversation.

Read the transcript. 

The state of the union? US foreign policy and a new US Congress 30 January 2023 — 5:30PM TO 6:30PM Anonymous (not verified) 11 January 2023 Chatham House and Online

As a new Congress takes shape, what is the impact for US foreign policy?  

The recent US 2022 midterm elections have led to a split with Republicans in command of the US House of Representatives and Democrats retaining a slim majority in the Senate.

Following a gruelling selection process for the new Speaker of the House, the new Congress took its seats in January 2023, but President Joe Biden no longer enjoys single-party control of Congress.

• What will be the implications of this for US leadership and US foreign policy?
• How will domestic politics constrain foreign policy objectives?
• Can policymakers across government set aside political differences to tackle global challenges?

This panel also unpacks insights into the following questions:

• What will this Congress view as foreign policy priorities?
• Will policies that are tough on China ramp up?
• Can the US continue its support for Ukraine with a split Congress?
• Will the next two years lead to any considerable foreign policy pivots with a general election on the horizon?

As with all members events, questions from the audience drive the conversation.

Read the transcript.

In conversation with Rahul Gandhi 6 March 2023 — 6:00PM TO 7:00PM Anonymous (not verified) 27 February 2023 Chatham House and Online

The former president of the Indian National Congress discusses how today’s world will set the path for the world’s biggest democracy.

Soon to be the world’s largest population, and with a rapidly growing economy and an increasing presence in global affairs, India’s place in the world is changing.

Hosting the G20 this year, the New Delhi summit in September 2023 is a symbol of India’s growing might, moving from emerging to prominent player on the world stage.

However, challenges faced by the country are substantial. Frosty relations with China, ongoing tension with Pakistan, climate catastrophe, and food insecurity all represent significant global concerns to India.

Internally, the hurdles are imposing. Millions still live below the poverty line and demographic instability poses risks to the country. The state of democracy across the country is consistently questioned.

At this event, Rahul Gandhi explores key questions including:

• How does India see the impact of the war in Ukraine?
• Will New Delhi be able to balance relations between the West and Russia?
• Can India offer an alternative vision for Asia that challenges China?
• Internally, to what extent is democracy in India under strain?
• Can India’s economy evolve to create a wide-reaching, prosperous nation in the coming years?

As with all member events, questions from the audience drive the conversation.

Is China's economy on the rebound? 5 April 2023 — 6:00PM TO 7:00PM Anonymous (not verified) 28 February 2023 Chatham House and Online

Exploring the domestic and international signals from the first annual session of the 14th National People’s Congress.

2022 proved to be a difficult year for China. War, COVID-19 and economic turbulence presented a cocktail of significant challenges for the ruling CCP in China. Having dispensed of the infamous zero-COVID-19 policy, China is apparently back open for business.

On the international front, continued tensions with the West, war in Europe and climate change are just some of the obstacles standing in the way of Chinese economic recovery. 

Domestically, China must find ways to reinvigorate demand and move on from a low of 3 per cent GDP growth in 2022. With a frustrated population, people are also keen to be freed from the shackles of a stream of lockdowns and quarantining.

The in-tray for the 14th National People’s Congress, as it begins its first session, is substantial. The implications, at home and abroad, from its recent summit in Beijing reverberate around the world.

The experts on the panel discuss:

• What has been the true extent of COVID-related damage to China’s economy and wider society?
• What economic scars are visible post-recovery?
• Will there be longer-term implications for China’s economic and diplomatic footprint globally post-COVID? 

As with all member events, questions from the audience drive the conversation.

In conversation with Ehud Barak 27 March 2023 — 12:00PM TO 1:00PM Anonymous (not verified) 21 March 2023 Chatham House and Online

The former prime minister of Israel discusses his country’s political outlook and foreign policy priorities.

On the eve of its 75th independence anniversary, Israel is at a critical crossroads. Weeks of long, intense protests surrounding judicial reforms pursued by the current government have widened the debate over the role played by the, so far independent, judiciary, notably the Supreme Court.

Supporters on both sides of the argument are fighting over different visions of Israel – a true liberal-democracy, or a much-reduced version of a democratic system. Whichever side of the argument people fall, the debate symbolizes tension in Israel’s society and decline in trust of its political and constitutional institutions.

Abroad, the situation remains intricate. Israel-Iran relations remain on a knife edge while the Abraham Accords normalized relations with parts of the Gulf. Then there are the continual issues surrounding relations with the Palestinians and their right to self-determination and statehood.

Old international challenges are now rubbing up against the new. Israel is part of a changing power dynamic in the Middle East, the result of a much-reduced US footprint. Furthermore, it must now contend with the other global superpower in China and continue to work on its response to the war in Ukraine.

Amid its domestic struggle to maintain its democratic character, fast-moving regional and international developments are in need of addressing. Friends and allies are deeply concerned with the country’s constitutional crisis, potentially re-evaluating their relations with the Jewish state.

Former prime minister of Israel Ehud Barak lays out his views on the complexities of domestic and international challenges facing Israel today.

Questions covered include:

• What are the main root causes of the current constitutional crisis, and how could it be best resolved?
• Could the current situation lead to a breakdown of the political system, even widespread violence?
• How could the current circumstances in Israel and Palestine affect relations between the two and any prospect for peace negotiations?
• How will US-Israel relations stand up against China’s influence in the region?
• What is Israel’s interpretation of the war in Ukraine and how is the country affected?

As with all member events, questions from the audience drive the conversation.

Chatham House exhibition - In conversation with the future 19 April 2023 — 6:00PM TO 8:00PM Anonymous (not verified) 31 March 2023 Chatham House

Hear from the innovative leaders and companies driving change towards a more sustainable future.

This event is an opportunity to hear from the innovative leaders and companies driving change towards a more sustainable future.

The evening begins with a panel discussion then, over sustainably sourced drinks and canapés, you are invited to walk through Chatham House and explore the innovative and experimental ideas enabling radical shifts to allow us to prosper without exhausting our planet’s resources.

Our exhibiting partners include Earthshot Prize winner NotPla, Hawkins Brown, Polymateria, and BEEN London. 

Bronwen Maddox, director of Chatham House, opens the evening at 6pm and introduces our panel of experts, chaired by Ana Yang, head of Chatham House’s Sustainability Accelerator. 

Please note that this event is operating a ballot for in-person attendance. Your place will be confirmed by Wednesday 12 April if you are successful.

General practice leaders in Wales have voted unanimously to reject the Welsh government’s GP contract offer for 2024-25.The BMA’s ​General Practitioners Committee Wales said the government’s general medical services contract offer for the current financial year “fails to provide a credible and sustainable future” for general practice.GPs in Wales will now vote on whether to accept or reject the contract in a referendum that will open later this month.Gareth Oelmann, chair of the committee, said, “The decision to disregard the serious concerns and valuable contribution of general practice in Wales is beyond insulting, it is dangerous, leaving more surgeries and their patients in peril. We are concerned that this offer will leave more practices with no option but to close. GPs are being denied the resources they need to deliver vital services to the population.”The BMA said it was not yet able to disclose any details on the offer, and...

Why a no-fly zone risks escalating the Ukraine conflict Expert comment NCapeling 13 March 2022

The US rejection of Poland’s offer to send fighter jets as a boost to Ukraine’s air defence shows just how uneasy nations are about direct combat with Russia.

The Pentagon’s decision to turn down the proposal by its fellow NATO member Poland to put Russian-made MiG-29 jets at its disposal demonstrates again how keen the US and allies are to avoid risking major confrontation with Russian forces.

The US Department of Defense says the offer to locate jets at bases in Germany was ‘not tenable’ as this risks flying into contested airspace over Ukraine – a non-NATO member – raising ‘serious concerns for the entire NATO alliance’ and echoing the continuing rejection of calls to implement no-fly zones (NFZs) as a way of easing the devastation being faced by trapped Ukraine civilians.

NFZs restrict any aircraft, including drones, from flying over a pre-defined region and can be used for both military and civilian purposes. But the implementation of NFZs is difficult to enforce and – most significantly – is unlikely to achieve the intended effect on the ground.

In conflict situations, they are usually implemented under the remit of United Nations (UN) peace support operations, requiring authorization under Article 42 of the UN Charter. This details that if all possible methods have proven ineffective in responding to a threat, countries ‘may take such action by air, or land forces as may be necessary to maintain or restore international peace and security’.

Protection but with limitations

NFZs provide both protection from attack and surveillance but do have limitations. They must be monitored and enforced which requires committing to fighter jet patrols with the explicit task of defending the area from the air by whatever means necessary.

This could mean jets firing upon Russian planes and drones so, if NATO allies and partners were to enforce a NFZ, it would represent an escalation of measures which is a step that would most likely provoke an unpredictable Vladimir Putin into further escalation – in short, it is highly likely to be seen as an act of war.

UK defence secretary Ben Wallace – among others – has repeatedly dispelled the idea, saying that enforcing NFZs would mean deploying ‘British fighter jets directly against Russian fighter jets’. In relation to moves such as the Polish jets, the Kremlin has warned that any countries offering airfields to Ukraine for attacks on Russia may be viewed as having entered the conflict.

There have only been three past instances of military NFZs. In Bosnia, as part of Operation Deny Flight from 1993-1995, a NFZ was enforced as part of a strategy which also including the provision of close air support and approved air strikes.

In Iraq, an NFZ endured for 12 years from 1991 and was succcesful in preventing Saddam Hussein from attacking Kurdish and Shia Muslim civilians. And in Libya in 2011, a NFZ was deployed to prevent the destruction of military infrastructure and the Libyan regime – although this quickly morphed into the provision of close air support.

So it is unclear just how successful NFZs are at providing protection. In Iraq and Libya, NFZ cover protection was provided but neither Saddam Hussein or Colonel Gaddafi were able to effectively target victims through their ground forces whereas, in Bosnia, Slobodan Milosevic infamously used ground troops to slaughter 8,000 Bosnian men and boys at Srebrenica.

Putin would still be able to continue to use both ground forces and artillery to assault Ukrainian cities with or without a NFZ – in fact, his sparse use of his Russian Aerospace Forces (VKS) has been one of the surprising features of the war so far. Under a NFZ, missile attacks could also continue, there is nothing in the record of no-fly zones to suggest the provision of safe areas for non-combatants would work.

And NFZs have only been successful against vastly inferior forces such as in Iraq, Bosnia, and Libya. But Russia has an air force second only in size to the US and has a vast range of defences including the potent S-400 Triumf at its disposal. Not only would an NFZ be ineffective, it might also not be possible to enforce without risking significant losses to the peace operations force.

It is due to a combination of these reasons that NFZs have not been used more in previous conflicts. The most recent consideration for a NFZ was in Syria but President Bashar al-Assad’s Syrian forces, protected by Russian air cover, could still have targeted their intended victims despite air policing so a NFZ was not used.

In the long-term, under the terms of a ceasefire agreement, it may be possible to include a NFZ under a UN or joint OSCE-UN peace terms. However, the forces involved should exclude NATO allies and partners or any states with Russian alliances to avoid further conflict.

This leaves few suitable countries with the capacity, willingness, and political stance to be called on. Two of the world’s most militarily capable states – China and India – abstained in the Uniting for Peace vote in the UN General Assembly (UNGA). Whether another willing state with the military capability – such as a Gulf state – could be considered acceptable to all sides remains to be tested.

Notable successes with SAMs

Many military commentators also note that currently Ukrainian forces are having notable success without jets, downing Russian aircraft using sophisticated surface-to-air missiles (SAMs) such as Stinger and Javelin, and NATO countries continue to supply those in their thousands.

War on Ukraine: Exploring the humanitarian response to the conflict 12 April 2022 — 12:00PM TO 1:00PM Anonymous (not verified) 6 April 2022 Online

This event explores the implications of the humanitarian realities from Russia’s invasion of Ukraine, the largest ground campaign in Europe since World War Two.

Reports from humanitarian organizations working in Ukraine are dire and reveal that a humanitarian disaster on an epic scale is unfolding.

The United Nations (UN) and other organizations estimate 12 million of Ukraine’s population are in need of assistance, 4.1 million have been displaced to neighbouring countries, and 6.4 million have become internally displaced.

Gillian Triggs, the assistant secretary-general and assistant high commissioner for protection at the UNHCR, joins other experts to discuss the humanitarian situation in Ukraine.

The panel considers:

• What are the greatest needs in Ukraine now?
• How can aid agencies meet those needs?
• What are the short and long-term implications of the crisis for Ukraine and Europe?
• How do international organizations work with local NGOs to provide food, medical aid and shelter?

This event is part of a regular series of events offering insight and analysis from experts and policymakers on how the war is affecting Ukraine, the region and the world.

This event is part of Chatham House’s ongoing work on the future of conflict.

Read the transcript

New research on 21st-century conflict 25 April 2022 — 5:00PM TO 6:00PM Anonymous (not verified) 11 April 2022 Online

This International Affairs webinar shares research on US special operations, urban warfare, and digital activism in recent conflicts.

Given the ongoing Russian invasion of Ukraine, and continuing conflicts in Myanmar, Yemen, and other countries, it is important to understand the changing nature of conflict in the 21st century.

In this webinar, authors from the March 2022 issue of International Affairs share research on the transformation of Western special forces, the impact of army size in urban warfare, and the use of social media and online activism in war.

The speakers in this event drew on the following research:

• US Special Forces transformation: post-Fordism and the limits of networked warfare (https://doi.org/10.1093/ia/iiab213)
• Urban insurgency in the twenty-first century: smaller militaries and increased conflict in cities (https://doi.org/10.1093/ia/iiac007)
• Diasporas as cyberwarriors: infopolitics, participatory warfare and the 2020 Karabakh war (https://doi.org/10.1093/ia/iiac015)

International Affairs was started at Chatham House in 1922 to communicate research to members who could not attend in person. Over the past 100 years, it has transformed into a journal that publishes academically rigorous and policy-relevant research. It is published for Chatham House by Oxford University Press. Read the latest issue here.

In conversation with Edi Rama, prime minister of Albania 23 March 2023 — 5:30PM TO 6:30PM Anonymous (not verified) 13 March 2023 Chatham House and Online

From migration to Russia and China, how is Albania responding to the geopolitical challenges of today?

In late 2022, the UK government made a pointed remark that many of the illegal migrants attempting to get into the country were from Albania. In response, Albania prime minister Edi Rama replied that targeting Albanians as the cause of Britain’s crime and border problems ‘makes for easy rhetoric but ignores hard fact’. 

This nuanced response demonstrated the challenges and complexities that Albania faces, the same as many other countries. As well as being embroiled in the major challenge of international migration, Albania has suffered from a serious cyber-attack in July 2022 from Iran. Government networks were compromised for a month with Tirana removing the Iranian embassy in the capital.

Then there is the ongoing threat from Russia and China. Nestled in the already volatile Balkans, Albania has been at the heart of international affairs in recent months.

Prime Minister Rama speaks at Chatham House to discuss:

• How is Albania responding to Russian aggression and what is its stance on Ukraine?
• Where does Tirana believe China poses the most serious threat?
• How can countries in Europe best respond to illegal migration and better control the flow of people?
• How is the region of the Western Balkans effected by the war in Ukraine and how can it contribute to the security challenges posed by the war?

As with all member events, questions from the audience drive the conversation.

C-X-C motif chemokine receptor 4 (CXCR4)–directed imaging has gained clinical interest in aiding clinical diagnostics in primary aldosteronism (PA). We retrospectively evaluated the feasibility of CXCR4-directed scintigraphy using the novel CXCR-4 ligand [^99mTc]Tc-pentixatec in patients with PA. Methods: Six patients (mean age ± SD, 49 ± 15 y) underwent CXCR4-directed scintigraphy (including planar imaging and SPECT/CT) 30, 120, and 240 min after injection of 435 ± 50 MBq of [^99mTc]Tc-pentixatec. Adrenal CXCR4 expression was analyzed by calculating lesion-to-contralateral ratios (LCRs). Imaging results were correlated to clinical information. Histopathology and clinical follow-up served as the standard of reference. Results: Three subjects showed lateralization of adrenal tracer accumulation, with a mean maximum lesion-to-contralateral ratio of 1.65 (range, 1.52–1.70), which correlated with morphologic findings on CT. One individual underwent adrenalectomy and presented with complete biochemical and clinical remission at follow-up. Histopathologic workup confirmed unilateral aldosterone-producing adenoma. Conclusion: [^99mTc]Tc-pentixatec scintigraphy with SPECT in patients with PA is feasible and might offer a valuable alternative to CXCR4-directed imaging with [⁶⁸Ga]Ga-pentixafor PET.

Mutations of p53 protein occur in over half of all cancers, with profound effects on tumor biology. We present the first—to our knowledge—method for noninvasive visualization of p53 in tumor tissue in vivo, using SPECT, in 3 different models of cancer. Methods: Anti-p53 monoclonal antibodies were conjugated to the cell-penetrating transactivator of transcription (TAT) peptide and a metal ion chelator and then radiolabeled with ¹¹¹In to allow SPECT imaging. ¹¹¹In-anti-p53-TAT conjugates were retained longer in cells overexpressing p53-specific than non–p53-specific ¹¹¹In-mIgG (mouse IgG from murine plasma)-TAT controls, but not in null p53 cells. Results: In vivo SPECT imaging showed enhanced uptake of ¹¹¹In-anti-p53-TAT, versus ¹¹¹In-mIgG-TAT, in high-expression p53^R175H and medium-expression wild-type p53 but not in null p53 tumor xenografts. The results were confirmed in mice bearing genetically engineered KPC mouse–derived pancreatic ductal adenocarcinoma tumors. Imaging with ¹¹¹In-anti-p53-TAT was possible in KPC mice bearing spontaneous p53^R172H pancreatic ductal adenocarcinoma tumors. Conclusion: We demonstrate the feasibility of noninvasive in vivo molecular imaging of p53 in tumor tissue using a radiolabeled TAT-modified monoclonal antibody.

Preclinical data have shown that ¹⁶¹Tb-labeled peptides targeting the somatostatin receptor are therapeutically more effective for peptide receptor radionuclide therapy than are their ¹⁷⁷Lu-labeled counterparts. To further substantiate this enhanced therapeutic effect, we performed cellular dosimetry to quantify the absorbed dose to the cell nucleus and compared dose–response curves to evaluate differences in relative biological effectiveness in vitro. Methods: CA20948 cell survival was assessed after treatment with [¹⁶¹Tb]Tb- and [¹⁷⁷Lu]Lu-DOTATATE (agonist) and with [¹⁶¹Tb]Tb- and [¹⁷⁷Lu]Lu-DOTA-LM3 (antagonist) via a clonogenic assay. Cell binding, internalization, and dissociation assays were performed up to 7 d to acquire time-integrated activity coefficients. Separate S values for each type of particle emission (Auger/internal conversion [IC] electrons and β^– particles) were computed via Monte Carlo simulations, while considering spheric cells. Once the absorbed dose to the cell nucleus was calculated, survival curves were fitted to the appropriate linear or linear-quadratic model and corresponding relative biological effectiveness was evaluated. Results: Although the radiopeptide uptake was independent of the radionuclide, [¹⁶¹Tb]Tb-DOTATATE and [¹⁶¹Tb]Tb-DOTA-LM3 delivered a 3.6 and 3.8 times higher dose to the nucleus, respectively, than their ¹⁷⁷Lu-labeled counterparts on saturated receptor binding. This increased nucleus-absorbed dose was mainly due to the additional emission of IC and not Auger electrons by ¹⁶¹Tb. When activity concentrations were considered, both [¹⁶¹Tb]Tb-DOTATATE and [¹⁶¹Tb]Tb-DOTA-LM3 showed a lower survival fraction than did labeling with ¹⁷⁷Lu. When the absorbed dose to the nucleus was considered, no significant difference could be observed between the dose–response curves for [¹⁶¹Tb]Tb- and [¹⁷⁷Lu]Lu-DOTATATE. [¹⁶¹Tb]Tb-DOTA-LM3 showed a linear-quadratic dose response, whereas [¹⁶¹Tb]Tb-DOTATATE showed only a linear dose response within the observed dose range, suggesting additional cell membrane damage by Auger electrons. Conclusion: The IC, rather than Auger, electrons emitted by ¹⁶¹Tb resulted in a higher absorbed dose to the cell nucleus and lower clonogenic survival for [¹⁶¹Tb]Tb-DOTATATE and [¹⁶¹Tb]Tb-DOTA-LM3 than for the ¹⁷⁷Lu-labeled analogs. In contrast, [¹⁶¹Tb]Tb-DOTATATE showed no higher dose response than [¹⁷⁷Lu]Lu-DOTATATE, whereas for [¹⁶¹Tb]Tb-DOTA-LM3 an additional quadratic response was observed. Because of this quadratic response, potentially caused by cell membrane damage, [¹⁶¹Tb]Tb-DOTA-LM3 is a more effective radiopeptide than [¹⁶¹Tb]Tb-DOTATATE for labeling with ¹⁶¹Tb.

Neoadjuvant therapy in patients with locally advanced rectal cancer (LARC) has achieved good pathologic complete response (pCR) rates, potentially eliminating the need for surgical intervention. This study investigated preoperative methods for predicting pCR after neoadjuvant short-course radiotherapy (SCRT) combined with immunochemotherapy. Methods: Treatment-naïve patients with histologically confirmed LARC were enrolled from February 2023 to July 2023. Before surgery, the patients received neoadjuvant SCRT followed by 2 cycles of capecitabine and oxaliplatin plus camrelizumab. ⁶⁸Ga-labeled fibroblast activation protein inhibitor ([⁶⁸Ga]Ga-FAPI-04) PET/MRI, [¹⁸F]FDG PET/CT, and contrast-enhanced MRI were performed before treatment initiation and before surgery in each patient. PET and MRI features and the size and number of lesions were also collected from each scan. Each parameter’s sensitivity, specificity, and diagnostic cutoff were derived via receiver-operating-characteristic curve analysis. Results: Twenty eligible patients (13 men, 7 women; mean age, 60.2 y) were enrolled and completed the entire trial, and all patients had proficient mismatch repair or microsatellite-stable LARC. A postoperative pCR was achieved in 9 patients (45.0%). In the visual evaluation, both [⁶⁸Ga]Ga-FAPI-04 PET/MRI and [¹⁸F]FDG PET/CT were limited to forecasting pCR. Contrast-enhanced MRI had a low sensitivity of 55.56% to predict pCR. In the quantitative evaluation, [⁶⁸Ga]Ga-FAPI-04 change in SUL_peak percentage, where SUL_peak is SUV_peak standardized by lean body mass, had the largest area under the curve (0.929) with high specificity (sensitivity, 77.78%; specificity, 100.0%; cutoff, 63.92%). Conclusion: [⁶⁸Ga]Ga-FAPI-04 PET/MRI is a promising imaging modality for predicting pCR after SCRT combined with immunochemotherapy. The SUL_peak decrease exceeding 63.92% may provide valuable guidance in selecting patients who can forgo surgery after neoadjuvant therapy.

Turkey Is on the Road to a Severe Economic Crisis Expert comment sysadmin 12 July 2018

The deteriorating state of the economy is President Erdoğan’s Achilles’ heel and the biggest threat to his currently unrivalled leadership.

Fifteen days after Turkey’s parliamentary and presidential elections, Turkish President Recep Tayyip Erdoğan appointed a new government under radically enhanced executive powers granted by the constitution. He chose 16 loyalists and partisan figures to ensure that he remains front and centre in decision-making and policy formation.

Most notably, Erdoğan sacrificed the former deputy prime minister and ex-Merrill Lynch chief economist Mehmet Şimşek in favour of his inexperienced son-in-law Berat Albayrak as finance and treasury minister to manage the fragile economy. Whether he has the competence to placate jittery financial markets and foreign investors is debatable.

Erdoğan will prioritize short-term growth at all costs to the detriment of macroeconomic and financial stability. That entails foregoing interest rate hikes needed to contain runaway double-digit inflation and to support a plummeting lira that depreciated nearly 20 per cent this year. It also means loosening the purse strings, flooding the markets with cheap credit and sponsoring rampant construction and mega-infrastructure projects.

True to his promise, he has appropriated to himself, by presidential decree, the right to hire the central bank governor, deputies and monetary policy committee members for a four-year term. This completes the politicization of the once-respected and independent central bank and is in line with his unorthodox monetary views that higher interest rates equates with higher inflation.

Erdoğan associates progress with gleaming high-rise buildings, gargantuan infrastructure show-pieces and elevated growth rates. He is spiking the fuel to boost the speed of the sputtering mid-sized Audi-style Turkish economy to achieve superior Ferrari growth rates. As any mechanic knows, these tactics are unsustainable in the long term. Eventually, the engine will burn out.

He does not seem to appreciate that Turkey’s growth model requires an overhaul to join the league of rich economies. It is too reliant on consumer spending and government-sponsored infrastructure and construction projects funded by speculative financial flows rather than on sustained private investment and exports.

Net result: the corporate sector’s foreign-exchange liabilities have climbed to a record $328 billion as of the end of 2017. When netted against foreign-exchange assets, it is still a worrying $214 billion. Its US dollar and euro debt pile has more than doubled since 2008, 80 per cent of which is held by domestic banks. Given these acute balance-of-payments conditions, it is not farfetched that Turkey may impose capital controls in the short-to-medium term to restrict the outflow of foreign assets. At $50 billion, the current account deficit – defined as the sum of the trade balance and financial flows – is not even covered by the central bank’s net international reserves at nearly $45 billion.

Unsurprisingly, some major Turkish companies are negotiating with their bondholders to restructure their sizeable foreign loan obligations as lira devaluation increases the financial burden. Should a significant number of Turkish corporates default on their foreign obligations, this would reverberate across the Turkish economy, cause mass consumer panic, shake the confidence of international financial markets and potentially lead to a crisis within the Turkish financial system and to a deep and prolonged economic recession.

Revealingly, Erdoğan’s nationalist allies, the Nationalist Movement Party (MHP), refused to join his government. Perhaps Devlet Bahçeli, the MHP leader, learned the lessons of the 2001 financial crisis as a member of a three-party government. So he is opting to project influence from the outside, rather than risk being tainted with responsibility for an economic downturn.

Turkey’s president is doubling down on his singular approach to governance irrespective of the fallout. Notwithstanding his current political dominance, the deteriorating state of the economy is his Achilles’ heel and the biggest threat to his currently unrivalled leadership.

A Credit-fuelled Economic Recovery Stores Up Trouble for Turkey Expert comment sysadmin 17 February 2020

Turkey is repeating the mistakes that led to the 2018 lira crisis and another freefall for the currency may not be far off.

Since the 2018 economic crisis, when the value of the lira plummeted and borrowing costs soared, Turkey’s economy has achieved a miraculous ‘V-shaped’ economic recovery from a recession lasting three quarters to a return back to quarterly growth above 1 per cent in the first three months of 2019.

But this quick turnaround has been built on vast amounts of cheap credit used to re-stimulate a consumption and construction boom. This so-called ‘triple C’ economy generated a rapid growth spurt akin to a modestly able professional sprinter injected with steroids.

This has made the currency vulnerable. The lira has steadily depreciated by 11 per cent against the US dollar since the beginning of 2019 and crossed the rate of 6 lira versus the US dollar on 7 February. And there are further warning signs on the horizon.

Credit bonanza

Statistics reveal that Turkish domestic credit grew by around 13 per cent on average throughout 2019. The credit bonanza is still ongoing. Mortgage-backed home sales jumped by a record high of 600 per cent last December alone and the 2019 budget deficit catapulted by 70 per cent due to higher government spending.

Turkey’s central bank fuelled this credit expansion by cutting interest rates aggressively to below inflation and, since the start of this year, purchasing lira-denominated bonds equivalent to around one-third of total acquisitions last year to push yields lower.

Equally, it has linked bank lending to reserve requirements – the money that banks have to keep at the central bank – to boost borrowings via state and private banks. Banks with a ‘real’ loan growth (including inflation) of between 5 and 15 per cent enjoy a 2 per cent reserve ratio on most lira deposits, which authorities adjusted from an earlier band of 10-20 per cent that did not consider double-digit inflation.

Cumulatively, bond purchases (effectively quantitative easing) and reserve management policies have also contributed to eased credit conditions.

Commercial banks have also reduced deposit rates on lira accounts to less than inflation to encourage consumption over saving. Together with low lending rates, the boost to the economy has flowed via mortgages, credit card loans, vehicle leasing transactions and general business borrowings.

Accordingly, stimulus is at the forefront of the government’s economic approach, as it was in 2017 and 2018. It does not seem to be implementing structural change to re-orient growth away from consumption towards productivity.

In addition, governance is, again, a central issue. President Recep Tayyip Erdogan’s near total monopolization of policymaking means he guides all domestic and external policies. He forced out the previous central bank governor, Murat Cetinkaya, in July 2019 because he did not share the president’s desire for an accelerated pace of interest rate reductions.

New challenges

Despite the similarities, the expected future financial turbulence will be materially different from its 2018 predecessor in four crucial respects.

Firstly, foreign investors will only be marginally involved. Turkey has shut out foreign investors since 2018 from lira-denominated assets by restricting lira swap arrangements. Unsurprisingly, the non-resident holdings of lira bonds has plummeted from 20 per cent in 2018 to less than 10 per cent today.

Secondly, the Turkish government has recently introduced indirect domestic capital controls by constraining most commercial transactions to the lira rather than to the US dollar or euro to reduce foreign currency demand in light of short-term external debt obligations of $191 billion.

Thirdly, the Turkish state banks are intervening quite regularly to soften Lira volatility, thereby transitioning from a ‘free float’ to a ‘managed float’. So far, they have spent over $37 billion over the last two years in a futile effort to buttress the lira. This level of involvement in currency markets cannot be maintained.

Fourthly, the Turkish state is being far more interventionist in the Turkish stock exchange and bond markets to keep asset prices elevated. Government-controlled local funds have participated in the Borsa Istanbul and state banks in sovereign debt to sustain rallies or reverse a bear market.

All these measures have one running idea: exclude foreign investors and no crisis will recur. Yet, when the credit boom heads to a downturn sooner or later, Turks will probably escalate lira conversions to US dollars; 51 per cent of all Turkish bank deposits are already dollar-denominated and the figure is still rising.

If Turkey’s limited foreign reserves cannot satisfy the domestic dollar demand, the government may have to impose comprehensive capital controls and allow for a double digit depreciation in the value of the lira to from its current level, with significant repercussions on Turkey’s political stability and economic climate.

To avoid this scenario, it needs to restore fiscal and monetary prudence, deal the with the foreign debt overhang in the private sector and focus on productivity-improving economic and institutional reforms to gain the confidence of global financial markets and Turks alike.

Turkey-Russia Relations: A Marriage of Convenience? 26 November 2020 — 12:00PM TO 1:30PM Anonymous (not verified) 17 November 2020 Chatham House

Speakers discuss the complex but, so far, durable ties between Putin and Erdogan and the perspectives of each leader. Other issues will include the impact of the Biden presidency and the unfolding situation in Nagorny Karabakh.

This is an online only event

Russia-Turkey relations are governed by a unique dynamic between presidents Vladimir Putin and Recep Tayyip Erdogan. They pursue contrasting objectives in Libya, the Eastern Mediterranean, Caucasus and Ukraine; yet they have managed to compartmentalize their differences to avoid any spill-over into diplomatic, military and economic cooperation.

Erdogan purchased the Russian S400 missile defence system at the cost of ejection from the US-led fourth generation F35 stealth fighter programme; and at the risk of sanctions by Washington. Russia is also proceeding with the construction of the Akkuyu Nuclear Power Plant near Turkey’s Mediterranean coast.

Turkey Needs Radical New Direction to Save the Economy Expert comment NCapeling 23 November 2020

Turkey should emulate the reformist approach it adopted after the 2001 crisis to prevent an economic and financial breakdown - but this looks highly unlikely.

Although Ankara has witnessed what appears to be an abrupt change of its top economic team with two fresh appointments to key positions – Naci Ağbal as governor of the central bank and Lütfi Elvan as finance and treasury minister – a cardinal rule of thumb in Turkish politics is that the more drama one sees, the less policy change there will actually be.

Financial markets reacted positively to the moves in the expectation they will signal a change of Turkey’s overall economic approach, but the reality is Turkish president Recep Tayyip Erdoğan is simply putting loyalists into key bureaucratic positions to help ensure the primary role of these functions becomes ‘selling’ his policies more effectively, rather than altering them.

The hope from the markets – which saw the beleaguered Turkish lira appreciate against the US dollar at the news – is that Turkey adopts substantial interest rate increases as well as measures to repress liquidity expansion in order to temper its controversial so-called ‘Triple C’ approach of using cheap credit to stimulate growth with an unsustainable consumption and construction boom.

But instead, Erdoğan’s declaration after the appointments were made indicates the new restrictions in which they will now operate, saying ‘we are in a historic struggle against those who want to force Turkey into modern capitulations through the shackles of interest rates, foreign exchange rates and inflation’.

Learn from past successes

To resolve its current underlying economic problems, Turkey should actually be looking to its recent past and aiming to emulate the approach pursued by former prime minister Bülent Ecevit during the 2001 financial crisis when he recruited Kemal Derviş, a senior World Bank official with extensive experience and international contacts in economic, financial, and monetary affairs.

As economy minister with a broad mandate to spearhead a durable economic recovery plan, Dervis established independent market regulatory agencies covering banking, telecommunications, energy, and other key sectors, and strengthened the competition authority.

He also either liquidated or merged insolvent banks, granted central bank autonomy to guarantee price stability, and ensured recruitment was based on competence, expertise, and meritocracy. Crucially, his productivity-enhancing restructuring blueprint was designed in Turkey rather than being imposed by the International Monetary Fund (IMF) or another external agency.

Ecevit also turbocharged reforms motivated in part by a desire to join the EU with constitutional, political and legal modernization which widened personal freedom, significantly curtailed capital punishment, liberalized the cultural environment for Kurds, and fortified the rule of law. And one of his coalition partners in that work, the right-wing pro-Turkish National Action Party (MHP), is now allied with the current ruling Justice and Development Party (AKP).

His foreign minister Ismail Cem also enhanced Turkey’s relations with both Europe and the US, initiated the so-called ‘earthquake diplomacy’ with his Greek counterpart George Papandreou after twin tragedies struck both nations in 1999, and largely avoided entanglement in Middle Eastern conflicts.

The net result of all these actions was that Turkey emerged from the crisis with greater resilience, a more robust regulatory framework, upgraded political and economic institutions, rapidly decreasing inflation, a credible central bank, a stronger financial system, closer relations with the EU and US, and heightened domestic and foreign investor confidence.

But now that similar woes are engulfing Turkey anew, is Erdogan and the AKP/MHP alliance able – and willing – to repeat the Ecevit recipe? Present signs indicate they are highly unlikely to as they are too committed to entrenching the Triple C model.

Although this model will likely further consolidate their power, it will also empty the civil service of qualified professionals, restrict civil liberties and freedoms, and create more ideological politics, affecting Turkey’s foreign policy.

Such a stubborn refusal to shift direction is increasing the inevitability of a deep economic and financial breakdown and so, unless Turkey undertakes a serious policy departure instead of continuing to resort to the quick fix approach, there is real likelihood it will simply accelerate towards disaster.

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